Ripple: a standard protocol for routing payments through arbitrary currency networks
adel...@yahoo.com
http://docs.google.com/Presentation?id=d8v85k8_33fvfrzc59&invite=db554hp
It's not an attachment -- it's stored online at Google Docs. To open this document, just click the link above.
---
So here goes -- may it attract many an edit!
Thomas Hartman
Ryan, with input from me, did a major rework of the ripple homepage.
http://ripple.sourceforge.net/
I think the presentation is a lot better now, especially the motivating example.
Perhaps this can be of use to you for your slide presentation.
All the best,
thomas.
Chris Wagner
a good first example for someone new to the Ripple concept. I say that,
primarily, because it quickly brings banks into the mix. For me, the
glory of Ripple was that we have a potential to escape from the
centralized power of banks (and et al.). Seeing such an introduction, I
may not have grasped the value of Ripple so immediately, and I may have
went along thinking nothing of it. (Just my first thought.)
Chris
Thomas Hartman
The previous example had something about people on a camping trip that
owed each other money... but in reality, in this kind of situation the
campers would probably just nag each other for the money that's owed,
or if they're really advanced use billmonk or buxfer.
The example we presented shows how ripple could be of real benefit to
the existing payment infrastructure of the world today, which mainly
means banks.
In my opinion, nothing would empower community currencies, digital
metal currencies, and other forms of emerging currency more than for
banks to embrace an open payment platform.
Sometimes real change comes from working within the system...
Thomas.
Ryan Fugger
motivate a realistic adoption of Ripple on top of existing financial
providers, as well as demonstrate how people and businesses can get
involved as intermediaries in payments. Interpersonal Ripple without
banks is an ideal that a real-world Ripple network could very well
progress toward, but no one has been able to convincingly demonstrate
how interpersonal Ripple can be bootstrapped directly, or a
willingness to do so. Right now, convincing existing payment
intermediaries to connect to each other using Ripple seems like the
best way to build a network that people can extend into the social
trust network and have it actually be useful. I'm not giving up on
launching straight interpersonal Ripple, just prioritizing.
But it's a good point that an example to demonstrate straight
interpersonal Ripple, and some arguments motivating it as an ideal in
the system, would be nice. I'd also like to add an example of regular
businesses doing Ripple over existing accounts receivable. I'll add
some more examples...
Ryan
Chris Wagner
off-hand, and I can't even remember what example or content it was that
got me excited about Ripple, in the first place.
It surely wouldn't be bad to make use of existing infrastructure to
bring Ripple to life, but it seems like banks and credit companies (and
such) have a lot to lose from the decentralization of
credit/money-creation.
I'll let you know if I think of an example that might intrigue me.
Perhaps two or three examples would do the front page more justice (?).
...Actually -- I just realized what gets me excited: the idea of using a
"credit card" that connects to a (or *the*) Ripple network, and allows
me to make purchases using credit granted to me by my friends and
business contacts, rather than credit granted by an over-sized credit
company that will charge me interest. That sounds really cool to me.
If you think that is a reasonable example, I can try to write up a sort
of storyline a la the one on the current homepage. It's up to you
though; I'm just a troll, thus far!
Chris
Thomas Hartman
ripple-linked credit card!
I like the ripple-over-credit card example as well. By all means, come
up with more :)
thomas.
On Mon, Mar 31, 2008 at 8:05 PM, Chris Wagner
Ryan Fugger
http://ripple.sf.net/examples.html
Let me know what you think.
Ryan
Alexis Delevett
and the emphasis on usage scenarios are both very
healthy steps it would seem.
Rather than an example I have a question regarding a
scenario that extends on the notion of an "arbitrary
currency network". I work in a transitional housing
("homeless") shelter where, rather than providing only
shelter (and food), a full-fledged program attempting
to guide clients towards self-sufficiency is in place.
At the heart of this program is a rather comprehensive
catalog of rules or behavioral prescriptions (ranging
from, e.g., sobriety and non-violence to establishing
income and savings) that more or less governs access
to services (anything from childcare to computer use
and, ultimately, housing).
