really simple question about ripple pay

[Miles Thompson]

They say there is no stupid question. I am about to test that out in practice. Just something I want to get clear, so forgive me if its all explained somewhere more clearly.

Here goes..

in the ripple protocol, if i want to pay Cathy through Bob then OK after I agree with Cathy, Bob actually has to collect real money (credit/whatever) from me and pay to Cathy (though not necessarily in that order)... right?

That is, if he was using a conventional checking account Bob would have to actually deposit my cheque and write a new one to Cathy.. ?

If so then I guess that's OK just wanted to clarify it.

The obvious concern is, theoretical underpinnings of our monetary system aside, whats in it for Bob? Especially so if the chain is long, all these intermediate people who know neither me, nor the recipient get saddled with a bunch of creditors to collect from, debtors to collect from and a whole bunch of paper work to do, every time a transaction passes through them. That could be a real problem couldn't it, in a practical sense?

Not necessarily a show stopper, but - if  I understand it correctly, probably one of the biggest limitations to uptake of ripple pay in a real, practical, every day sense. Would you say?

Now of course, if it was "all automatic" for the intermediaries, well, different story. (That is, if once a transaction was made payments along the line took place automatically, provided folks had already taken the time to establish the network/state 'how much they trust persons x,y,z to owe them money')  All this talk of instantaneous transactions confuses me I can't see how it can be instantaneous without instantaneous settlement along the way and i've certainly never seen any online banking system or other that would come close to supporting that. A customizable/alternative/computerized currencies or perhaps game currency would be more practical though - i guess that's (one reason) we are talking so much about alt currencies on this list?

Please let me know if I am right, wrong or way off base. Thanks

miles

[Thomas Hartman]

I think you're right.

> The obvious concern is, theoretical underpinnings of our monetary system
> aside, whats in it for Bob?

That's the problem, in a nutshell.

As long as there's a halfway-functioning government-run monetary
system, the current offering for ripple isn't too attractive.

In weimar germany-like conditions, or temporary instability like what
happpened in argentina when the currency devalued in the last decade,
there might be a niche.

Or if ripplepay offered some other kind of advantage, such as being
integrated in a slick commercial barter system. But then of course
it's not so much ripple that's the advantage, but rather barter, and
ripple is just an interesting accounting system. The advantage here
though, is that it's an accounting system that would continue
functioning slickly if the underlying government-run monetary system
imploded, and that *is* an advantage in my book.

thomas.

[Daniel Syddall]

There is one advantage in the present system of being able to charge
interest until the debt is repaid. Also there is the long-term
advantage that once many have joined Ripple, there is the potential
for much reduced interest rates for borrowers, due to the market
utilisation of more information about credit-worthiness and the
automatic cancellation of debt between two parties when two
transaction paths cross in opposite directions.

Unfortunately, Ripple seems to still require further development for
these advantages to outweigh the costs of adaptation to a new payment
system for most people.

Like Thomas said, the possibility of Ripple being able to provide
credit even in when banks are refusing to loan is a big advantage of
Ripple. But it remains to be seen just how bad this
recession/depression will be before the world economy picks up again.
If it's really bad, there may be an opportunity for Ripple to seize
the moment and provide a solution.


2009/1/4 Thomas Hartman <thomash...@googlemail.com>:

[Thomas Hartman]

> If it's really bad, there may be an opportunity for Ripple to seize
> the moment and provide a solution.

Yep, this is true, in the sense that any possibility is "true". But I
don't feel like waiting.

So I am more interested in strategies where ripple is useful today, so
that if at some future point there's already a safety net in place.

It's equally possible that if there's an economic calamity there will
be martial law, censorship of the internet, concentration camps for
dissidents, etc, etc etc.

Speculating on calamity in this way is just too depressing for me to
give it much thought.

thomas.

