My interest in ripple

[Kevin Smith]

Since I have been posting some messages recently, I figured I should
share with the group a quick view of my own interest in ripple.

First off, from a theoretical/conceptual standpoint, ripple is pure
genius. It allowed me to really understand money, and it is fun to dream
about how great it would be if it were widely used throughout the world.

But back to reality. I think ripple might work great in a rural
community in a developing country. People already have trust
relationships based on in-person interactions, and they could always
enforce debt payment with physical means. It might be easier to persuade
a hundred people to use ripplepay, in face-to-face conversations, than
to try to build an online community.

In places like this, hard currency is often rare, and even local
currency may be hard to come by, especially when the world is in a
financial crisis. So some form of local currency can be very helpful,
but printing actual (counterfeit-proof) bills or minting actual coins
would be way too difficult and expensive. Local currency can be very
effective in getting otherwise dormant resources (land, people) put to
good use.

The two biggest challenges I can see would be having good internet
connectivity, and getting rural folks who don't have much education and
who are still very rooted in traditions and habits to accept this
newfangled "money".

For the first problem, I would probably set up a system where
transactions could be phoned in, talking to a live operator who actually
knows the caller (remember, this is a small town), so most transactions
would not require a computer or internet.

Kevin

[Mark Beihoffer]

Hi, Kevin,

Thanks for sharing your ideas with the group. I, too, have been brooding over similar issues.

On Thu, Dec 10, 2009 at 10:44 AM, Kevin Smith <kev...@qualitycode.com> wrote:

Since I have been posting some messages recently, I figured I should
share with the group a quick view of my own interest in ripple.

First off, from a theoretical/conceptual standpoint, ripple is pure
genius. It allowed me to really understand money, and it is fun to dream
about how great it would be if it were widely used throughout the world.

I think you may be underestimating the progress the concept has made, if not in practice, in mindshare.
 

But back to reality. I think ripple might work great in a rural
community in a developing country. People already have trust
relationships based on in-person interactions, and they could always
enforce debt payment with physical means. It might be easier to persuade
a hundred people to use ripplepay, in face-to-face conversations, than
to try to build an online community.

I think the two go hand-in-hand nowadays; it is hard to hide your identity online for long these days (you don't need a subpoena to track someone if you are a private investigator, and security on 99.89% of physical workstations, servers, and mobile devices is absolute crap.

 

In places like this, hard currency is often rare, and even local
currency may be hard to come by, especially when the world is in a
financial crisis. So some form of local currency can be very helpful,
but printing actual (counterfeit-proof) bills or minting actual coins
would be way too difficult and expensive. Local currency can be very
effective in getting otherwise dormant resources (land, people) put to
good use.

I think everything from b-buck cards in the Seward neighborhood here in Minneapolis, to the Lunabux cards used by Lunalux Letterpress Printing, to the hobo nickels we're hammering out down at the Chicago Center for the Fire Ærts are starting to take hold in the world, at least locally. And I know a lot of people that would currently like to sell off their virtual holdings in games like MafiaWars and WoW and even the gold standard, Ultima Online, so they can diversify their holdings into fractallized currencies of localized valuta.

The problems come from having so many fractured currencies and fractured economic incentives, it creates barriers to trade when there are no centralized (or de-centralized) micro-currency exchanges to leverage the new school of SuperFreakOnomics plancheti into actual tangible objects.
 

The two biggest challenges I can see would be having good internet
connectivity, and getting rural folks who don't have much education and
who are still very rooted in traditions and habits to accept this
newfangled "money".

All it would take would be a few high-profile exchanges (think Default Credit Swaps) between various Shadow Entities (think unincorporated, but highly organized eco-systems) for the so-called "rural folks" to see how stuff like this might not be a bad idea for them. Security theatre seems to come into play here, as does method acting and the game theory behind Duplomacy/Civilation.
 

For the first problem, I would probably set up a system where
transactions could be phoned in, talking to a live operator who actually
knows the caller (remember, this is a small town), so most transactions
would not require a computer or internet.

Right. And overloading the central op would be a trade violation that could lead to sanctions (information embargos, boycotts, union-busting, etc), so that would be a good set of checks and balances to make sure there weren't any heavy-hitting lobbyists waiting with tyre irons in Yæ øldde Paπking Lø††é.

- Mark Beihoffer
a.k.a. Jack Merlot
a.k.a. dragonfly_blue

[Kevin Smith]

Thanks for the reply and for sharing your perspectives.

On Thu, 2009-12-10 at 12:06 -0600, Mark Beihoffer wrote:

On Thu, Dec 10, 2009 at 10:44 AM, Kevin Smith <kev...@qualitycode.com> wrote:

 

The two biggest challenges I can see would be having good internet
connectivity, and getting rural folks who don't have much education and
who are still very rooted in traditions and habits to accept this
newfangled "money".

All it would take would be a few high-profile exchanges (think Default Credit Swaps) between various Shadow Entities (think unincorporated, but highly organized eco-systems) for the so-called "rural folks" to see how stuff like this might not be a bad idea for them. Security theatre seems to come into play here, as does method acting and the game theory behind Duplomacy/Civilation.

I'm not sure we're talking about the same kind of community. In the kind of rural area I am thinking of, they still use ox-carts, and many/most homes lack electricity. Some/many of the people seriously believe that after a woman (and it is almost always a woman) irons clothing, she can't do any more housework of any kind for the rest of the day because it will cause physical injury. It is commonly believed that drinking something cold when you are hot from working outside can cause serious injury. These are not worldly, sophisticated folks who just need to be shown the benefits of a new thing in order to start using it. There are some serious obstacles to adoption. However, they are very smart and resourceful people, so hopefully if introduced properly, and by gaining the trust of some influential community members, it could become accepted (perhaps over the course of a few years).

Kevin

[Robert O'Brien]

Kevin,

You might be interested in FrontlineSMS: Credit http://credit.frontlinesms.com/

In the "rural" areas you're describing computers with Internet
Connectivity are very rare. GSM Mobile phones with SMS are ubiquitous.

M-PESA is a very powerful example of extending banking services
(strictly speaking Money Transfer/Transmitter service) to the
un-banked.

FrontlineSMS:Credit is aiming to achive the same thing at a community
or Micro Finance Institution level for credit using a PC with a
tethered GSM phone.

It would be interesting to know if a Ripple like system could work
across a SMS Transport.

Robert.

2009/12/11 Kevin Smith <kev...@qualitycode.com>:

[Jason Kolb]

I think the concept of an exchange is a critical one to make this idea work. An exchange could accept the default risk in exchange for a transaction fee. As ling as two parties are on the same exchange they can do business together. It's the way our central banking system works today but on a much more decentralized level. 

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