While there is an elaborate system that keeps track of
the residents' infractions there is no formal system
in place to create incentives and reward "positive"
behaviors. Without knowing this for sure, it is at
least possible that a lot of the positive client input
gets lost and never integrated into the individuals'
progress. Now, clients have IDs with scan codes and
I'm wondering whether it is in principle possible to
relate this to a Ripple setup where clients could
manage their "kudos" accounts, including extending
credit to each other? Ideally, this would allow for a
more balanced treatment of individual cases and
encourage a sense of agency not otherwise achieved.
--- Ryan Fugger <rfu...@gmail.com> escribió:
____________________________________________________________________________________
¡Capacidad ilimitada de almacenamiento en tu correo!
No te preocupes más por el espacio de tu cuenta con Correo Yahoo!:
http://correo.espanol.yahoo.com/
Thomas Hartman
currency called kudos, and issue kudos credits to your clients.
Clients could also issue kudos credits to each other, so theoretically
you could wind up with an infinite number of kudos in circulation.
However, if they tried to spend their credits with you, they wouldn't
have an infinite supply, even if another client had given them a large
number of kudos credits.
It would seem simpler to just issue some hard-to-counterfeit scrip
though, wouldn't it?
My gut feeling is that this isn't a good use case, but maybe I
misunderstood what you want to do.
Thomas.
Thomas Hartman
educational/entertainment value alone!
Ripple certainly encourages a certain worldview that I think is
healthy, and forces you to think about things aspects of society that
you otherwise might not.
On Mon, Mar 31, 2008 at 9:34 PM, Alexis Delevett <adel...@yahoo.com> wrote:
>
Alexis Delevett
on my mind. I sure hope it won't derail what I felt
was a productive discussion about the nature of the
Ripple system (facilitating vs. replacing existing
financial systems).
--- Thomas Hartman <thomash...@googlemail.com>
escribió:
=== message truncated ===
____________________________________________________________________________________
ĄCapacidad ilimitada de almacenamiento en tu correo!
Chris Wagner
(This response is regarding a suggestion I made about the content on the
front of the Ripple homepage: http://ripple.sourceforge.net/. See
below for the original conversation.)
First of all, the first item on the homepage now says, "How does Ripple
work?", but then it goes on to explain how Ripple *might be used* in the
future. Might I suggest dividing that into two separate questions?
Perhaps the first question could be "What is Ripple?" followed by a
brief description (one sentence, maybe). Then, the second
question/answer could provide the example future use-case; maybe with
the title "Could you give an example use-case?".
---------------------------------------------------------------------------
Imagine you could make a purchase using only credit granted to you by
your friends and others that trust you. Now, suppose your best friend
has a good relationship with your local grocer. And suppose you, your
friend, and your local grocer are all members of a Ripple network.
Through Ripple, you and your friend have granted each other a sizable
sum of credit (say, ten silver ounces worth); and your friend and the
local grocer have granted each other a similar amount of credit.
Now, suppose you have a "credit card" that holds your Ripple account
information; it allows you to make purchases at any store that accepts
Ripple credit. Since your local grocer accepts Ripple credit for
purchases, you decide to pick up a few items at his store. Let's say
the items you choose add up to a cost of two silver ounces. When you
swipe your "credit card", the Ripple network makes the appropriate
transactions: it credits your friend with two silver ounces worth,
placing you in debt by the same amount, to him; and your local grocer is
also granted that same amount of credit, placing your friend two silver
ounces in debt to the grocer. Your friend acted as a conduit for your
transaction, enabling goods to be exchanged via a simple network of
trust!
So why is this better than using a regular credit card -- say a Visa or
a MasterCard? In the end, for several practical reasons, but the big
over-arching benefit has to do with the distribution of the "money
trust". One immediate and tangible benefit is that your friend is
unlikely to charge you interest on your debt, since the two of you have
a mutual credit relationship -- since you have granted him credit, as
well, and he can make exchanges in which you act as a conduit. Another
obvious benefit is that you'd need not prove your worth (your "credit
worthiness") to some big, inaffectionate credit company; you'd only need
to prove your trust to your friends and acquaintances (friends that are
also trustworthy people, of course).