[Daniel Syddall]

2009/1/4 Thomas Hartman <thomash...@googlemail.com>:

>
>> If it's really bad, there may be an opportunity for Ripple to seize
>> the moment and provide a solution.
>
> Yep, this is true, in the sense that any possibility is "true". But I
> don't feel like waiting.
>
> So I am more interested in strategies where ripple is useful today, so
> that if at some future point there's already a safety net in place.

Of course, but my point was rather that the cost-saving possibilities
of the adoption of a Ripple-like system will at some point become so
noticeable as to make its adoption inevitable, as long as we aren't
under authoritarian control, with capitalism continuously seeking out
ways to make a profit between the margins and those margins being
increasingly squeezed.

> Speculating on calamity in this way is just too depressing for me to
> give it much thought.

Some of our greatest inventions have come from times of despair (e.g.
computers), as noted by Thomas Horner-Dixon in his book "The Upside of
Down: Catastrophe, Creativity and the Renewal of Civilisation"
(http://www.theupsideofdown.com/video.html). But he notes that this
only occurs when solutions have been prepared in advance. All the more
reason to speculate and seek out the jewel in the dirt that has been
thrown towards us.

[els]

"All this talk of instantaneous transactions confuses me I can't see
how it can be instantaneous without instantaneous settlement along the
way
and i've certainly never seen any online banking system or other that
would come close to supporting that."

In order for a market transaction to result in instantaneous
settlement, corresponding debits and credits must be self-accrued
prior to a transaction event - think of independently determined
revenue targets and expense budgets, for example. When a transaction
is completed, the credit originator cancels part of its unused expense
budget, and the credit recipient cancels part of its unmet revenue
target.

If that is not instantaneous settlement, I don't know what is.


The scenario that I just described is a simplification of "ocaup", one
of the accounting models that Prowl would support. The catch is that
the service or goods provider must think of itself as a trustee, i.e.,
an owner has a responsibility to maintain and use personal property
for the good of the community (without being coerced into doing it a
particular way). When a market participant benefits from the
specialization of an organization or business, the entity is simply
satisfying its self-determined obligation to the market.

But since resources are finite, the goods or service provider also has
the responsibility to be selective on who benefits from its products.
And that's why I'm trying to help develop a system that is
transparent, so that market participants would be better informed on
what activities they should support and not support. People should be
aware of how their actions cause certain economic activities to
persist or desist. If you don't believe in firearms, then don't accept
currency from an arms manufacturer. If you don't believe in big
government, don't sell stuff to big government employees. Simple
noncooperation.

If and when a diversity of currency brands emerge to represent
distinct market entities, then we'll have a healthy market ecology
where inefficient and/or unsustainable entities are weeded out through
the cumulative non-cooperation of market participants. It would not,
and does not, matter how much currency an entity could issue or have
accumulated if its currency brand is rejected by an informed
marketplace.

(I hope the group will be able to distinguish my strong preference for
trusteeship economics from a simultaneous desire to work on a neutral
currency/payment platform.)

Edgar

[David Watson]

It's a very subtle system that Ryan has built and its hard without
really studying it and imagining multiple examples the potential use
it could have. There's really no currency/trading model I've been
able to think of that couldn't be modeled inside Ripple. This
includes pure mutual credit schemes as well as reserve based
currencies. You could have currencies with fixed supplies, limited
supplies or elastic supplies depending on how you connected your
nodes. The main benefit I think, as Thomas pointed out, is the idea
of a decentralized currency, but I don't think ubiquitous centralized
currency is the main problem for something like Ripple taking off.

I believe the main problems are the choice of a currency, what the
legal ramifications are of the person who acquires debt, and-in a
decentralized system such as Ripple-what is an effective means of
dynamically stabilizing the global pricing system (to neutralize free-
riders and rent seekers). If these three problems could be
effectively solved, I think Ripple would explode virally.

