Thanks.

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Fellowtraveler-- if you're willing to do some hand-holding I'd be really interested in making a Chaumian cash transaction through an OT server.

I only ever understand about 30% of your posts.  It doesn't make sense to me how Bitmessage could possibly be a missing link for OT, but I'd rather just go through the motions of making a few transactions and see how it works.

PM me

Well, you're posting this on a forum for a p2p cryptocurrency that was designed to give the _users_ of the system control over their crypto-tokens, so let's be clear-- you _must_ hold XRP in order to gain anything like the control over your own tokens that you have in Bitcoin.

When I say "control", of course I mean a type of control that comes with all the price swings/risks of scams/hacks/bugs, and everything else that may in the end make that control more theoretical than practical.  That control includes:

* irreversibility.  I send you XRP/Bitcoin, you have XRP/Bitcoin.  No double spends, no questions.
* no counterparty risk.  You send XRP/Bitcoin to a nonprofit, that nonprofit _has_ those XRP/Bitcoin.  No third party can "freeze" those funds (though idiots can certainly make overlay coin-taint systems that hurts the fungibility of the currency in general)
* there is an unblockable (or at least _extremely_ difficult to censor) route from me to you that only depends on the system itself holding to the minimum protocol rules required for the system to function.  If there's a bug in the system, or some unexpected fork it can make me decide to delay my payment, but if there is some bank account of an exchange that holds an alarmingly large portion of the currency that gets frozen it does absolutely nothing to delay my transaction (unless of course they hold my coins on my behalf).


Yep.

It's not guaranteed. That's a forward looking statement.
[/quote]

Some projects like Bitcoin make claims based on what the software actually does at the time without giving you an honest assessment of whether it would actually scale or even be feasible to run for the typical user in the future[1].  Others like Ripple make claims based on what might be true in the future if the system does indeed scale to a larger userbase.

Then there are serious projects which tell you what they actually do and at least attempt to publicly verify how well they scale before evangelizing their software.

[1] This doesn't hold for bitcoin's claim of "anonymity", since it was never true at all, but I don't remember whether the official site ever claimed that or if it was just glib fanboys on the forums.

I believe his point is that your bias clearly affects how you weigh the evidence for your arguments. I've seen your posts for awhile, and the JoelKatz from a year ago wouldn't be tirelessly defending a new altcoin for which the future method of distributing the currency is not public knowledge.  He would also be wary of an implementation that does beta testing in a centralized manner, without full release of the source code, in which a centralized body initially controls all the tokens (and presumably will continue to do so, at least with a large portion of them, for a long time after the beta phase is over).

A phrase like "transparent after the fact" will never sound reasonable when the mechanism you're describing is hidden from your audience.  Such statements lack verifiability and are therefore not part of a reasoned argument to anyone but your (current) self.  That this logic is lost on you seems to be as good an example as any for the dangerous effects of conflict of interest.

So how does the system protect against credit default swap shenanigans?  I never understood that with the original Ripple system, and I don't understand it with the current one.

In the lead up to the 2008 downturn, significant sums had to be spent to change regulations to enable the swaps and create loopholes to consolidate banking power.  But Ripple is devoid of those protections by default, so it seems the system would actually make the mortgage crises default chain several orders of magnitude cheaper to implement.

s/Ripple/Facebook and you'll see that what you wrote is rampant digital utopianism.  Those links (read: inferences) draw a picture of your financial profile in unprecedented detail.  I'm sorry I don't share your glib outlook, but I'm simply not going to accept the potential welcome surprises of a few single digit percentage in transaction fees going "poof" in exchange for all my financial data INCLUDING personal credit-extension relationships-- which currently does NOT exist in digital form of any kind-- being available to a federation of third parties.  It's hard enough trying to keep track of what the big three credit-rating companies know about me, and who they share it with, as well as banks and cc's.  But that doesn't mean everybody should just willingly provide that and much more data to what will amount to the entire world.