You may be quick to dismiss this concept, assuming it will only be
useful on a small scale -- say, only in a sizable neighborhood.
However, you may have heard of the "six degrees of separation" concept
( http://en.wikipedia.org/wiki/Six_degrees_of_separation ), which
purports that you are separated by each other person on Earth by an
average of only six relationships. No one may know how well Ripple will
scale until we try, but it's easy to imagine how credit links could
quickly become abundant, as more people join the network.
--------------------------------------------------------------------------
Okay, that's my stab. Please feel free to use it if you like it; if
not, no worries. :)
Also feel free to make adjustments if you want. I'm not sure if using
"silver ounces" as the example currency is good, when trying to explain
to someone who may have never heard of using such a thing as money, but
I went with it as that's my favorite unit of account. ;)
Regards,
Chris W.
Ryan Fugger
I've tried to make a distinction between Ripple, which is dynamic
payment routing in any context, and Ripplepay.com, which is
interpersonal Ripple on a particular website. The project page
focuses on payment routing in a more general context. Specific
examples are addressed here:
http://ripple.sourceforge.net/examples.html
Do you see anything you would add to the interpersonal Ripple example?
Ryan
On Wed, May 14, 2008 at 7:50 PM, Chris Wagner
Chris Wagner
Yes, I understand the difference between Ripple (the general system) and
RipplePay.com (an implementation of a Ripple network). I just found the
example on the front page of ripple.sourceforge.net to be less
interesting than other use-cases, as it brings banks into the mix -- and
most people don't have trouble routing money across the globe as it is
now, using the current banking system, so they may not see the value in
Ripple immediately. Perhaps I'm unclear on the audience you're
targeting. :-/
I guess I don't have anything to add to the interpersonal Ripple
examples, though.
Regards,
Chris
Ryan Fugger
and expense to route money around the world. It seems silly that I
can't instantly transfer money between any two bank accounts in the
world cheaply and easily. Usually it takes several days, costs a fair
amount, and involves too much error-prone paperwork and manual
intervention.
Ryan
Utunga
I really believe it works much better than the old story to evoke the
feel and reasoning behind ripple.
On the other hand, the idea that it could easily 'go international' is
certainly an unexpected idea that may well 'make it stick' (I'm
reading this great book called 'Make It Stick' at the moment btw
highly recommend.. but, anyway..).
Maybe it would be even more powerful to follow up the "you are
network, given the extent of international friendships and travel, may
allow easy routing *around the world*. That can be the kicker.
But I think the main point of this - for me - is that its distributed
and avoids big faceless institutions and bank fees etc. That is, from
a very first approximation Ripple (the protocol or the first
implementation) is kinda like "the open source of banking". That is
something that rises from the ground up through the bazaar and the
social network, rather than being imposed top down by big banks.
Involving 'your online banking service' and such kinda fuzzies that
image - even if the point you make is a good one.
Just my opinion, and I'm not exactly involved with this project so
what would I know.
Keep up the good work. Thanks
Miles
Perhaps
On May 15, 2:50 pm, Chris Wagner <christopher.t.wag...@gmail.com>
wrote:
tomo
Let me preface by saying I just joined this group, and have only
started to read up on Ripple. So my comments may be very n00by and
addressed somewhere obvious. But having said that, this whole p2p
payment thing has been something on my mind for a couple of years,
albeit never beyond concept. So Ripple certainly resonates with me,
and I hope I have some useful input.
In reading this thread, a couple of things come to mind. First, I
share the desire to have p2p payments that are not intermediated by
the financial infrastructure. The simplest example I can come up with
is this: I can sit across the table from you, and pass you $10. End of
transaction. There is no online equivalent of that at present, because
everything, everything, goes through at least one server and is
therefore traced. So being able to replicate the anonymity of a cash
transaction is, I think, desirable, and makes something like PayPal
not ideal. (A side question though is: is a Ripple payment truly p2p
and/or anonymous?)
