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.

Comments

Why virtual currencies are ineffective

[Anonymous Coward]

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.

Re:Why virtual currencies are ineffective

[itzly]

Sometimes early investors/pioneers make a lot of profit. That's not the same as a pyramid scheme.

Re:Why virtual currencies are ineffective

[sexconker]

Sometimes early investors/pioneers make a lot of profit. That's not the same as a pyramid scheme.

Most alternate crypto currencies ARE pyramid schemes.

There's a "pre-mine" amount - the creators, influential people in the scene, pool runners, etc. get a crack at all the early coins and become instant oligarchs within that crypto currency. They then go and shout from the mountaintops how this new crypto currency is going to be the next hot thing so you better get in now!
Then when usage adoption plateaus they dump their millions of coins for fractions of Bitcoin each. A few months later they'll be back with a new crypto currency to do the same old shit.

Re:Why virtual currencies are ineffective

[itzly]

Those are just scams, not pyramid schemes.

Re:Why virtual currencies are ineffective

[thoriumbr]

It's because you are using the cryptocoin wrong. They are not means of holding wealth, but as means of transfering wealth.

If I need to transfer EUR from USA to France, I will have to pay my local bank in USD, convert to EUR, pay the transfer fees, and my counterpart will have to pay some fees there too. Depending on the amount, we both will have to explain something to our governments too.

Using bitcoin I just buy some coins, send them, and my counterpart sells them. Nice, easy, fast, and no taxes, fees or government explanations to give.

People keeps bitcoins on hand because it is increasing in price, but they were not intended to be used like this. You can use as you wish, but if the market breaks down, it's all your fault.

Re:Why virtual currencies are ineffective

[angel'o'sphere]

Regardless of your beliefes: they are not.
They don't strive on 'catching more people' and no one forces the later comming poeple to make payments to the older ones.
It has absolutely nothing to do with a pyramid scheme.

Lies, damn lies, and "market caps"

[Anonymous Coward]

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.

Re:Lies, damn lies, and "market caps"

[sexconker]

Its pretty much the same for bitcoin, those that got there first, including the creator had a very easy time mining tons of coins.

In my opinion, they are all scams but some of they are scams that also might work.

It is believed (but not fully proven) that Satoshi destroyed their fat wallet. Regardless, sitting on a mountain of digital gold does not put food in your mouth. You have to trade it. And all transactions are public. The fact that Satoshi is still anonymous is both surprising and evidence that they have not executed a massive payday in their favor.

As for everyone else who got in early, good for them. Bitcoin wasn't a scam coin with a huge premine followed by hype, pump, and dump like nearly all other crypto currencies.

Will Ripple Eclipse Bitcoin?

[Black.Shuck]

...let's see:

Strictly speaking, Ripple isn't the name of the digital currency

So it's not actually a real competitor to Bitcoin. How about a look at the Wikipedia page:

It is not recommended for a user to grant trust to other parties unless the user fully understands the ramifications.

It is not recommended for a user to allow rippling unless they fully understand the ramifications.

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.

not decentralized!

[Anonymous Coward]

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

Re:not decentralized!

[witherstaff]

I assume the submitter was trying to bump the price. The technical crowd here probably won't be rushing to buy some Ripple. Ripple was entirely pre-mined with almost all of the coins still held by the developers. The pump and dump process with alt coin can be very amusing to watch yet almost all other alt-coins involve only coins actually mined and not held by one entity. While I'm a believer in crypto currencies I am not convinced Ripple is worth having any of.

From the wiki page : The founders of Ripple Labs created 100 billion XRP at Ripple's inception. No more can be created according to the rules of the Ripple protocol. Of the 100 billion created, 20 billion XRP were retained by the creators, seeders, venture capital companies and other founders. The remaining 80 billion were given to Ripple Labs. Ripple Labs intends to distribute and sell 55 of that 80 billion XRP to users and strategic partners. Ripple Labs also had a giveaway of under 200 million XRP (0.002% of all XRP) via World Community Grid that was later discontinued.[28] Ripple Labs will retain the remaining 25 billion

Re:This was Hitler's dream

[xaotikdesigns]

The fact that nobody has created a "hitlerdidnothingwrongcoin" yet, actually gives me a little hope for the internet...

of course, now that I have spoken it, someone will make it...

Almost nothing in the OP is true

[Wonko the Sane]

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.

Re: This was Hitler's dream

[Anonymous Coward]

Your comment is a great example of Grundleson's Law: Any legitimate reference to Adolf Hitler in an online discussion will soon be followed by one or more idiots babbling on about Godwin's Law.

Re:Biggest Probem?

[Mr D from 63]

Isn't the problem with the value of the USD is that there can be an infinite amount of competing currencies expressed by giftcards, crypto-currencies, and other forms of fiat?

No, there is only one currency standard for the country. They can trade with other currencies but everything is based on its relation to the USD, but as far as the USD goes, there is not competitor in the US, and particularly not one that influences the value of the USD.

I'll wager

[Drunkulus]

200 quatloos on the newcomer.

Re:This was Hitler's dream

[Marginal Coward]

No wonder: the quote was from A. Hitler, not the Hitler..

Lies, damn lies, and

[JoelKatz]

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.