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What I've never understood about XRP and Ripple is that originally XRP was meant to only be used for paying for transactions and the ledger was meant to track I

What I've never understood about XRP and Ripple is that originally XRP was meant to only be used for paying for transactions and the ledger was meant to track IOUs between people denominated in some other "real" currency. They had videos floating around explaining the concept. In fact, they were handing out XRP for free to bootstrap the network of users [0] (that post says 1000 XRP, originally it was 30,000 XRP when the post was first created). XRPs themselves were basically worthless, but it was required to interact with the ledger (you pay maybe 0.000001 XRP per transaction). The idea was that you pass a small amount on to friends and others interested in using it to create their wallet and start tracking IOUs, and you needed to have at least 20 XRP in your wallet. Somewhere along the way all hell broke loose, Bitcoin got popular, crypto currencies in general got popular and XRP itself suddenly became worth something, the original concept got lost and everything seemed to go off the rails... That's when I lost interest. [0] https://bitcointalk.org/index.php?topic=145506.0 https://bitcointalk.org/index.php?topic=145506.0

ehmmmmmmmm 6y ago
XRP went down, interestingly enough. I would have hoped for the community to collude and vote/bid its price up to give the SEC a big "ha" and also cover the costs of lawsuits. After all crypto is one place where markets can be manipulated and the proceeds put to good use.
- 3np 6y ago
  I'm pretty sure this is precisely what has happened, but I'm not as happy about it.
russdpale 6y ago
it was doomed from the start, it was never a real crypto currency.
pat2man 6y ago
I remember their original pitch sounding like it made a lot of sense. Fast, cheap, verifiable trading layer for IOUs that can then be settled externally. A lot like how many stock exchanges work. Ended up selling any XRP I had two years ago when things went nuts. Now it looks like people are re-building that whole concept elsewhere and Ripple is becoming irrelevant.
- rojeee 6y ago
  Interesting. Do you have any links to some of the new IOU market maker projects? Cheers
  - rglullis 6y ago
    Raiden is doing that for the ethereum network, if you count the fact that each node can be a mediator for multi-hop transfers. https://raiden.network https://raiden.network
    - drcode 6y ago
      Raiden has fallen short on delivering a workable system and has had funding issues... most people people in the ethereum space are now banking on rollups filling these use cases (a competing approach for low-cost transactions) Though certainly I'd be pleasantly surprised if Raiden still pulls through on their plans at some point.
      - UShouldBWorking 6y ago
        So happy to see actual discussion of cryptocurrency concepts and not just visceral hate for all things crypto on hacker news. New line it looks like you guys have really turned a corner I'm proud of you hacker news.
      - rglullis 6y ago
        Raiden has many issues, but funding is not one of them. Part of the hiring pitch from Brainbot was that the ICO got them funds to finance their operation for a decade at least. Speaking as someone who worked on Raiden's core team last year and spent a reasonable part of this year working on a project received a grant from the Raiden Trust [0], the last release is workable, but still requires a lot of elbow grease and knowledge of the protocol to get it running. End users will certainly have a better shot when the light client gets parity to the reference implementation and gets a mainnet release. In any case, I just wanted to point out that Raiden is a project that is related to what OP asked about and that is still alive and kicking. [0]: https://hub20.io https://hub20.io, a self-hosted payment gateway that integrates with Raiden and abstracts all its complexity from the users and node operators to enable fast and near-instant transactions.
garmaine 6y ago
No, that was the idea of Ripple, invented by Ryan Fugger long before bitcoin even existed, and requires no new coin or token for its operation. OpenCoin, a company founded by Jed McCaleb, bought the trademarks other IP for Ripple and rebranded their bitcoin competitor altcoin as XRP. They never had any interest in the original concept, and quickly threw it away when it was no longer fashionable.
- gst 6y ago
  The original Ripple site was available for a while under https://classic.ripplepay.com/ https://classic.ripplepay.com/. I just noticed that Ryan is now operating it under the new domain https://rumplepay.com/ https://rumplepay.com/.
