Rise of Bitcoin Competitor Ripple Creates Wealth to Rival Zuckerberg | Hacker News Reader

Rise of Bitcoin Competitor Ripple Creates Wealth to Rival Zuckerberg

nytimes.com

78 pointsmiobrien105 comments

I just read a critical analysis about Ripple [1] then saw this thread on HN. I quote the conclusion

"XRP is 100% premined, Ripple holds 60% of the supply, controls which nodes are selected as “trustworthy” to confirm transactions, while they have paid nothing to create those tokens that people are so willingly buying at $4+ per piece and thereby make the creators insanely rich. Let us call it what it really is, digital fiat, the renewed version of the debt-based traditional fiat system, leveraged by latest technology – which eventually has nothing to do with cryptocurrency whatsoever."

[1] https://cryptoyoda1338.wordpress.com/2018/01/04/the-truth-ab...

I should make my own cryptocurrency, generate $60 billion out of thin air.

You don't even need to go that far, just generate a bunch of UUIDs and sell them to people.

When you can explain why people trade hard-earned cash for cryptocurrency but would never buy your UUIDs, then you'll understand the flaw in your argument.

Hint: It's not because they're stupid or deceived. Go deeper.

Follow me on this one. If I hold all my currency in a service like Coinbase, how do I know that I actually bought bitcoins? All I see is a pretty interface that says "you have x bitcoins" and maybe a list of hashes and whatnot.

To a non-technical, these hashes and numbers are totally meaningless. As long as everything is done through my service (coinbase, for example) nobody has any idea if there are actually bitcoins behind these numbers or not. You can't hold a bitcoin, I can't ask you to mail me them so I can verify that they exist. The only thing you can do is trust the blockchain, which you definitely need a technical background to understand.

So yes, with enough smoke and mirrors, I believe you could setup a service to sell people UUIDs. It hinges on non-technicals using only my service though. Obviously you couldn't do this with a real cryptocurrency, because the blockchain would tell you if the coins actually exist or not.

I might be wrong, but if you keep your coins on an exchange they are in a wallet of the exchange, with a private key of the exchange. They are linked to your account but that information is not stored in the blockchain. It's in the contract between you and the exchange. Very similar to fiat money in a bank computer. To own your bitcoina they must be in your computer. Make backups, trust your hardware. I suggest a pre 2013 Atom :-)

A couple other discussions from earlier this week.

https://news.ycombinator.com/item?id=16071731 (Yesterday)

https://news.ycombinator.com/item?id=16057883 (Two days ago)

I found the top comment in yesterday's thread rather interesting. If there is a hard cap of 100 billion Ripple coins that can exist, and Ripple Labs already owns 60% of them, at today's price of $3.33 that would mean Ripple Labs has $3.33 * 0.60 * 100billion = $200 Billion in assets, making it one of the largest companies in the world. It's complete madness.

but they can't sell any of it without annihilating the market. It's like I sell a diamond to my friend for 1 billion dollars, but she pays me 1$ every year for a billion years. So formally I am a billionaire, but actually I am one diamond short.

$1/year for a billion years isn't worth a billion dollars. It's essentially a perpetuity, which is worth $1 / the prevailing interest rate. If that rate is 5%, you're only worth $20

That's like saying Bezos or Gates aren't really worth ~60B dollars, like the news are repeatedly saying though. Isn't that right? Considering most of their wealth is in stocks.

It is technically right. However, even in a 100% firesale, they could make - say - $10bn to $20bn, because the fundamentals of their companies' earnings and dividends would entice sufficiently many new investors to step into the market.

Cryptocoins have no such fundamental value backstop - someone desperately trying to sell a large fraction of the market cap would drive the price to basically zero in short order.

It depends. Surely they could not instantly dump all of their "ripple assets" and expect the market to absorb it. But currently the 24-hours trading volume is 6.6 billion USD (https://www.livecoinwatch.com/price/Ripple-XRP). A huge part of that may be wash trading due to some zero-fee exchangers. Nevertheless I am speachless how relatively speaking a lot of money is actually being poured into this right now.