Centralized price stabilization strategies don't work. There's
promise though in some of the advances currently being made in game
theory. In fact I was just checking out this paper earlier:

The Emergence of a Price System from Decentralized Bilateral
Exchange
http://www-unix.oit.umass.edu/~gintis/papers_index.html

Gintis actually managed to get a dynamically stabilized pricing
equilibrium from his computer model, but it was based on the concept
of 'private prices' which leaves open the question of how this could
actually be manifested in a real world trading system. In other
words, money was blind (as it would be in Ripple) and everyone had
there own system of pricing, and only improved there pricing by
copying the pricing of successful actors after successive mutations.
So there was no way for groups to become socially aware of prices and
cause a positive feedback bubble scenario. Also, it was ultra simple
barter and didn't include anything complex like higher order capital
goods, but interesting work nonetheless, and very Ripple-esque.

[els]

"... what the legal ramifications are of the person who acquires debt"


This concern could be addressed by viewing Ripple as an autosettlement
agent.

Instead of thinking of credit limits as something that I am prepared
to have someone owe me, what if I think of those limits as something
that I already owe him or her? Then a Ripple payment chain would
result in corresponding debit and credit cancellations, instead of new
debt between parties.

That's all I meant by self-determined obligations above, and that it's
possible to view revenue targets as representing products owed to the
market in general. This view does not contradict Ripple's design
intent as a neutral payment platform for multidomain trades.

On Jan 7, 9:52 am, David Watson <WizardWat...@gmail.com> wrote:
> It's a very subtle system that Ryan has built and its hard without
> really studying it and imagining multiple examples the potential use
> it could have.  There's really no currency/trading model I've been
> able to think of that couldn't be modeled inside Ripple.  This
> includes pure mutual credit schemes as well as reserve based
> currencies.  You could have currencies with fixed supplies, limited
> supplies or elastic supplies depending on how you connected your
> nodes.  The main benefit I think, as Thomas pointed out, is the idea
> of a decentralized currency, but I don't think ubiquitous centralized
> currency is the main problem for something like Ripple taking off.
>
> I believe the main problems are the choice of a currency, what the
> legal ramifications are of the person who acquires debt, and-in a
> decentralized system such as Ripple-what is an effective means of
> dynamically stabilizing the global pricing system (to neutralize free-
> riders and rent seekers).  If these three problems could be
> effectively solved, I think Ripple would explode virally.
>
> Centralized price stabilization strategies don't work.  There's
> promise though in some of the advances currently being made in game
> theory.  In fact I was just checking out this paper earlier:
>
> The Emergence of a Price System from Decentralized Bilateral

> Exchangehttp://www-unix.oit.umass.edu/~gintis/papers_index.html

> > miles- Hide quoted text -
>
> - Show quoted text -

[Thomas Hartman]

If you want to have rippe with price controls, this strikes me as an
enforcement problem.

I recently posted some thoughts about enforcement against fraud prevention

http://groups.google.com/group/rippleusers/browse_thread/thread/e87e9f0a5fe994f3

Maybe relevant?

In any case though, I think it will be difficult to get social buy-in
for price controls. The desire for a free market comes from a very
deep place.

thomas.

[David Watson]

Ripple has to be more than just a promise though no matter who
initiates. I too see 'gifting'-which can be backwards interpreted as,
"something that I already owe him or her", as you say-as an excellent
way to prime the system. Stability and confidence in the system
though are necessary so that that gifting doesn't fizzle out, and
manifest itself as the debt of a free-rider.

[Thomas Hartman]

"... what the legal ramifications are of the person who acquires debt"

this demands on the user agreement that a user checks off on when
signing up, eg, for the ripple-using webapp or service, doesn't it?

thomas.

[David Watson]

I'm not talking about price 'controls', but just the existence of some
mechanism in a distributed system that regulates inflation/deflation
and severely limits actors ability to coordinate in the creation of
positive feedback loops based on price manipulation.

Jim Cramer knows all about this sort of thing. I saw an interview
that I really couldn't believe at first because he was talking very
explicitly how to manipulate stock prices and skim off the top and
play on peoples fears. The video used to link from here:

http://www.stockwire.com/content/view/238/87/

but it looks like someone removed it. Here's a transcript from other
interviews:

http://www.commondreams.org/views07/0321-30.htm

I don't want to 'control' prices. I want there to be some method
whereby attempts to rig prices become unprofitable.

