Ripple - open source peer-to-peer payment system
ripple.com
ripple.com
If I understand it correctly: By paying a gateway, you get "ripples" in the form of an IOU (The gateway owes you). This IOU can be exchanged at any other gateway back to money. Meanwhile, your money is inside the system and you can send it to other people in the system.
There's no inherent value to ripples, there's no money being created or lost. It's just a means to transfer money around.
Am I right that gateways need to be trusted though? Can they accept e.g. $1000 dollar, give out gateway IOU's, and never return the money to anyone?
While bitcoins have "innate" value in the form of exchange value (not so innate as it is actually fungible), the ripple is a new form of this without any exchanges that I know of.
I would not take a ripple as payment for services, without a corresponding contract that identified the sender as lendee, and terms for payment where they would accept the ripples back over time in exchange for the contract value.
In other words, we start by agreeing on the value of the ripples (you have plenty, and you send me some in lieu of full payment), and if I trade them away before you can repay me, you could think of it as your debt having been assumed by a third party. I would keep them until you paid me back instead, so I could send them back as a record of the debt being discharged.
Why one would want to do any of this instead of just writing a regular IOU is an exercise for the reader. I guess it's something like a 'mixing service.' They could have trade value one day.