> Surely they could not instantly dump all of their "ripple assets"

They can't. They've escrowed that 60 billion away and will release it to institutions at regular intervals. Any XRP that isn't bought will be put back in escrow. The executives that have large amounts of XRP themselves are contractually obligated to not dump it. They can only sell a certain amount per week. I think its like 10,000 or something (but I could be wrong on that).

The market depth is a more interesting metric than volume. As you say wash trades, or just short-term speculative trades, inflate volume without actually impacting the size of the market.

Tech, meet Econ 101

Whenever I see extremely disproportionate volume coming from Bitthumb I'm immediately skeptical it's anything more than a pump and dump cycle. Same thing happened with BCH among others.

yeah bithumb is insane. I'm scared to assume how much money involved and why nobody is trying to/cant arbitrage this. It's like complete noncence at this point. Whole different price universe. And i can't belive that it is some random korean dude that can't register on bitfinex or some other exchange and buy the coin he wants with 30-60% discount.

If this’s not a bubble I don’t know what it’s

Since everybody and their grandmother is telling these days it's a bubble, I've somehow come to the believe that this time it's not a bubble. Why?

Well, during the mortgage crisis, very few economists would actually claim it was a bubble. Perhaps it was 5% - 10%. At least this was what appeared in the news. The big shots at the central banks didn't see this bubble either, for the most part. But now every big banker is saying Bitcoin is a bubble.

For the dot-com bubble it was much the same. The majority of people (economists, bankers and the like) that should recognise a bubble were only able to call it a bubble in hindsight.

The more I hear this is a bubble, the more of my spare money I will invest into cryptos.

> Well, during the mortgage crisis, very few economists would actually claim it was a bubble.

During the mortgage crisis, basically every notable economist and economic commentator was calling it a bubble; some had been for several years, and some only very late (but still before it popped), but it absolutely is not the case that the concept was rare my stated.

The closest your statement is to truth is that there weren't lots of people accurately predicting the timing of the bubble popping, but that's a different thing than recognizing the bubble.

> For the dot-com bubble it was much the same.

It's true that he dot-com bubble was much the same as the mortgage bubble, but only in that it equally did not match your “no one was calling it a bubble” description.

At the height of the dotcom bubble, people were very widely calling it an insane bubble.

I read just about every financial story about it that came out during those ~2.5 years it lasted (the actual bubble was short lived). It was fairly evenly split between two camps, one represented by the bubble pumpers calling it the new economy (or different this time; they had lots of bumper sticker sayings), the other by traditionalists focused on relatively normal valuation metrics. Guess who prevailed. Warren Buffett, as always. Nearly all of the public dotcoms collapsed or were liquidated for pennies on the dollar. Few survived and thrived, Amazon barely made it out alive. Those thousand crypto coins? They will not survive. A few will, and they'll thrive - thrive meaning, they'll be lucky to be worth what they are today, in another ten years.

This seems like confirmation bias to me. How many bubbles or fads were called by people that evaporated (beanie babies, troll dolls, etc)?

What makes me certain it's a bubble is all the stories my wife tells me of people from her native Malaysia. Her mother wants to buy in, her mothers friends want to buy in, people take out their pension funds for it, a guy sold his profitable albeit small restaurant to go all-in on bitcoin and so on.

Now it's somewhat understandable given the fact that Malaysias currency has not been very stable in recent years and people are struggling. But people investing all they have into such a volatile market is going to lead to a rude awakening.

Only if you are talking with reasonable people. If you were inside the crypto-groups, you'll know that this is a bubble.

The type of investor behavior described here is emblematic of a bubble :

https://www.bloomberg.com/news/articles/2017-12-21/crypto-cr...

Just US market capitalization grew up like 50% in just one year. With all those trillions sloshing around ... the cryptos' $300B is just meager 3% of those $10T that US market bubbled up in the 2017. Add the rest of the world ... The money pressure is growing and it tries to find any place to get into, and until that pressure is relieved the bubbling will continue. Ie. like with any bubble, there is no much value in seeing that it is a bubble, the value is in being able to tell when it is going to burst.

And they say this money is owned by just 10% of us all. I think this is what is driving valuations. People who literally can afford to lose money.

