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How does Ripple charge fees for XRP-only transactions to compensate nodes?

I've heard of what I can only describe as a "network fee", that some XRP are burned per transaction. What is the motivation for that?

I'm also unsure of how the node types are compensated. There seems to be consensus builders and some kind of set of miners, but I can't be sure. Are they also compensated through BitCoin type fees?

  • possible duplicate of What are the transaction fees with Ripple.com? – dchapes Feb 14 '14 at 18:48
  • @dchapes Somewhat. Should I change to "how are ripple nodes compensated"? – user5107 Feb 14 '14 at 18:56
  • I'm not sure (I don't claim to be a be a StackExchange expert). I can't find another Q/A here that directly addresses why anyone would run a validator; on first reading I didn't see that as the main focus of this question. I'd guess that a question (probably a pre-existing one) should address the how and why of XRP fees and a separate one (this one?) could address the why companies, individuals would run validators and/or public Ripple servers. – dchapes Feb 14 '14 at 19:33
  • @dchapes Thank you dchapes! The infrastructure fees was my intent. Edited. – user5107 Feb 14 '14 at 19:38
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During normal operations, the "fee" is set to be a small fraction of .01 USD. This is for ALL transactions, regardless of the units being exchanged through the system.

This is a protection measure for the ledger against spam attacks. If there was an attempt to overload the consensus system, the fee would increase in increments. It would still be a very small amount for a normal user and would be a financial hindrance to a spam attack.

There is no monetary compensation for being a part of the consensus. The base fees and load fees are destroyed. Ripples are not mined, it was all created at once. People will likely be running their own servers for fast, secure access to consensus, not coin rewards.

A basic and technical overview of transaction fees and how they escalate to prevent spam https://ripple.com/wiki/Transaction_Fee

How consensus works. https://ripple.com/wiki/Consensus
"Finding consensus by trusting validators not to collude is a simple and strong way to establish the valid ledger. Because, the network is not relying on proof work, this consensus process is fast and allows the Ripple network to validate ledgers in seconds."

An excellent visual explanation of consensus. Also shows how transactions can be verified within seconds as opposed to the minutes required for many other crypto-currencies. http://www.youtube.com/watch?v=pj1QVb1vlC0

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    Though Ripple works vastly differently from crypto-currencies such as Bitcoin, I've found a simple way to explain it to people familiar with only the latter is to liken it to a crypto-currency that was 100% pre-mined "on purpose" since such pre-mining is absolutely fundamental to the way its network is supposed to work: burning txn fees rather than redistributing them. What I wonder is what would happen if/when the number of freely usable ripples comes too low - another massive mining? Massive migration to XRP network 2.0? – Joe Pineda Feb 14 '14 at 0:28
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    Considering how divisible Ripples are, that sounds like an incredible problem to have. Not realistic in my opinion though. – NomadicPeach Feb 14 '14 at 1:56
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    @JoePineda The community will face problems of one kind of another and will have to come to a consensus on how to handle it. Ripple's consensus mechanism provides a specific way to do that, by the way. One thing they could do is multiply all XRP balances by, say, 1,000 to restore sufficient divisibility. But it would take more than a century to get there and most likely so many other things will have changed by then, if Ripple is still around, that some other solution will be better. Until we know in what form we face that problem, if ever, we can only guess what solutions make sense. – David Schwartz Feb 14 '14 at 11:34

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