On Jan 7, 12:50 pm, "Thomas Hartman" <thomashartm...@googlemail.com>
wrote:

> If you want to have rippe with price controls, this strikes me as an
> enforcement problem.
>
> I recently posted some thoughts about enforcement against fraud prevention
>

> http://groups.google.com/group/rippleusers/browse_thread/thread/e87e9...

>
> Maybe relevant?
>
> In any case though, I think it will be difficult to get social buy-in
> for price controls. The desire for a free market comes from a very
> deep place.
>
> thomas.
>

[Thomas Hartman]

Well, how about the bounty for regulators idea then?

When people use the system, they commit not to engage in certain types
of behavior? If they are caught out, they get fined.

Regulator's job is to catch them.

Workable, you think?

[Thomas Hartman]

And, to repeat the concept from the initial post, regulator bounties
are funded from transaction fees collected by ripple server
administrator.

[David Watson]

Anyway, I've mostly hijacked his thread but more to the OP's point,
"What's in it for Bob?" is, in my opinion, his ability to act as a
regulator between his two peers Miles, and Cathy.

My question, and what got me thinking about price controls, is if Bob
is some node like all other nodes, what is his strategy for promoting
long term stability of the system assuming debts are secured legally?
How does the act of lowering/raising interest rates, lowering/raising
credit limits between peers, and gifting correspond to the real world
market he actually exists in.

It's all abstract what I'm trying to ask, but the main point is that
to me, its more than just a matter of making lots of connections and
spending and loaning. There's something more deliberate about it that
I feel like everyone is missing. And I don't just mean Ripple
Groupies, I mean everyone who is studying the political economy. It's
all connected.

On Jan 3, 11:52 pm, "Miles Thompson" <utu...@gmail.com> wrote:

[els]

Gifting does not have to involved if Ripple is modeled as an
autosettlement agent. If someone owes me money, he could publish that
record on the Ripple system as an increase to what a person already
owes him (which has to be co-verified by correspionding servers.)
There is still an expectation of direct reciprocity, and if Ripple
cannot find an autosettlement payment chain, the creditor could and
should still collect what is owed.

It is just a matter of perspective - if Ripple causes me to have to
manually settle numerous credit-debit obligations that it has incurred
for me, it seems like a difficult system to use, and I don't think I
would want to use a system that causes extra payment work for me.
I.e., there is no benefit to Bob.

If, on the other hand, it automatically settles obligations for me,
yeah, I could see paying for such a service, and I think Bob would
agree. I think this was the idea behind the Shared Transaction
Repository - a cloud of business outstanding records that roaming
settlement agents could compete to close for a fee (or cause a
transfer of obligations).

> > > - Show quoted text -- Hide quoted text -

[els]

Yes, this aspect is what I meant,in another thread, of requiring pre-
authorization of some sort for the system to transfer an existing debt
(in case of an STR agent) or cause me to incur new debt.


On Jan 7, 12:03 pm, "Thomas Hartman" <thomashartm...@googlemail.com>

wrote:
> "... what the legal ramifications are of the person who acquires debt"
>

> >> - Show quoted text -- Hide quoted text -

[David Watson]

I'm not clear on what your saying here. Is there another thread where
you elaborate on this?

[els]

Sorry for the confusion. I am referring to the prowl announcement
thread, but I did not elaborate on the STR agent concept there, it was
just briefly mentioned.

Also, my own ideas if implemented in Ripple does not have to involve
the concept of gifting. All I'm saying is that if Bob declares that he
owes Cathy and Alice declares that she owes Bob, then Ripple could
auto-settle those specific debts in a payment chain in case Cathy
bought something from Alice. In that case, debts are automatically
cancelled, and Bob is spared having to manually settle debts through
Ripple service.

If Ripple cannot auto-settle, the debt remains outstanding - it is not
a gift, there is still an expectation to collect.