The combined cryptocurrency market cap is around $700B atm which imo is very low comparing to what they are offering

Yeah, he's pretty rich... if he cashes all his Ripple at the price point of the current highest bidder. However, said bidder will not want all of it, so some will go at a lower price, and so on. Eventually the price may become extremely low due to the very high supply (which diminishes demand again). I wonder if this is taken into account. All crypto starters are rich in their own coins but they can never cash it in, at least not all at once.

Same holds true for "normal" money since the gold standard was left behind of course.

Their wealth depends on someone willing to pay a price, she or he is willing to pay said price because she or he expects the next person to pay even more at some point. Classic pyramid. Bad? I don't think so. Heading for an eventual crash? I think it will, at some point. Hopefully I'll get rich before then.

What Ripple has going for it is that they may actually succeed at making it a system banks will adopt. If futures become available, insuring parties against fluctuations during transfer, Ripple may have actual value over just the next girl/guy wanting it more than you.

Wanna be billionaire buddies? Issue 1 billion teekertcoins, I'll buy one from you for $1 if you do the same.

Sounds good, Three Commas Club here we come! (Let me first start with a course on constructing Blockchains though... or who cares, lets just use an Excel file for bookkeeping!)

Gotta use Google Sheets or it won't be decentralized /s

The thesis statement here is value itself is an arbitrary concept and is such because we say it is. It's completely imaginary, often times irrational and a shared fiction. The fact that we have conventional billionaires at all is almost a ridiculous concept in and of itself, as any amount of tangible work is always done en masse, not by a singular person. Works can be created by individual contributors but it is the mass that gives them value. Put those people on an island and those works become meaningless.

In the case of cryptocurrency, the work here is being done, again, by many people. Economics is, as a fundamental matter, the study of choice. People are, for whatever reason, choosing to do both work and ascribe value to these systems, and it just so happens that these systems are designed in such a way to funnel that work into the hands of mostly a few. This is not owing to any revelation or discovery or intellectual pursuit, but represents pure greed and capitalism --- the selfish pursuit of benefit from fellow man.

Whoever says bitcoin and the other currencies are some kind of panacea that will free us from the shackles of government fiat, big corporations and stymied control of wealth need only look to stories like these, which, are proof that this is just a different and new kind of master.

Which one of these properties of cryptocurrency is imaginary?

  Coins cant be faked or duplicated
  No one can create them at will
  They can be transmitted quickly/globally with low fees (excluding bitcoin of course) 
  You can store them yourself, no bank needed
  Sending huge sums of money is no problem
  Relatively simple design, 8 page white paper
  Has worked as designed for almost a decade

Seems like crypto has a lot unique intrinsic value that surpasses traditional currencies to date.

The only thing imaginary is your imagination. Crypto is very real. Even people on an island would eventually find a common denominator in which to store value which has many of the same properties above.

> No one can create them at will

Didn't Ripple Labs create 100 bilion ripple at will?

Yeah ripple is a token not a currency they can generate new ripple at will but since the founder has a large stake he has an incentive to not flood the market. But ripple is not the future it's a stopgap running on centralized servers it's not revolutionary like etherium

Because the Ethereum people only created 80 million tokens out of thin air?

*ethereum

Someone is going to owe a lot of taxes?

You’ve missed the point a bit which is why you are getting down voted. Much of our non physical world (money, value etc) are abstractions for something else and therefore the abstraction only has value in humanity’s collective imagination. If you try to give a goat farmer in the desert a bit coin he won’t take it as to him it literally has no value as he likely can’t access the internet or work out how to turn it in to something else. If we ALL collectively decided tomorrow that bit coins have no value (or the US dollar even) then it would loose its value. Much of our non physical world only stands up because we all agree it does, enough people change their minds and it all falls down.

You make it sound like 'anything' could be a currency. When in reality finding a common medium of exchange is extremely difficult, and must meet a lot of the properties I listed above. In terms of 'currency technology' crypto is a huge advance over our current standard currencies.

Anything can be a currency so long as enough people agree there is value. Bristol (a smallish city in the UK) has it's own currency that can be used locally that is accepted by shop keepers etc. You can't pay your mortgage with it but you can buy you apples with it.

We could use shiny stones as currency if enough people agreed it had value.

