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33

The details are very complex, but the core concept is fairly simple. Ripple solves the double-spend problem by consensus. The analogy I use is an "agreement room". To walk into the room, you have to agree with everyone who is already in there. If you want to disagree, you have to leave and form your own room. Everyone who is honest wants to get into the ...


22

There are several major differences. Bitcoin is a currency with a built in payment system for its currency. The XRP Ledger is a payment system for arbitrary currencies with support for cross-currency transactions. One big difference is that currencies (other than XRP) are represented as debts (IOUs) on the ledger. This is much the way currencies are ...


19

The big advantage on the Bitcoin side is that its technology is now well-proven. Ripple's consensus system is the newcomer. Ripple was designed by people who had the benefit of seeing exactly what Bitcoin was doing and its strengths and weaknesses. Ripple's consensus process can validate a transaction such that irreversibility is reasonably assured much ...


18

This is answered in the official wiki: Like Bitcoin: ripple is a distributed peer-to-peer payment network ripple transactions are irreversible, sent over the Internet, and counterfeit proof ripple uses the same underlying cryptography as Bitcoin ripple has multi-signature support ripple has low to no transaction fees ripple servers can ...


17

The Stellar network does not have a mining-based currency. At the network's genesis, 100 billion stellars were created. The only other stellar creation mechanism is inflation. To account for both economic growth and lost stellars, there is a fixed 1% annual rate of new stellar creation. These new stellars will be generated on a weekly basis and distributed ...


14

They use hot and cold wallets for security reasons. The address you trust can create an infinite number of IOUs and so its key must be carefully secured. The address they transferred to you from must be able to perform transactions easily and quickly and so cannot be fully secured.


14

Time will tell. There are two main accusations against Ripple: it claims to be open and decentralised, but currently it isn't, since the server is closed source and controlled exclusively by Ripple owners (OpenCoin) it came with a lot of preminted coins, some of which are supposed to be distributed freely, while others are to be kept by Ripple developers ...


13

I think it's necessary to first consider the question: Without ripple, how do banks "actually transfer money" from one bank to another? Suppose that you and I are banks, and I want to send you $10 million. I'm probably not going to actually physically ship you $10 million worth of bills and coins. Instead, there are a few ways we could do this: You and I ...


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 ...


11

Chris Larsen has been publicly identified as CEO of OpenCoin, the company behind the new Ripple. The core developers have been publicly identified as Jed McCaleb, Arthur Britto, Stefan Thomas, and me (David Schwartz).


11

Opencoin plans to give away 50 billion XRP. It is actually in Opencoin's best interest to make this distribution as wide as possible as the system will only be successful if it can gain a critical mass of users. Giving away enough XRP to keep the system as cheap as possible for as many people as possible for as long as possible is the only strategy they ...


11

Ripple solves the double spend problem by consensus. Everyone who wants to run a server on the Ripple network picks a set of validators and tries to reach a consensus with them on which transactions are valid. The Ripple equivalent of Bitcoin's 51% attack would be if some group obtained control over enough validators that the consensus process failed. ...


11

[Note: This answers the question as written and at the time it was written (and for quite some time afterwords). See a later answer for the current state.] The Stellar code is a straight fork of Ripple with mostly trivial changes. It does have certain controversial features omitted (I assume on purpose) such as freezing. From a server and protocol ...


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 ...


10

Doing so would subject OpenCoin to lawsuits due to promissory estoppel. OpenCoin's statement that they will not do so is effectively a warranty. And, of course, it would be a completely self-destructive thing for them to do. (I am an employee of OpenCoin, speaking only for myself.)


10

The way Ripple's public ledger system works is that you propose a payment by specifying the source and destination accounts and currencies and then the system gives you a quote based on public offers. You can then specify a maximum amount you are willing to pay to complete the payment and submit it. If the payment is possible for the amount you offered or ...


9

Update 2: There are now more traditional price / volume charts: BTC:Bitstamp/XRP at RippleCharts.com USD:Bitstamp/XRP at RippleCharts.com Update: Ripple Live Orderbook and Charts by webr3 provides various bitstamp style charts and orderbooks for various XRP/xxx pairs. Update: The Ripple Ledger Explorer by melvster shows a graph of Ripple vs Bitcoin ...


9

There is no mining in Ripple. The incentive to run a client is to use the Ripple network. There are several incentives to running a server. The main one, as Lohoris suggested, is to support the network. This is the same reason Bitcoin nodes relay transactions. From the wiki: Anyone whose business relies on the network: Gateways Merchants ...


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 ...


9

Ripple.com only hosts the javascript client which talks to the Ripple network via websockets. Once Ripple is out of beta there will likely be different clients to choose from (smart phone apps; command line clients; desktop apps; etc). The existing javascript client is already open source and you can host it locally if you like (and have the technical know-...


9

The Ripple Wiki has a section on running a Gateway. Basic summary: Determine what you will be a gateway for (e.g. bitcoin, alt-coin, fiat, collector coins, etc) Accept those items outside of Ripple (via a website, in person, via mail, etc) Issue IOU in Ripple for items received (make a Ripple payment) Publish and follow a redemption agreement; what you ...


9

We have publicly stated that we don't expect the code to be made publicly available in less than two months and that we would consider it a failure if we didn't make the code publicly available before the end of the year. Right now, we've received a lot of public feedback and are trying to make changes responsive to that feedback. See this github issue for ...


9

After digging some more and finding pretty much every possible interpretation on different media outlets, I just called Nick Riegger, the press spokesman of Fidor Bank AG. According to my conversation with Nick Riegger: Fidor Bank AG has already started implementing support for Ripple on their back end. They will first be on the lookout for business ...


9

99% of altcoins claim an "innovation" that is broken or unproven. I would say that the first thing to do is look at unique codebases that aren't based on Bitcoin, which basically means (besides Bitcoin) you should look at Ethereum, Ripple, NXT, Monero, BitShares. Then if you're bored, PeerCoin / NuBits and Lisk. Once you are done with those you can look at ...


8

You can't get money on the Ripple network unless you trust someone to owe it to you. To have $100 in the Ripple network, someone must owe you that $100. If you haven't chosen to trust anyone to owe you money, nobody can owe you $100 and thus you can't have any money. So when you give money to a gateway, you must allow them to pay you in IOUs. And if someone ...


8

The transaction fees in Ripple are simply destroyed. There is no mining. We had to use ripples because we couldn't use dollars, both because dollars in Ripple can only be represented as debt (Who would owe them to the system? Who would they go to?) and because Ripple is intended to be cross-currency (How would you manage exchange rates?). The beauty of ...


8

These are Ripple's largest known weaknesses (not including weaknesses common to Ripple and Bitcoin): Because the Ripple network can't move actual fiat currencies, balances in Ripple act like bank balances. If the bank somehow defaults on its obligation, people won't actually have the money they thought they had. This is not a big problem if you're just ...


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 ...


7

The default fee for a transaction is 0.00001 XRP. But the fee is not fixed. Quoting the wiki: Transaction fees are adjusted based on two factors: base fee and load fee base fee: long term fee adjustments Since transaction fees are paid in XRP and the price of XRP may change overtime, to keep the price of transactions affordable, Ripple uses ...


7

I haven't seen the Ripple code so I can't comment on the latest endeavor, but Ripple as a concept (by Ryan Fugger FYI) is the combination of 2 mechanisms: The ability to extend a credit line to any of your friends, in any currency. The ability to make payments that hop across these credit lines, P2P, like a "Six degrees of separation" from sender to ...


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