[Daniel Syddall]

In Ripple, if:

A owes B $10
B owes C $10
C owes A $10,

these debts will not be automatically settled until the respective
credit limits are dropped below $10. Does anyone else think it would
be useful to have these debts settle automatically regardless of the
credit limits?

2009/1/7 els <sios...@hotmail.com>:

[Thomas Hartman]

I'll add a few more zeros to make the scenario more stressful

> A owes B $10000
> B owes C $10000
> C owes A $10000

Does circular debt cancellation belong in ripple?

I think maybe not, because the debt might be dated. If someone owes
you 10,000 in a week, and this cancels in a circular way a debt you
have to someone else in a year, you might rather have the cash in hand
so you can use it for other purposes, rather than have it
automatically cancel out a debt you have 52 weeks to pay off.

So for me, this issue ties in to how debt is dated.

Ripple doesn't really take debted into account, though this has been discussed.

But, given that there is no provision for this at present I would
argue that, no, you don't want automatic cancellation of circular
debt, but rather give the users control.

Thomas.

[Thomas Hartman]

>Ripple doesn't really take debted...

i meant:

Ripple doesn't really take dated debt...

[Daniel Syddall]

>> I think maybe not, because the debt might be dated. If someone owes
>> you 10,000 in a week, and this cancels in a circular way a debt you
>> have to someone else in a year, you might rather have the cash in hand
>> so you can use it for other purposes, rather than have it
>> automatically cancel out a debt you have 52 weeks to pay off.
>>

I guess. Perhaps there could be an option whereby you can set a
maximum credit limit and an auto-settlement limit separately.

[Cha...@thewybles.com]

Makes sense. To my understanding, you just described ripple in a nutshell.


Sent via BlackBerry from T-Mobile

-----Original Message-----
From: els <sios...@hotmail.com>

Date: Wed, 7 Jan 2009 14:02:37
To: Ripple users<rippl...@googlegroups.com>
Subject: Re: ripple as an autosettlement agent

[cjen...@googlemail.com]

Thomas

The issue about dating of debt is a key one. It ties in with the
concept of "unitisation" of productive assets - within a suitable
legal framework - of shares or "Units" redeemable in production or
use value of the asset.

eg Units redeemable in land rental value or energy value in
particular.

I had an "Epiphany" a couple of months ago when it struck me that an
undated Debt and a redeemable Unit are to all intents and purposes the
same thing. If you take out the discontinuity of the date, you get a
continuum of what I call "Open" capital.

If you think about it, there is an analogy between this fact and the
fact that conventional notes and coin are undated credits (and also
interest-free and entirely unbacked by anything more than the
government's credit) - whereas the rest of the credits = Money that is
in existence are both dated and interest-bearing Bank created credit
(except overdrafts - which are undated, but "callable"/repayable at
the Bank's option, not the customer's).

I think that you are right that Ripple settlements should not be
automatic - for the reasons you give -and should be under the user's
control.

I think the system should also calculate (maybe it does already?) an
overall "Balance" for each user.

eg A is +10 with B; -15 with C; +25 with D and - 30 with E.

Then A's system Balance is -10.

Let's add a framework of trust I call a Guarantee Society.

A may then be allocated by a Service-Provider-formerly-known-as-a-
Bank a "Guarantee Limit" (it's the same thing as a Credit limit) of
(say) 50

Both positive AND negative system Balances are charged an amount for
the use of the guarantee (both benefit from it), and this goes to a
Custodian who holds it on behalf of the GS members as a "Default
Fund". Any excess beyond an agreed default liquidity level may simply
be distributed to GS members (equally?) as a sort of Community
Dividend.

So members who do not use the system, but still back it in a default
(beyond the amount in the Pool) are remunerated. This is analogous to
the way that Lloyds of London operates as a general insurance
mechanism where "Names" put their wealth at risk, and receive an
income from insurance premiums they have backed..