I think you are thinking about currency within the confines of the current system (eg government, laws etc). What I am saying is that government and laws are only valid in our collective imaginations and therefore everything is imaginary and made up (the USD is just as imaginary as bitcoin, it's just that more people believe in the USD so it is mainstream) and we can collectively apply value to anything want to and remove value from anything we want to.

'if people agreed it had value' - That is a big if, don't trivialize it. The value of a currency is dependent on a ton of the properties I listed above.

It's not even the same thing as normal fiat currency. It's a commodity whose value is predicated upon its shininess, rarity and ease of transfer.

It's basically gold if arbitrary bits of gold could be sent via email.

Bitcoin probably wouldn't have taken off at all if the financial markets were quite so desperate for new toys to speculate with. Bitcoin is the bastard step-child of low interest rates.

It's massively exposed to the threat of financial regulation, too. If the US government suddenly decided that it was going to assume bitcoin transfers are the result of money laundering until proven otherwise and that it's a consumer product that you have to pay sales tax on, its value would plummet to embarrassing depths.

I said it before and say it again. These things you call cryptocurrencies can be anything you want but currencies. Who ever claims the contrary has no clue about how a currency works.

If you claim this is a highly speculative asset, then yeah, you are right. But if you really want to call this a currency, you have to convince a government to use it as an official currency. No central bank in this world will accept to use a currency that is out of its control, that can't depreciate or appreciate at will.

> But if you really want to call this a currency, you have to convince a government to use it as an official currency

Since when does a currency have to come from a government? People used representative money in forms of IOUs before those were formally issued by governments. Sure, we've moved to government-issued fiat since, because it solved a coordination problem (how do you ensure the value of money doesn't unpredictably change), but that's just one possible solution now.

Crypto is already being used as a currency. And governments have no ability to depreciate it. I don't know what will happen next, but that is the reality today.

What I do know is a lot of people find value in a currency that cannot be depreciated at will.

> Has worked as designed for almost a decade

"worked as designed" can be said for every thing. Everything works as designed. Yet gets hacked/stolen/cracked/misused. Banks are working as designed. And so is the government. Just that the majority will dislike the design because they have no say in it.

> You can store them yourself, no bank needed

And then you can loose it yourself too. Remove all the safeguards which was built thru decades of learning and allow everyone to shoot themselves and everyone else in the foot.

If there were a bug found in a crypto currency, it could easily be worth zero the next day.

The fact that the current blockchain design has withstood people trying to break it for so long gives the currency a greater value.

Would you rather store value in a crypto that is a brand new design, or something that has withstood the test of time?

> And then you can loose it yourself too.

Admittedly, hardware wallets do a good job of keeping your private keys secure, allowing you to safely transact even on a malware infested PC.

Doesn't that defeat the purpose of having soft currency ? Hardware wallets sure can be stolen physically right ? Leaving that chuck of currency useless (if not transferred fraudulently)

Think of a hardware wallet as of a credit card. You will have some mechanism protecting it from being used when you're not next to it (password/pin); you will have some cold recovery option if you lose it (like a long passphrase stored in a safe deposit box).

But, like a credit card, the send/receive operations are performed on a secure, limited scope system (rather than an easily-compromised PC)

That point bears repeating: if you hold a wallet, you are responsible for having backups. It's very valuable data.

Either use two or more hardware wallets or keep a paper wallet (a printout of the private keys) in a secure place.

> Seems like crypto has a lot unique intrinsic value that surpasses traditional currencies to date.

Only if they are used as currency in the marketplace. If cryptocurrencies are only an investment point they are a bubble with little or no practical value. The only value is to other investors.

Personally, I find cryptocurrencies volatile and as such would not use them to purchase anything.

I pay my friends for drinks in crypto, they pay me (usually ltc, ether, or doge). It's quick and easy with a wallet on your phone like Jaxx. No venmo, no paypal, no bank account necessary. I use crypto to store and exchange value today. It will only get more popular as it becomes easier.

I encourage everyone to try it. Send $100 of crypto to a wallet on your phone and use it to pay people you owe for small stuff. It's fun and easy. It also gets your friends bootstrapped with crypto without needing to use coinbase or gemini or whatever.