Neither you nor I have any idea of the kinds of inferences that can be made with this data, or even with seemingly innocuous metadata (esp. when aggregated).  At least with Bitcoin methods exist to mitigate problems one might run into with say, inferences between a BTC address and a forum posting-- you can't erase those associations, but you can easily start over.  What does the Ripple userbase do when they read a study that details the negative consequences of showing everything to everyone, all the time, for little in return?  Like Facebook, they'll be locked in to the relationships they've created within the network-- there's no way everyone in your trust network can just generate a new address or something.  (And federation doesn't alleviate this problem-- see Diaspora.)  Users would be trapped, just like they are in the current banking system, except that they've given even more power over to the new system in the form of comprehensive financial and social data.  I think it's safe to say now that such data becomes the real currency of any network that claims to protect personal data by policy instead of by design.

Recently a friend of mine got a hacked email account where the idiot hacker claimed to be that person on a trip to Europe and needed thousands of euros.  What happens when an account hack is paired with inferences from the financial trust network, and the hacker asks for a credit extension based on the data about how that contact has granted credit within the network as a whole? 1000s or Euros suddenly becomes a number that is a lot more reasonable to the recipient.  There are probably much more nefarious uses to which the aggregate data can be put-- the fact that I even have to struggle to think them up is a good example of how nefarious the bigger problem of digital utopianism is.

That's a good point that I overlooked.  But the Foundation is tasked with more than just bootstrapping, and I assume it will continue to exist even after that single task is complete.  What part of your budget will be earmarked for expenses associated with keeping the Foundation afloat?  Will you give to groups that want to take the currency in a direction that goes against your charter?

What if the biggest Freicoin pool operators who together control a supermajority of mining resources become Foundation members?  How would you even know?

The whole reason of starting decentralized is that you can do an end run around these questions.  You seem to think the costs there outweigh the benefits, and that's fine, but it means you must find an alternative mechanism of equitably distributing coins, and "give coins to group that distributes coins" isn't sufficiently worked out to qualify as a mechanism.  That's also fine, but until you get a working mechanism don't refer to your currency as decentralized or anything approaching it.

gmaxwell: You beat me to it by about one minute!

But it reminds me I should have added an obvious but often overlooked cost of taking the centralized approach: where there is authority, appeals to authority are not far behind.  First we get joel's assurance on the other thread that the authority with 80% currency control of XRP is committed to decentralization, then we get beliefs in this thread which can be based on nothing more than assurances.

Users _should_ be skeptical of these approaches.  For all the problems of Bitcoin's coinbase, Satoshi's laptop was whirring along verifying transactions, and you can imagine a cryptocurrency with a tweaked reward algorithm could effectively address that early adopter problem.  But with Freicoin or Ripple, how do the initial coinholders ever prove that they are really out of coins?  If they just randomly give them away immediately, its nearly impossible; on the other hand, if they spend years on this issue they consolidate a power structure.

Handing a large portion of the currency to a central authority is a way of bootstrapping a currency into the hands of a central authority.  I wrote that as a tautology for a reason-- it's self-evident, and calling it "decentralized" in comparison to anything at all is sheer confusion.

There are of course many ways that authority can then divvy up the funds it controls.  There is indeed the potential for a much wider distribution than Bitcoin's coinbase initially reached.  But history is rife with examples of why it's generally a bad idea to trust an authority to complete tasks that benefit the greater good, especially if they necessarily diminish that authority's power at the same time.  Typically centers of power like to consolidate it instead.  There are exceptions, like the GPL tricking copyright law into kicking its own ass, but until I see a comparable level of cleverness in how Ripple or Freicoin dole out their tokens I'll view them with skepticism.  (Though I'll certainly play with them.)

Your last point about the faster transaction times is why I was asking.

We'll just have to see how servers build their UNLs in practice.  I cannot tell from the wiki how Sybil attacks are avoided.  It mentions that the connections can be untrusted as long as > 50% aren't cheating, so this isn't like Convergence or one of the f2f designs like Retroshare.

It doesn't "effectively" have one-- it _has_ one.  And that means the implementation is, at present, effectively a centralized payment network (and I meant to write "effectively" there, and will explain if you truly don't understand the implications).  Additionally, the design-- where someone almost certainly said something like, "Hey, to bootstrap the currency why don't we _design_ it so that 80% of the currency goes to a corporation"-- is a design for a _future_ decentralized digital currency that relies on a centralized body to get it there.  If you're going to be honest you have to call it a centralized payment system with the potential to become decentralized.  That's one of the costs to designing it this way.