Also a charge is made to cover the service provider's costs and they
may compete among themselves on the credit clearing platform to
provide the most efficient service. To align interests, they would
participate in any defaults (ie out of their profit margin).

The result is a decentralised and disintermediated banking system.
Banks would love it, because they are no longer risking capital by
creating credit based upon it. Which these days is just as well, as
Bank Capital is an endangered species....

Best Regards

Chris



On Jan 8, 12:34 am, "Thomas Hartman" <thomashartm...@googlemail.com>
wrote:

> I'll add a few more zeros to make the scenario more stressful
>
> > A owes B $10000
> > B owes C $10000
> > C owes A $10000
>
> Does circular debt cancellation belong in ripple?
>
> I think maybe not, because the debt might be dated. If someone owes
> you 10,000 in a week, and this cancels in a circular way a debt you
> have to someone else in a year, you might rather have the cash in hand
> so you can use it for other purposes, rather than have it
> automatically cancel out a debt you have 52 weeks to pay off.
>
> So for me, this issue ties in to how debt is dated.
>
> Ripple doesn't really take debted into account, though this has been discussed.
>
> But, given that there is no provision for this at present I would
> argue that, no, you don't want automatic cancellation of circular
> debt, but rather give the users control.
>
> Thomas.
>

> On Wed, Jan 7, 2009 at 4:36 PM, Daniel Syddall <danielsydd...@gmail.com> wrote:
>
> > In Ripple, if:
>
> > A owes B $10
> > B owes C $10
> > C owes A $10,
>
> > these debts will not be automatically settled until the respective
> > credit limits are dropped below $10. Does anyone else think it would
> > be useful to have these debts settle automatically regardless of the
> > credit limits?
>

> > 2009/1/7 els <sioso...@hotmail.com>:

> ...
>
> read more »

[Thomas Hartman]

>Both positive AND negative system Balances are charged an amount for
the use of the guarantee

Going concrete, how much do you think they should be charged?

> eg A is +10 with B; -15 with C; +25 with D and - 30 with E.
> Then A's system Balance is -10.

Say A uses the system for a month, with an average balance of -100.
How much should he pay? How much would he be willing to pay? How much
does A pay, if anything, to the equivalent system we have today, for
comparison? (Bank fees, interest, etc.)

What should A pay if he has an average balance of +100 for a month?

Do you think this balance-based fee should be charged in addition to
transaction fees, or as an alternative to transaction fees?

Is there a business model for ccs/barter hubs here?

thomas.

[David Watson]

> I had an "Epiphany" a couple of months ago when it struck me that an
> undated Debt and a redeemable Unit are to all intents and purposes the
> same thing. If you take out the discontinuity of the date, you get a
> continuum of what I call "Open" capital.

I had a similar realization about the concept of "land rent
unitization" as you call it. Once you remove the 'date' issue, the
line between interest on capital, and capital rental gets blurred.

There are a lot of details about what you are describing that I would
like to discuss with you in the future, but I'm still stuck on some
graph theory issues. Not only are there cascading default issues,
which would exist in even a centralized system, but you have upper
limit problems on the ability of payments to flow through nodes.

As I've said before, not having a center is probably the biggest
problem, most other issues like currency type, legal framework,
technology, etc. are mostly solved. I feel that Ryan has solved the
mechanistic part of the problem, but the arrangement of nodes and how
it relates to who starts with equity, how do we transfer equity, etc.
is unsolved.

When I was in junior high a math teacher gave us The Königsberg Bridge
problem to try to solve. I spent days trying to solve it. This was
before the internet and before I knew it had anything to do with graph
theory so I couldn't just look it up. Turns out there is no solution,
but there was a reason that had to do with graph theory. But the
proof of why it isn't solvable tells you the arrangement of similar
problems that are solvable. I look at the decentralized money issue
in the same manner. It may not be solvable the way I'm looking at it,
but if I can find out why it isn't solvable than that may at least
give a clue as to a better way to look at the problem.