Also wallets like Jaxx are deterministic, meaning you can use 12 unique words to recover your wallet anywhere - even if you lose your phone.

Yes, but people also use beer as a currency. Probably much more than they use cryptos as a currency. In this context, when talking about currency, we mean at the same scale as fiat currency. Else, the currency discussion is senseless.

There are also downsides of course too. But I think the reality is that the future will have both crypto currencies and fiat currencies. Both have advantages.

Nitpick... crypto currencies are fiat currencies (if they're currencies at all, rather than commododites)

Edit: Fiat just means its value is driven by supply/demand rather than being backed by something like gold.

https://en.wikipedia.org/wiki/Fiat_money

Crypto currencies are not fiat by this definition, since they have nothing to do with governments.

Mineable crypto is not fiat because it cannot be created or destroyed at will. That is what gives it value over a fiat currency. You don't have to worry about a central government devaluing it or inflating it artificially.

I see your point, you're tying "fiat" to the act of spontaneous creation at will rather than the lack of a backing commodity, but I don't agree that definition, and even if I did I'm not sure it's as cast-iron a distinction as you're implying.

You absolutely do have to worry about price manipulation... the only difference is that it's not specifically governments it's just the disproportionately wealthy. I don't see that as a worthwhile distinction.

https://venturebeat.com/2017/12/14/how-bots-are-manipulating...

https://www.zerohedge.com/news/2017-08-06/mysterious-trader-...

https://cointelegraph.com/news/single-trader-with-enormous-b...

Similarly you can destroy cryptocurrency (some at least), and it can be created. The fact that the creation rate is constrained by the prudence of an algorithm designer rather than constrained by the prudence of a central banker seems like another arbitrary distinction.

To me it feels like crypto proponents want a fancy economics term for othering conventional currencies, so the definition is being bent to fit.

History has shown us that relying 'prudence of a central banker' is a really bad idea. Eventually shit hits the fan and they go on a spree printing money. The huge advance crypto has brought us is a solution to this very problem.

> History has shown us that relying 'prudence of a central banker' is a really bad idea

Sorry, no. History shows no such thing.

Just because $BAD_THING sometimes happens under $APPROACH doesn't mean that any other approach would necessarily be an improvement.

> The huge advance crypto has brought us is a solution to this very problem.

Poverty is a problem. Disease is a problem. Quantitative easing is a tool. If you believe that QE is bad, you're free to push for laws passed that take away that tool from central bankers... but you'll have a hard time because it's a very powerful tool for guiding economies.

You may believe that governments can't be trusted with that sort of thing, but Friedman-style laissez faire economics isn't the big success story that many seem to think. The US has become less regulated since Reagan's inauguration and in that time has lost it's position as the world's prime economic superpower to China, a managed economy much closer to the Keynesian model.

You watch how China reacts to BTC. It'll encourage adoption everywhere except within its own borders. Why do you think that might be?

You now only have to worry about your "currency" crashing by more than 40% overnight.

Keep in mind relatively we're still in the early days of crypto. Though it's not like fiat currencies are immune to crashes. Look at history.

I respect fully disagree wit many of your statements. From my experience I've seen these kind of schemes comes and go:

* Coins can't be faked or duplicated - YET - If you get a bot net arguing other the same coin either someone is going to get the coin or the coin is going to get lost.

It kinda like the Captain Midnight and HBO. If you haven't heard about HBO and some other TV networks has launched a communication satellite and professed no one could take it over. Some guy said they were wrong but no one listen to him. Then HBO started raising fees. So the guy overrode their satellite with narrow, focused a pirate signal. Today that would be less then $1,000 of equipment he had for his business.

* No one can create them at will - Except the bank. Someone is issuing those coins to begin with. What is stopping them from 'printing more money?' After all coins are going to get lost over over time. You'll need to replace them. People are going to exchange their currency from X currency to Y currency. Then what happens when someone finds a huge missing wallet?

Both cases are going cause an inflation / deflation cycle. During the inflation cycle this will drive the value up to where no one but the richest people can afford to use it because transaction fees cost too much. The deflation cycle are ruin entire fortunes.

