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12

Any of those things can happen. Likely, there will be some "hot potato" going on as people rush to offload any IOUs they hold to people who haven't yet gotten the news. It's unlikely other gateways would honor the IOUs unless they were contractually obligated to. This would likely harm their customers as they'd have to make up the losses somehow -- likely ...


10

This question actually gets at the fundamental nature of Ripple. Ripple is essentially an online P2P implementation of free banking. Free banking is somewhat similar to how banking worked in the United States for much of the 19th Century (with a few major caveats) prior to the Federal Reserve and FDIC systems, and indeed back then banks would sometimes just ...


9

That's just reality. IOUs will be valued differently depending on who you got them from. You probably value $100 in cash higher than the fact that your friend Joe owes you $100. You can use the cash right away while you have to wait for Joe to pay you back or you could transfer that debt to some common friend of you and Joe's (a friend who is fine with Joe ...


7

which one happens first in a gateway, (a) users pay money to gateway, or (b) gateways transfer IOUs to user? what guaranties step 2 happens? The gateway gets to set its own policies. However, the general consensus is that gateways should avoid risk because they'd have to pass losses onto their customers in the form of higher fees. So you probably shouldn't ...


6

You're definitely right that tainted coins would be bad for Bitcoin. For something to be useful as a medium of exchange, you really want it to be fungible. If something costs $35, that price is useful because there's nothing special about any particular bill or coin and you can form that $35 however you want. Since not all IOUs in the same currency are ...


6

Ripple doesn't support anything like this directly. You could get the effect if you really needed it though. Simply create a new account and extend the amount of total trust you want to that new account. Then have the new account extend the individual trust to each of the other accounts. This will mean that people paying you with IOUs from any of the ...


5

To pay someone, say, $10, you must deliver to them an asset that they have decided is worth $10. A person can never be made to hold an asset they did not agree to hold. These are core Ripple design rules that apply to all IOUs. The main reason for not allowing the "harmless" payment is that it might not be clear to the recipient that the payment is one he is ...


5

It doesn't differ. Gateways are just issuers that you somehow have more trust for, so much trust that their IOUs can basically be treated like cash. This is what happens in the current financial system, when you see $100 on your bank account it doesn't mean that you actually have $100. It just means that you hold your bank IOUs. From what I understand ...


4

If I understand correctly, IOUs issued by different gateways are not mutually fungible, even if denominated in the same underlying fiat currency. So basically I you were to hold IOUs from a gateway and that gateway vanished, or simply refused to honour its IOUs you'd be out of your money.


4

There is no official list of Ripple Gateways because there is no such thing as an "official" gateway. Anyone can operate one without registering anywhere (other than as required by local laws in their jurisdiction). That hinders the creation of any kind of comprehensive list. There are a few people that attempt to keep somewhat comprehensive lists but their ...


4

User A can only send IOUs that user B trusts. Trust does not have to exist between A and B. So if user B only trusts bitstamp for 100 USD and has 50 USD already in that wallet :- User A can send up to 50 USD to User B as long as the issuer was bitstamp The protocol will only allow IOUs to be sent to an address (from another address) which has a trust for ...


3

Universal In most if not all Crypto 2.0 systems, a Gateway can: Charge the users for IOU deposits Charge the users for IOU withdrawals Ripple In Ripple, a Gateway can set a percentage fee for whenever their IOU is transferred from one user to another. Say, at 1% fee, to send someone $100, one needs to spend $101. The recipient receives $100, while the ...


3

We debated how to handle XRP IOUs during the design. Ultimately, we decided not to have any official support of them because of the potential for user confusion. However, we did reserve the currency name "XRR" for IOUs denominated in XRPs. There is no built in mechanism to pay them off with XRPs, but it's not difficult to place a 1-to-1 exchange offer. Such ...


3

Transfer fees are charged whenever accounts with one set have a balance moved between other accounts. For payments, the sender always pays no matter which balances are adjusted, for trades the account 'sending/giving' pays. So if there is a trade of USD/Bitstamp for BTC/DividendRippler between two accounts (it doesn't matter which entered the initial trade ...


2

What will happen when a gateway refuses to accept IOUs, and transfer money back to user? Then it's no longer a gateway, it's just some random user of Ripple, and nobody should do business with it. I'd only do business with a gateway that I could sue or press charges against if they reneged. Is there anything similar to 'interest rate' for holding IOUs ...


2

To find all the accounts that hold an asset, e.g. USD/gw1, you just need to use the account_lines API on the gw1 account and filter out the USD entries (or whatever currency code you are interested in). Although you could recursively look up the account lines of each found account in turn, that doesn't tell you anything more about who "holds the IOUs from a ...


2

Gateways can refuse to issue or redeem fractional amounts and users can refuse to pay them. But there is no authority to say to someone "you may not hold a fractional amount of this currency". Nobody can stop you from holding fractional amounts if you wish to.


1

It is definitely still possible to issue your own assets. Here is the process: Create an account on the Ripple network, you will need to get someone to send you enough XRP to perform transactions, $1 worth should easily do it. Submit a transaction to set the DefaultRipple flag on the account. If you don't do this, people who hold your asset will not be able ...


1

All existing conventional securities (currencies, stocks, bonds, debt-based "fiat" cash, etc) that have any counter party risk are "tainted" by the issuer (Apple, The Fed, BOJ, etc), Bitcoin, gold, silver, etc are not tainted because they have no issuing counter party (i.e. they represent nobody else's liability). As I understand it, Ripple is primary a ...


1

The same that happens when an exchange or bitcoin business that accepts deposits disappears: users will likely lose their deposits. Unless the gateway somehow binds their IOUs issuance to a legal contract through some digital signature scheme. In that case, users may be able to sue them or get something from the bankruptcy process of the company.


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