Furthermore, it is _highly_ relevant and reassuring to hear that Ripple is committed to getting rid of a current central point of failure.  On the other hand, it was more like a curiosity to read Satoshi saying he wished verification had gone to GPUs a little later than it did.  That's the difference between a centralized and decentralized approach to bootstrapping.

Is there a mechanism to prevent netsplits?

Bitcoin uses the coinbase stuff to hand out the initial distribution.  Ripple XRP is handed out by a single corporation.  A single corporation in control of 80% of the currency is a textbook definition of central authority.

I understand maaku and others like to celebrate the flexibility that comes from separating the coinbase function from transaction verification (and that's fine as long as they don't minimize the costs); regardless, it is simply false to claim Ripple is decentralized given how they've chosen to centrally bootstrap the initial distribution.

I suppose if the corp. ultimately succeeds in distributing this sum before running into any major problems you could then genuinely claim there is no central authority or central point of failure.  But only then.

You can get a monthly VPN for $6.95 which they somehow converted to 34750 XRPs when I checked.  So if you received the 50000XRP chunk from the other thread you can actually use it as payment for a service.  Clever-- or at least moreso than most altcoins to date.

I hope they're smart enough to try the same trick at torrent forums (and that the VPN service is actually decent).

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The only _real_ examples where there would have been a scaling advantage were centralized networks run by Ryan (and maybe a handful of other servers).  I suppose you could call RipplePay and Villages proofs-of-concept with the possibility for a federation glued together by Bitcoins, but afaict nobody ever implemented anything like that.  It was just a series of vague proposals on the mailing list.  (And even if someone did implement that, they would run into the same centralization problems Diaspora has without any of the data control features.)

If you wanted to create a bonafide p2p Ripple without the use of a blockchain, how would you deal with nodes appearing and disappearing just as quickly as they do with Bittorrent?

I'm not saying that the new Ripple solves this-- I'm saying it's the next logical step in a system that feigns decentralization while it implements a centralized solution.  The current Ripple XRP system and (to a large extent) Freicoin are both _centralized_ approaches to digital currencies.  Whether its solving puzzles, downloading/verifying a blockchain, or maintaining the node list, why should the user do any work whatsoever without knowing the rules for how the rewards (or the bulk of the initial rewards) controlled by a single entity are to be divvied up?  This would be like if Bittorrent had started by encouraging hundreds of thousands of nodes to connect through a bunch of trackers, then at some point in the future having a single node with all the files people want start uploading to everyone else.  It's an absurd idea for bootstrapping a network-- or, more properly, it's a way of implementing a protocol without having addressed one of its core problems.

You can't claim to have designed the next generation of digital currency and punt on how to allocate your resources.  Of course I'm happy to be wrong if it turns out that, "just ask and we'll give you some," is the holy grail here.

But the room is only so big, there are many other rooms, and you need XRPs to connect them all together.  Since there is no built-in bootstrapping mechanism for distributing XRPs the workability of the system is questionable, and I'm having a hard time finding mention of a sensible approach to manual bootstrapping from any of the present room inhabitants.  Am I missing something?

As with Freicoin, it seems a step in the wrong direction to go from a working-- if flawed-- example of automated bootstrapping in Bitcoin to an undefined manual one somewhere in the future.

Btw-- wrt:
https://ripple.com/wiki/Distributed_exchange#How_does_Ripple_handle_privacy.3F

I'm not sure who wrote "2. Proxy payments" but the word "anonymize" needs to be removed from that paragraph.  A system where the recipient _and_ the third-party gateway can reveal the sender provides zero anonymity in any sense of the word.  Unless of course you're comfortable saying that using Facebook sometimes and LinkedIn other times anonymizes your online data profile.

There's simply no way to do that, and regardless you really don't want people to have to invest long-term trust to the body tasked with distributing the coins when the whole point of the network and community that uses it is to do an end-run around trust.  It doesn't matter how careful you are about devising bylaws and choosing people with seemingly bulletproof reputations to head up the foundation, because for as long as the foundation is in control of the bulk of those coins they will be a) a centralized point of authority and power and b) a centralized point of failure.  Regarding a: you are up against a community that exists solely to invent technical ways to eat away at centralized power.  Regarding b: reread the previous sentence.