* They can be transmitted quickly/globally with low fees (excluding bitcoin of course) - Won't Ripple and other cryptocurrencies eventually succumb to the same issue over time? You can make shard server but then you're centralizing the network and you get back to where you started.

* You can store them yourself, no bank needed - True enough. Just don't lose that digital wallet.

* Sending huge sums of money is no problem - That getting harder in certain countries as regulations are cracking down. Plus you need access to a terminal. In some areas that's just not practical.

* Relatively simple design, 8 page white paper - but how many other white papers do you need to understand to understand those 8 pages.

* Has worked as designed for almost a decade - And the current banking systems have been working for thousand of years. Does that invalidate this statement?

You said that 'crypto has a lot unique intrinsic value that surpasses traditional currencies to date.' I see crypto more as tulips then anything else. In Holland this bulbs of those beautiful spring flowers. Anyone could grow and make more. They had a definite expiration period. Then someone said 'wait those are just flowers.' And Holland's economy fell apart almost overnight.

My issues with 'crypto' are:

* No real physical assets to back it up - Its just numbers and algorithms.

* Algorithms are broken over time - Just look at the history of SSL / TLS

* The issuing source can issue more 'units' at anytime - The single issuing source of hashes IS the central bank. This causes deflation and devalue the overall market.

* Inflationary / Deflationary Cycle - The currency will inflate until it gets so big that processing fees can't be paid.

* The rich get richer and the poor get poorer - You either buy the farming equipment right away or get the scraps from other people that joined the bandwagon.

* Corruption - Just look at the Coinbase 'alleged' insider trading

Tulips can be created by anyone with some dirt. Mineable crypto is super difficult to create yourself. Tulips are also hard to distinguish, difficult to transport, ephemeral.

Understand that and you'll understand why most of your arguments above are poor.

Anyone can create new crypto coins. Did you forget about the ICO craze?

Different cryptos are not compatible with one another. And the value is each is determined by a myriad of intrinsic properties. At the moment I'd say LTC is the most attractive.

> The thesis statement here is value itself is an arbitrary concept and is such because we say it is.

Depending on how you view the world, this can seem like pretty much a very obvious statement. Before mankind there was no "value". We invented it, and it evolved with us. At some point it even became self-referential ("I am valuable now because I become even more valuable later").

Interesting.. even us as "technologists" are much more interested in money.

Witness the number of posts here.

I think the original bitcoin post had about 3 responses. Wish I was paying attention that day!

Yet for the first time in history, the island is the entire world.

There was no gradual cross-border liberalization of markets

There was no mega-exchange merger that got approval from multiple continental government regulators

All there was being a new kind of asset that trades freely across the internet and is able to capture the pent up capital of the world, and the market decided.

I'm curious if the venture investors in Ripple (seed, Series A, b, etc) benefit at all from the uptick in XRP. I assume an equity investment did not take the form of coins when those deals were done. Hopefully for those VCs I'm wrong. Anyone have an idea?

We had three stories about Ripple appearing in front page in 3 days. What’s going on?

Just read the headline of this article and you'll realize why the current Ripple psychosis is newsworthy. What has happened the last week is historical and scary.

It's the signal the mania stage is nearing an end.

See: Yasumitsu Shigeta

They're playing musical chairs right before the implosion. Ripple might be worth a couple billion dollars as a dangerous speculation. PayPal, an actual, real, live, huge, global, payment & money transfer system, is worth $92 billion.

Some people say you can't place a value on something like Ripple. Sure you can, treat it as an actual business, measure its prospects over the next 3, 5, 10 years. What are those business prospects for the next few years? Not much, less than that of Square and Stripe.

Ripple is just this bubble's CMGI or Internet Capital Group. Bitcoin is this bubble's Cisco or AOL (if it's lucky). The junk ICOs are DrKoop.com or TheGlobe. There's nothing unique about what's going on, history is rhyming as it so often does. It's a likely indication the global liquidity asset bubble party - spurred on by so many central banks pumping crazy levels of liquidity into the global economy for a decade - is reaching toward a climax, again.

Can you explain the Yasumitsu Shigeta reference? I tried Googling but I don't get it.

From what I gather, the founder and chairman of Hikari Tsushin Inc. Once among the world's richest people, until Hikari Tsushin lost 99% of its stock value in 2000.