But the problem with disintermediation and inventing your own currency
("kudos", from above) is that in the real world, you will need to
eventually convert kudos to cash. You will never achieve the ubiquity
necessary to make hard currency obsolete. There have been numerous
attempts at creating alternative currencies, and I have yet to see one
that sticks. In a LETS system, the "L" is important because it is
tough to break out in very broad use. Thus you need banks, or someone
with deep pockets that would be at the root of a Ripple network that
could "cash out" your kudos to use offline. It is sort of like a
casino. Your chips are good while you are on the premises (or maybe
while you are in Vegas proper), but if you want to spend your winnings
at home, you need to go to the cashier.
Maybe I am saying the same this as Ryan above when he refers to
"convincing existing payment intermediaries". But I very strongly
doubt that banks would be those intermediaries, for a number of
reasons. First, this whole thing is not in their best interests. Why
should they want to participate in their eventual demise? But more
immediately, banks are heavily regulated institutions and would not be
likely to participate in something that is, essentially, unregulated.
All the use cases talk about $10 here and there, but what about
$10,000, or $1,000,000? There would theoretically be no reason I could
not owe you 1,000,000 kudos in Ripple, but something like that *is
required* to show up in the real world, for money laundering, tax
evasion, or anti-terrorism reasons, to name three. Only in relatively
small networks are you like to find a "convincing intermediary",
because only in a small network is everyone likely to trust him/her/
it.
But I will say that the coolest aspect of Ripple is "the ripple": the
settling of multiple debts through the network. This is like the ACH
of the banking system where cheques are netted out so that flows of
cash between banks are reduced to their net equivalents. I think that
the protocol between Ripple servers (which I gather is still under
design) should account for this netting, assuming that each server
used the same currency. But something I read (and now I cannot find
it!) suggested that each Ripple server could have their own currency.
I would suggest that *could* should not imply *should*. What is the
point of replicating the whole ForEx infrastructure? Who decides the
exchange between kudos and quaatloos?
Anyhow, this is very interesting stuff and I look forward to following
this project. Maybe my comments might stimulate some additional
discussion on how Ripple might fit into the bigger picture.
-- tomo
"Breathing in long, he discerns, 'I am breathing in long'" - MN 118
On May 14, 10:50 pm, Chris Wagner <christopher.t.wag...@gmail.com>
wrote:
Corey
You bring up something that has been on my mind recently -- the need to make massive payments immediately between anonymous "nodes". When working between companies or governments or what have you, this is an essential feature of any monetary system. Ripple is, of course, incapable of this.
For this reason I've come to the conclusion that Ripple is not likely to be used in business transactions at all, but "merely" between persons who trust each other. It is by all accounts a supplementary system. It is not an alternative nor a substitute of any kind.
But that, I think, is just fine. Redundancy is a fundamental attribute of resilient systems. In this case the auxiliary system, Ripple, is extraordinarily robust, able to withstand an immense amount of damage to its network before it fails, thanks to its distributed nature. This makes it a prime candidate for a fallback system, but it important that it is used in the meantime, obviously, else it would be too difficult to switch to it in time of crises. The transition needs to be seamless.
I think we can use Ripple as a transitional system as well. It will provide the omnipresence of stability as the primary monetary system is rebuilt. So while the old system might break, Ripple will be able to handle the load to keep the economy moving. When the new primary system is ready, Ripple could still be used as the personal monetary system and remain as the fallback measure.
Would this work? Is this how any of you envisioned as Ripple's potential role? Other thoughts?
Corey von Birnbaum
coldconstructs.com
tomo
I think that for the reasons I mentioned, massive payments would
simply be offside. And the way I see it, businesses and governments
would necessarily *want* the tracking, etc., of a formal payment
system and not embrace a power-to-the-people kind of system. And the
argument would probably be presented: who would need to do massive
payments anonymously except those involved in dubious/nefarious
enterprises?
