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Will Ripple Eclipse Bitcoin?
First time accepted submitter groggy.android writes This year's biggest news about Bitcoin may well turn out not to be the repeat of its surge in value last year against the dollar and other state currencies but its impending eclipse by another independent but corporate-backed digital currency. Popularly known as Ripple, XRP shot up in value last year along with other cryptocurrencies that took advantage of the hype around Bitcoin. However, among the top cryptocurrencies listed in Coinmarketcap.com, a site that monitors trading across different cryptocurrency exchanges, Ripple is the only one that not only regained its value after the collapse in the price of Bitcoin but has more than doubled from its peak last year. In September it displaced Litecoin to become the second most valuable cryptocurrency. Even more surpising, a Ripple fork, Stellar, is one of the two other cryptocurrencies in the Coinmarketcap top ten that have risen sharply in value during the last few weeks.
What makes Ripple different from Bitcoin? Strictly speaking, Ripple isn't the name of the digital currency but of the decentralized payment network and protocol created and maintained by the eponymous Ripple Labs. Users of the Ripple system are able to transact in both cryptocurrency and regular fiat currency like the dollar without passing through a central exchange. XRP is the name of the native unit of exchange used in the Ripple network to facilitate conversion between different currency types.
What makes Ripple different from Bitcoin? Strictly speaking, Ripple isn't the name of the digital currency but of the decentralized payment network and protocol created and maintained by the eponymous Ripple Labs. Users of the Ripple system are able to transact in both cryptocurrency and regular fiat currency like the dollar without passing through a central exchange. XRP is the name of the native unit of exchange used in the Ripple network to facilitate conversion between different currency types.
"My one true goal is create a system to transact in both cryptocurrency and regular fiat currency like the American dollar without passing through a central exchange."
-A. Hitler, September 27th, 1941.
If we go down this path...this dark, horrible path...we will be realizing his dream. That is why we must never use Ripple.
The competition among virtual currencies and their continuing evolution demonstrate their uselessness as stores of value.
If I hold wealth in Virtual Currency A, and if Virtual Currency B is developed and eclipses it in popularity, my store of value has been degraded.
Regardless of your view on national currencies (vs. gold and silver), national currencies have the benefit of designation as official mediums of exchange. Using a virtual currency is equivalent to using a national currency of a small nation that maybe overrun or collapse at any moment. The moment it loses popularity, your wealth disappears.
Boone's Farm? Thunderbird?
Are Bartle and James on the board?
I'm a consultant - I convert gibberish into cash-flow.
Ripple and Stellar both pre-created something like a trillion coins that they put into their creators pockets. Then they've doled out a very tiny portion of them and as soon as one trades for a cent they instantly have a market cap of "billions".
Funny you mention Ripple's "value" growth: It apparently was too slow for its creators, as they (almost the entire original development team, and their CEO) abandoned it and rebooted their scheme in Stellar.
Both systems aren't decentralized in the sense that Bitcoin is-- they require a centerally administered list of trusted transaction processing servers, which has pluses and minuses. Unfortunately, they don't seem to be especially forthcoming about these limitations.
...let's see:
So it's not actually a real competitor to Bitcoin. How about a look at the Wikipedia page:
At best, it's not competing with BC in the first place, and at worst it sounds too complex for consumers to get their heads around.
So I guess the answer to the original question is a resounding "no", but Betterage could have told you that.
Isn't the biggest problem for these digital currencies the fact that their can be an infinite number of competing currencies?
For the umpteenth time... ripple runs through a distributed network consisting of host nodes and validators. The host nodes are controlled by Ripple labs. HENCE it is a centralized exchange
Ripple is a debt accounting system.
You can send Dollars or gold over Ripple - you can transfer promissory nodes for those things.
The difference between a promissory note and the value the note represents is something that Ripple should be trying to clarify - instead they seek to obscure it.
Because they try to pretend that promissory notes are equal to underlying assets, they don't include any features that would act like leverage limits. There is no ability to deal with counterparty risk rationally in their system, since trust in a counterpary is binary.
In real world, liabilities of different entities are discounted by a value that reflects their credit risk. Ripple does not permit this operation. You either value liabilities at par or not at all.
As others have mentioned, their consensus system is neither distributed nor trustless. It's a centralized, badly-designed, debt accounting system trying to pretend it's a trustless cryptocurrency.
Ripple is centralized and works based the economic principles of debt like most Fiat which is fundamentally different than Bitcoin where the token is a store of value itself instead of Ripple which uses "ripples" or XRP as an anti-spam token to process transactions and all payments are debt based, which carry counter-party risk.
In other words, they are not similar at all in nature and both will likely co-exist with Ripple appealing more to governments and banks.
200 quatloos on the newcomer.
Yeah. But which government?
One of the key advantages of today's crypto-currencies is that they are effectively global. Not unduely influenced by any single national government.
I would think that broad adoption of a cryptocurrency by a large fraction of the global population might help make the cryptocurrency's value stable, after initial (and unstable) growth in value due to growth in adoption.
Where are we going and why are we in a handbasket?
Jed McCaleb left. The original development team (myself, Arthur Britto, Stefan Thomas, Vahe Hovhannisyan, etc) is still here, and Chris Larsen, the first CEO, is still CEO. Ripple Labs currently has more than 80 full time employees working to develop and promote the protocol.
Ripple does not require a centrally administered list of trusted transaction processing servers. That's just like arguing that Bitcoin requires a centrally administered list of valid transaction formats. Substantial agreement does not require central administration.