EDIT: found this[1]

[1]: https://www.theguardian.com/technology/2000/nov/25/internetn...

News articles => Increase in Price => News articles...

As someone holding ripple, I'm okay with this vicious cycle

Someone should start a hedge fund finding ICOs with really well-connected teams, such as Tron (Alibaba connections) to predict the next wave of stories => rise => stories => rise. I for one would put $$ into that hedge fund.

Just as long as they get the money out before the musical chairs stop.

People are obsessed with cheap shit, because they took one logical step and said "if this goes up $1, I make more than if Bitcoin goes up $1", but then they leaped over the next step ignoring it completely, which says that there are 100billion XRP, so the likelihood it will go up in price by $1 is rather low.

Granted, enough people bought into the flawed logical to see it happen a couple times over, not realizing that there's no reason for XRP's existence.

Could you please elaborate more on the point that there's no reason for XRP's existence?

Pump and dump. Lather, rinse, repeat.

Ripple is not Bitcoin competitor because Ripple is not a cryptocurrency.

This is no different from billionaires that hold massive equity stakes in their own companies, including Zuckerberg.

> Yet the fortunes of Mr. McCaleb and Mr. Larsen are not nearly as durable as those of other people on the Forbes list given that the value of virtual currencies fluctuates wildly. If Mr. Larsen wanted to access his wealth by selling Ripple tokens for dollars, it would likely drive down the value of Ripple tokens — and his riches.

People keep trying to apply a different higher standard to cryptocurrency in order to prove why it cant function as legacy asset classes.

Honestly, I think its because people dont know how the equity/currency/commodity markets work and are synthesizing standards while watching crypto billionaires get minted on the fly to justify their missed opportunities.

In Ripple’s case, the founders are probably more liquid than other equity billionaires. Ripple traded 7 billion usd today, Facebook only 2 billion.

And I dont even like Ripple, but right now I have to fight ignorance outside of the crypto arena.

The difference is very simple.

If you buy all ripple tokens in existence, they are useless. If you buy all facebook stocks in existence, you own facebook.

All ripple accounts require 20 xrp which cannot be moved so this is an impossibility to begin with

Xrp holders have some function in the network, I forgot

And you could name the price for anyone else that wanted xrp or to use the network

Although I would say Ripple’s XRP is not the settlement solution Id be looking for, I wouldnt say owning 99.999% of them makes it worthless

Owning all of a commodity doesnt make it worthless, even when that commodity is a unique collection of cryptographic signatures

if i have 20 ripple but can't spend them - how is that different from having 0 ripple?

You gave someone else $40 for free.

right, i gave them to "open my account", now i have 20XRP that i can't spend - how is it different from having 0XRP that i can't spend?

Thats not the point, the xrp being cannot be bought by one entity because there are already millions of addresses and this has a helpful effect on the network and was designed for this exact scenario

Read up on it yourself, I think its some form of staking or validating

Im not the evangelist of Ripple just because Im not succumbing to widespread ignorance and flawed analogies

last XRP can't be bought because they can't be spent. how is 20XRP that you can't spend different from 0XRP that you can't spend?

Right its not, what does that have to do with my grandparent post

My point was that the ripple network wouldnt be useless for the entity that bought 99.99% because of the network structure, I’m not sure what your point is

Another user of the network would need to buy xrp from the majority holder, there’s nothing controversial about that. Diamonds function the same way for DeBeers except they have a much lower standard of utility until the owning entity created a new use for them.

> what does that have to do with my grandparent post

your gp was response to my question, so i thought you thought you somehow addressed it

> ripple network wouldnt be useless for the entity that bought 99.99% because of the network structure

what is "network structure"? it can't be the residual 20XRP on everybody's accounts because those are equal to 0XRP as you've just agreed to.

the point that somebody can still buy XRP from the majority holder^W^W the effective sole owner of all usable XRP is sort of irrelevant, because you can make the same point about any other commodity/currency.