On Jan 10, 3:49 am, "cjensc...@googlemail.com"

> ...
>
> read more »

[Thomas Hartman]

> As I've said before, not having a center is probably the biggest
problem,

Could you give a pointer to where you've said this, or summarize the issue?

Ripply solutions to me aren't about "not having a center", whatever that means.

No financial system, even our current one dominated by the Fed, has a
*true* center in the sense that everything runs on faith, faith that
is gradually shifting back and forth between multiple currency
issuers. (Like current shift away from dollar, or then again is it
shift to dollar? Or shift away from all fiat to digital metal
currencies. Or shift of interest towards CCs and barter. Or... and it
goes on and on.)

For me, ripple is about just making these multiple centers more
explicit, and not turning it into a mind control cult "for the good of
the masses".

Why is there "in god we trust?" on the dollar? When you hire a plumber
to unstop your insinkerator you don't get an invoice that says "Joe's
Plumbers: Trusted By God" right?

The plumber provided you with a service, a currency issuer also
provides you with a service.

Ripple is about finding a way to get rid of the mumbo jumbo.

t

[David Watson]

> > As I've said before, not having a center is probably the biggest
>
> problem,
>
> Could you give a pointer to where you've said this, or summarize the issue?
>
> Ripply solutions to me aren't about "not having a center", whatever that means.

I'm saying that decentralizing the money-issuing authority creates a
new set of problems, that's all. Getting community currencies going
is more than just a matter of educating people, there are some real
unsolved problems.

> For me, ripple is about just making these multiple centers more
> explicit, and not turning it into a mind control cult "for the good of
> the masses".

And when you "make the multiple centers more explicit" by using
Ripple, you run into the numerous problem associated with "not having
a center".

Even if you add in reserve currencies (which in Ripple just means no
non-reserve nodes can hold an overall negative balance) and legal
enforcement of debt, there are still flow problems which make it hard
for large payment transfers to propagate over several nodes, and the
more you artificially open up the credit limits to alleviate this the
more susceptible you become to cascading defaults.

On Jan 11, 5:55 am, "Thomas Hartman" <thomashartm...@googlemail.com>
wrote:

> > As I've said before, not having a center is probably the biggest
>
> problem,
>
> Could you give a pointer to where you've said this, or summarize the issue?
>
> Ripply solutions to me aren't about "not having a center", whatever that means.
>
> No financial system, even our current one dominated by the Fed, has a
> *true* center in the sense that everything runs on faith, faith that
> is gradually shifting back and forth between multiple currency
> issuers. (Like current shift away from dollar, or then again is it
> shift to dollar? Or shift away from all fiat to digital metal
> currencies. Or shift of interest towards CCs and barter. Or... and it
> goes on and on.)
>
> For me, ripple is about just making these multiple centers more
> explicit, and not turning it into a mind control cult "for the good of
> the masses".
>
> Why is there "in god we trust?" on the dollar? When you hire a plumber
> to unstop your insinkerator you don't get an invoice that says "Joe's
> Plumbers: Trusted By God" right?
>
> The plumber provided you with a service, a currency issuer also
> provides you with a service.
>
> Ripple is about finding a way to get rid of the mumbo jumbo.
>
> t
>

> ...
>
> read more »

[cjen...@googlemail.com]

Thomas

Firstly, I think that the agreed costs of the service providers (also
members within the GS partnership framework) would be shared among the
system users equally on a subscription basis.

Secondly, both positive and negative balances will be charged, since
both benefit from the mutual guarantee. This halves the cost, and is
not inconsistent with the way that (say) Visa also levies charges on
sellers, albeit not interest-based.

As to the level, it's a case of "suck it and see" I think: maybe 0.5%
per month for both seller and buyer. Not forgetting also that
participants could also be asked to guarantee an initial amount eg
$100's worth

Part of the charge would go to the Service provider by way of a
"bonus" or "profit". Part of any defaults would come out of the
service provider's profits, which both gives them skin in the game,
but also reduces the incentive to set limits too high.