Like most anything, Ripple can be used for good or ill. I am sure that
hawala systems existed for a long time quite nicely before being
painted with a post 9/11 brush.
Stuff to consider when trying to change the system.
>
> read more »
Corey
// Corey
Chris Wagner
At one level, Ripple is essentially the same as the current banking/credit system; it just twiddles some bits. But, at a more detailed level, Ripple (as I understand it) is many times better because it is distributed. (I can see Ripple eventually being distributed in the way that the Internet is or, more specifically, in the way that email is. There could be many online services that offer Ripple accounts to anyone interested, as Yahoo, Google, etc. currently do with email).
So, I think it's only a matter of the confidence that people have in the system. Currently people have incredibly naive but strong confidence in the world's banking system. The system is very corrupt and unfair and fragile. I'm sure Ripple will begin as something used only amongst fringe groups, like the people on this list, but I don't know of any technical reason that it shouldn't become something used in place of everything banks and credit card companies currently do.
But I've still got to get me Ripple shop set up... ;)
Chris W.
Josef Davies-Coates
Tomo: you may be interested in http://opencoin.org a set of GPL'd protocols for creating anonymous digital cash :)
Josef.
--
Josef Davies-Coates
07974 88 88 95
http://uniteddiversity.com
Together We Have Everything
Josef Davies-Coates
I really like what they do expect for they use standard credit reference agencies to calculate trustworthiness and hence the amount of interest one has to pay on a loan.
What if I'm really trust worthy but have already screwed the banks over a little by going bankrupt (essentially creating a load of interest free money which is actually a good thing)?
In their current system such a person would still be unable to get a low cost loan. Perhaps if a load of people with good credit rating (under the current silly system) gave them credit on ripple they would be able to access more cost effective finance?
Seems to me to potentially be a nice half-way solution :)
Josef.
cjen...@googlemail.com
As I said here
http://www.atimes.com/atimes/Global_Economy/JD03Dj04.html
the "true" economic function of banks as credit intermediaries is to
guarantee the credit of the borrower.
Banks back this implicit guarantee with a pool of proprietary capital
(at levels prescribed by the Bank of International Settlements) , and
anything above their operating costs and defaults represents a -
usually excessive - profit (which is one of the causes of inflation,
but that's a sideline).
We can replicate - and therefore make redundant - Banks' provision of
"trust" through implicit guarantee.
We do this by creating a mutual risk sharing "Guarantee Society"
protocol backed by a "Pool" funded by both lenders AND borrowers
contributing to a mix of subscription and provisions.
ie users don't so much have a "credit limit" as a "guarantee limit".
The result is essentially disintermediated banking operating on a "Not
for Loss" basis, and in fact incorporates the "Clearing Union" as
proposed by Keynes at Bretton Woods.
Btw. There's an interesting turnout at the forthcoming BarCampBank
London on Saturday 5th July
http://barcamp.org/BarCampBankLondon
where I aim to be presenting on the Guarantee Society, and also
"asset- basis"/ unitisation (through Capital Partnerships) for
currency.
Pity there'll be no-one there from Ripple,.
Be there or be square.
Chris
On Jun 24, 10:06 pm, "Josef Davies-Coates" <jo...@uniteddiversity.com>
wrote:
> consider using ripple?
>
> I really like what they do expect for they use standard credit reference
> agencies to calculate trustworthiness and hence the amount of interest one
> has to pay on a loan.
>
> What if I'm really trust worthy but have already screwed the banks over a
> little by going bankrupt (essentially creating a load of interest free money
> which is actually a good thing)?
>
> In their current system such a person would still be unable to get a low
> cost loan. Perhaps if a load of people with good credit rating (under the
> current silly system) gave them credit on ripple they would be able to
> access more cost effective finance?
>
> Seems to me to potentially be a nice half-way solution :)
>
> Josef.
>
> 2008/6/24 Josef Davies-Coates <jo...@uniteddiversity.com>:
>
> > Great discussion :)
>
>
> > Josef.
>
>
> read more »