I think we're agreeing

I dont know the answer to the network structure, I think it is some kind of staking/validating thing, thats the basis of my thesis and I had tangentially read it somewhere before deciding to pass on XRP for other reasons. feel free to tell me if you do some independent research on that assumption

Yes it is the same standard of any commodity and currency, which is why its not irrelevant. Same info, different conclusions, odd.

i don't have any useful answers for you. i passed on XRP solely because it has nothing to do with cryptocurrencies and it bothers me that they try to pretend to be one and it seems like people are buying it (pun intended).

Looked into both Ripple (XRP) and Stellar (XLM) and invested more into Stellar because of...

- the much better scaling than traditional coins (semi-central structure)

- the track record of the founder Jed

- the fuller feature set including the creation of new tokens like ETH but easier

- the recent announcement like IBMs partnering and stress tests, Kin moving to Stellar, Signal's founder creating his coin on Stellar

- Stellar's lower market cap, so there's still room above

I think Ripple is also good but has a different focus and since the original founder of Ripple left to Stellar, I am a bit more into Stellar.

I looked into the top15 currencies by market cap. I decided to stay away from cardano/tron/iota/bitcoin cash/dash/neo. Stellar is my favourite so far other than bitcoin even though I don't 100% understand the consensus algorithm yet.

Why do you lump bitcoin cash with the other pointless coins? It is better at being bitcoin than bitcoin except for speculative purposes (so far).

Because I don't find anything that does better than litecoin. Also this video https://www.youtube.com/watch?v=JarEszFY1WY shows the fundamentally different viewpoints between bitcoin and bitcoin cash. As someone mentions in the video what bitcoin cash is trying to do is implement business logic inside the protocol which is a layer violation.

Litecoin is basically following Bitcoin's approach to scaling which will leave it congested if it gets popular enough. Litecoin already has much higher fees than Bitcoin Cash. Litecoin's development has basically been nonexistent since it's invention and has only been copying Bitcoin ever since. Bitcoin Cash is also quickly gaining merchant adoption with for example BitPay, something Litecoin has failed to do in many years. The network effect is a powerful thing.

That Bitcoin Cash would implement "business logic" is just wrong. It simply removes the artificial blocksize limit and does not try to prevent users from utilizing 0-conf if they so choose. From that point it is Bitcoin which is forcing out valid use cases (low value transactions, opt in 0-conf).

Bitcoin cash's approach to scaling is just not sustainable and leads to centralization. You cant just increase the block size each time the mempool fills. In a couple of years no one would be capable to run a full node on consumer hardware. Also you open up all kinds of different ways for the network to be attacked. With a 1MB block size an attack block will take 40 seconds to validate with a 2MB size it will take 14 minutes. The correct solution to scaling is a Layer 2 protocol.

Bitcoin Cash's mantra is that they want people to treat 0-confirmation transactions as safe which is absolutely the opposite of what the whole protocol is about. Check this infographic that was tweeted a few hours ago https://twitter.com/Bitcoin/status/949019786704547842

This black and white thinking is just not practical. "Since very large increases will disallow nodes on consumer hardware we will block any increase" is just poor engineering.

The approach of Bitcoin Cash is to allow the increase when possible. 8MB is for example perfectly doable today on consumer hardware. Investigations are ongoing for how large the blocks can become and improvmenets are being made on for example propagation time and allowing faster startup of nodes.

For example 1GB have been propagated and validated in a timely manner by consumer hardware existing today. (Not saying we should bump it up right now, but the capabilities are here).

> With a 1MB block size an attack block will take 40 seconds to validate with a 2MB size it will take 14 minutes.

That's just wrong.

Edit: Because Bitcoin Cash eliminates the quadratic hashing problem.

> Bitcoin Cash's mantra is that they want people to treat 0-confirmation transactions as safe which is absolutely the opposite of what the whole protocol is about.

No it's not. There are different degrees of safe which Bitcoin totally fails to acknowledge. Buying a coffee with 0-conf and a basic double spend heuristic is perfectly fine and has been done on Bitcoin until full blocks (and RBF) killed it, for example by shapeshift. xmr.to which converts Monero to Bitcoin is also accepting 0-conf for smaller amounts.

Here again the extremist black and white thinking is bad.

> The correct solution to scaling is a Layer 2 protocol.

No, the correct solution combines on-chain and off-chain scaling.

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