Once an adequate liquidity pool has built up the excess would be
distributed equally among the membership.

re cc's/ barter hubs, the way I see it is that the future lies in
creating a network of local WIR- style B2B exchanges within a
Guarantee Society framework. This then may be extended organically by
partnering with a local bank or credit union as a service provider and
allowing local customers (eg existing credit union customers) to
obtain local B2C credit interest-free (but not cost free) within the
framework.

The result is community credit clearing with optional settlement in
dollars or in "money's worth" of goods and services by reference to
the dollar

Best Regards

Chris


On Jan 10, 4:02 pm, "Thomas Hartman" <thomashartm...@googlemail.com>
wrote:

> >Both positive AND negative system Balances are charged an amount for
>
> the use of the guarantee
>
> Going concrete, how much do you think they should be charged?
>
> > eg A is +10 with B; -15 with C; +25 with D and - 30 with E.
> > Then A's system Balance is -10.
>
> Say A uses the system for a month, with an average balance of -100.
> How much should he pay? How much would he be willing to pay? How much
> does A pay, if anything, to the equivalent system we have today, for
> comparison? (Bank fees, interest, etc.)
>
> What should A pay if he has an average balance of +100 for a month?
>
> Do you think this balance-based fee should be charged in addition to
> transaction fees, or as an alternative to transaction fees?
>
> Is there a business model for ccs/barter hubs here?
>
> thomas.
>

> On Sat, Jan 10, 2009 at 5:49 AM, cjensc...@googlemail.com

> ...
>
> read more »

[Ryan Fugger]

On Sun, Jan 4, 2009 at 11:22 AM, Miles Thompson <utu...@gmail.com> wrote:
> in the ripple protocol, if i want to pay Cathy through Bob then OK after I
> agree with Cathy, Bob actually has to collect real money (credit/whatever)
> from me and pay to Cathy (though not necessarily in that order)... right?

The point of Ripple is to evolve to the point where Ripple credits are
"real money", and that settlement in Ripple is just as valid as
settlement at or around some central bank. In this example, Bob is a
"central bank" for you and Cathy.

Bob benefits directly by being able to collect modest transaction
fees, and potentially interest on credit extended. There are also the
theoretical community benefits of decentralized free banking.

Ryan

[Thomas Hartman]

> Bob benefits directly by being able to collect modest transaction
> fees, and potentially interest on credit extended.

It still seems to me that the benefits to bob are too small to justify
work/stress, unless he is really willing to treat being a ripple
intermediary as (at least) a part time job. This is especially true
during a bootstrapping period, when ripple hasn't gotten popular yet.

Bob has to train the people he's connected to in what using ripple
means, if someone else hasn't already trained them. He has to find a
place to spend the ripple credits, which maybe means some evangelism.
He has to maybe collect on bad debts. He has to deal with people who
want to cash out and stop using ripple, whatever the policy on that
winds up being.

So, ripple has to either

-- be a place which Bob and others can treat as a part time job in
exchange for a tangible economic benefit
-- or provide some smaller but tangible benefit that allows ripple to
spread virally with little effort/thought on the part of users. Casual
users need to be able to use it (and have a reason for using it)
without completely understanding it, just as most people use money
without understanding the intricacies of central banking.

> There are also the
> theoretical community benefits of decentralized free banking.

In a not-completely-melted-down economy, theoretical benefits don't
get you much traction, though. So I would concentrate on other
possibilities. Ideally the small-but-tangible number2 idea above.

t

[Ryan Fugger]

On Thu, Jan 15, 2009 at 9:38 PM, Thomas Hartman
<thomash...@googlemail.com> wrote:
>
>> Bob benefits directly by being able to collect modest transaction
>> fees, and potentially interest on credit extended.
>
> It still seems to me that the benefits to bob are too small to justify
> work/stress, unless he is really willing to treat being a ripple
> intermediary as (at least) a part time job. This is especially true
> during a bootstrapping period, when ripple hasn't gotten popular yet.

I agree. At the start, intermediaries basically have to be banks.

Ryan