The _only_ way to develop trust in the body tasked with distributing the coins is for the body to distribute the coins, ASAP, in a way that gives as widespread access as possible to the coins while at the same time eating away at its own authority to distribute coins.  There are three parts of this process that must be addressed.  In increasing order of difficulty:

1) The Foundation must prove that the coins are leaving its specific coffers, triggered by requests made through some publicly accessible front end.
2) The Foundation must give evidence that the coins end up in wallets which they don't control.
3) The Foundation must give evidence that coins get sent based on the criteria available to the public on the front end, and not by some mechanism on the back end to which the public does not have access.

1 is trivial. 2 is doable but requires work.  3 is extremely difficult and is what the "Generate Coins" button tried to solve.

Example: David Chaum looks at the website and says, "Neat, I'd like some coins."  He digitally signs a request for coins and posts it on his homepage.  The Foundation sends him some Freicoin.  That satisfies 1 and 2 but not 3.

If you ask me, I think you're being extremely uncreative given the power that multi-sig transactions provide, and I suppose this is partly because there is no simple interface for it yet.

Example:  Throw together some novel mechanism for distribution.  Make a "tentative" release where only 1 party of a required n parties does all the sending of coins.  Block out x amount of time afterward for requests for comments.  If the process didn't work, start over.

For kicks, do it with the entire amount the Foundation controls.  That will get you way more attention than any amount of marketing, and if it works you just created a wider potential userbase than any altcoin has ever had.

Companies doing captcha technology to fight Sybil attacks should be fairly sophisticated nowadays, so put one of them to the test.  If they can get you one million unique recipients you'll give their company half the coins.

These are just off the top of my head, but the point is you have a _lot_ of options here to try something that's never been done before.  IMO forming a slow-moving, centralized bureaucracy isn't the best route, but worse, I doubt your altcoin siblings will walk past that big, centralized pile of cheese much longer before someone decides to "fix the glitch".

You're lucky that the person trying to create a hard fork was incompetent this time around.  I suspect you'll continue to get competing demurrage altcoins until your foundation begins the actual process of bootstrapping that is supposed to be separate from (and more effective than) the bootstrapping that comes from mining.

It's worth noting that Satoshi would have preferred the "democratic" non-GPU mining to get a healthier spread of the coins initially-- that is, a functional "Generate Coins" button lasting, say, a year longer than it actually did would have created a more vibrant economy than the smaller number of specialized GPU miners getting the bulk of the initial coins.  But you have the opposite problem-- where he had a concrete, built-in bootstrapping mechanism that worked from day one but ended too early, you have an abstract, out-of-band bootstrapping mechanism that has yet to be implemented, for which none of the who/what/when/where/how questions have been answered.  Even worse for you, Bitcoin has already created plenty of sophisticated mining rigs that can work for nearly any altcoin, so your technical options for bootstrapping (or I guess the options of any potential grant recipient) are severely limited since any bootstrapping design targeting non-technical users cannot be based off proof-of-work.  (Otherwise it'd just get dominated by the "elite" miners and you would have been better off without the foundation.)

Furthermore, you're going to be subject to endless accusations of social engineering, since the Foundation ostensibly has more goals than just getting coins in the hands of the public.  My only advice is to make the actions of the Foundation specific to bootstrapping the currency and only that, as well as limiting it only to projects that subvert its own authority.  The fewer coins you have sitting in its coffers, the quicker all these problems go away.  But of course you have to spend them in a way that obviously creates a more vibrant economy than just giving it to miners (or at least as effective).  You've set up quite a challenge for this coin, and I doubt you or anyone else associated with the coin have the same level of experience and expertise as you do coding up a complex p2p protocol, since I don't see any concrete details about how any of this would work.  I see no easy way out of these problems, and unfortunately the longer you put them off the worse they will get.

Btw-- when I say bootstrapping, I'm talking about getting the coins out to the general public, as opposed to a more insular circle of users who are a priori interested in topics like cryptography, p2p networks, economics, etc.