- jl2718 6y ago
  I don’t remember if I had ever talked to Ryan, but I remember talking to people about this in forums and in person at Stanford and Cal in 2007. By 2005, the financial system was showing signs it was headed toward a point of no return because there was no revenue basis to justify the debt leverage, and the only way out was either extreme dollar scarcity, or previously unthinkable monetary base injections. Either way, there was some concern that we’d need a system of barter for those soon to be left behind by the banking system, and some hope that a massively decentralized barter network would be a more just and stable and productive economy regardless. The main theoretical discussion was whether a system could exist without a central currency. Most ripple believers thought that central currency was basically antithetical, although one based on unskilled labor hours might be acceptable as fallback. I believe this transformed into a resurgence of interest in HashCash, which had only been interesting for spam mitigation, but now looked like a possibility on Ripple. There were some weaknesses in the protocol, however, and as soon as the sci.crypt community got pulled into it, they dove into the double-spending problem. The old methods of Chaum’s blinded signatures didn’t work for decentralized exchange because you’d have to trace every coin back to its original minter. So the question was whether to use the network of confirmations to create an acceptable level of trust, or to maintain a central ledger, which looked a lot like a central bank. Satoshi’s concept was to use hashcash to both secure the ledger and issue currency. This was brilliant but antithetical to the no-currency concept, and re-ignited the debate, with Szabo and Dai reviving their own currency ideas and heading toward implementation with Finney. The ripple crowd were mostly interested in new ideas in economics, and as nobody could find a way of securing a decentralized exchange network without a currency, most of the interest faltered. Sure; you could decentralize the currency, but it doesn’t succeed in prioritizing reward to those performing useful work. At some point Mazieres entered with a more rigorous defense of trust generated by the network, but it still relied on a central token of value to process each exchange. Bitcoin emerged from the impending doom of financial collapse as a less hopeful but more realistic option, and interest in cryptocurrency in general fell off dramatically as the Bitcoin network went through its dead period of only one consistent miner, Satoshi himself. Ripple as XRP emerged much later in the post-Doge altcoin boom with huge investments, big claims about XRP in deals to replace Forex, hiring a lot of people, and were the only job option for the people that would be their critics. To the original ripple supporters, XRP looked no different than a central bank with, except that it was even more autocratic, unaccountable, and unequally-distributed. In no way did XRP fix the basic problem of allocating more rewards to useful work. I could go on... but... just my recollection...
px43 6y ago
Yup, the original vision of Ripple was payment channels, like what the Lightning Network is trying to be today. Pretty shameful how they abandoned all that to become a shitty version of PayPal.
hardwaresofton 6y ago
> What I've never understood about XRP and Ripple is that originally XRP was meant to only be used for paying for transactions and the ledger was meant to track IOUs between people denominated in some other "real" currency. They had videos floating around explaining the concept. In fact, they were handing out XRP for free to bootstrap the network of users [0] (that post says 1000 XRP, originally it was 30,000 XRP when the post was first created). So the thing is, isn't this kind of system (very similar to a concept I can only remember as Hawala[0]) explicitly illegal? > Hawala or hewala (Arabic: حِوالة‎ ḥawāla, meaning transfer or sometimes trust), also known as havaleh in Persian,[1] and xawala or xawilaad[2] in Somali, is a popular and informal value transfer system based not on the movement of cash, or on telegraph or computer network wire transfers between banks, but instead on the performance and honour of a huge network of money brokers (known as hawaladars). While hawaladars are spread throughout the world, they are primarily located in the Middle East, North Africa, the Horn of Africa, and the Indian subcontinent, operating outside of, or parallel to, traditional banking, financial channels, and remittance systems. Hawala follows Islamic traditions but its use is not limited to Muslims.[3] > Some government officials[which?] assert that hawala can be used to facilitate money laundering, avoid taxation, and move wealth anonymously.[citation needed] As a result, it is illegal in some U.S. states, India, Pakistan,[14] and some other countries.[citation needed] The whole IOU system doesn't need crypto to work -- but you just can't set up the kind of clearing house/federation that you'd need in the US because it's illegal, I thought. [0]: https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala
- garmaine 6y ago
  Ripple (old-school Ripple, not XRP) doesn't need any clearing house or federation. It's just you, me, and the hops along the way interacting long enough to facilitate the transaction.
  - hardwaresofton 6y ago
    My point is that how is that not a hawala system, just facilitated by a distributed ledger instead of phone calls? If it is, why isn't illegal just like those other systems? The similarity here I thought was the trading of IOUs -- this seems to be very similar to what hawala is/was.
jaime-ez 6y ago
Indeed. I was involved back in 2014 and never understood why people didn't saw ripple as an open source central bank back end infrastructure. Anyone can start a network running rippled (you, me, the central bank), it is simple, ressource efficient, with our own "internal" XRP which are only used as rate limiters for transactions and then interconnect those networks at will. I don't get why there have been so many governments developing they're own infra for making their national currencies as a cryptocurrency, all they need to do is run a parallel ripple network
snarf21 6y ago
There are all pyramid schemes. All the alt-coins exist only because BTC got too expensive and they wanted in. A lot of people are going to be left holding the bag.
- bartvk 6y ago
  Absolutely all of them? You may want to look for some subtlety. There are coins with a specific purpose, for example Monero, that have a clear purpose which is separate from Bitcoin.
- drchopchop 6y ago
  And the vast majority of people "investing" in it have no concept of the underlying tech/utility/scalability/whatever, they only care "token go up!" and essentially treat it as a penny stock. It'll eventually tank, but not until the insane FOMO ends. For example, the completely useless Dogecoin still has a $600M "market cap", and at one point popped over $2B.
  - randomopining 6y ago
    Yup, I think the same. I think there’s a lot more “hype runway” left though. It’ll prob hit at least 50k
- hanniabu 6y ago
  While I generally agree, there are a few exceptions. Ethereum exists because Bitcoin isn't capable of running complex scripts. Monero exists because Bitcoin is too transparent.
- dylkil 6y ago
  >There are all pyramid schemes Do you include ethereum here? if so you are woefully misinformed.
- UShouldBWorking 6y ago
  Amazing such obtuse comments like this even show up on HN still. The BTC GitHub repo was hijacked years ago by corporate interests and Blockstream. They artificially limit the number of transactions to try and push people onto their "second layer" products. BCH (for example) forked just in time and follows the original Bitcoin White Paper. Ethereum aims to be a global decentralized computer, XMR is building an anonymous version of BCH. Wake up dude, it's almost 2021 and even central banks has realized the benefit off crypto currency. Users like this are either trolling for Blockstream or legitimately have no place commenting about crypto.
reidjs 6y ago
Why not use something like Splitwise for tracking IOUs? What use is a blockchain/cryptocurrency for this?

ehmmmmmmmm 6y ago

XRP went down, interestingly enough. I would have hoped for the community to collude and vote/bid its price up to give the SEC a big "ha" and also cover the costs of lawsuits. After all crypto is one place where markets can be manipulated and the proceeds put to good use.

3np 6y ago
I'm pretty sure this is precisely what has happened, but I'm not as happy about it.

russdpale 6y ago

it was doomed from the start, it was never a real crypto currency.

pat2man 6y ago

I remember their original pitch sounding like it made a lot of sense. Fast, cheap, verifiable trading layer for IOUs that can then be settled externally. A lot like how many stock exchanges work. Ended up selling any XRP I had two years ago when things went nuts. Now it looks like people are re-building that whole concept elsewhere and Ripple is becoming irrelevant.

rojeee 6y ago
Interesting. Do you have any links to some of the new IOU market maker projects? Cheers
- rglullis 6y ago
  Raiden is doing that for the ethereum network, if you count the fact that each node can be a mediator for multi-hop transfers. https://raiden.network https://raiden.network
  - drcode 6y ago
    Raiden has fallen short on delivering a workable system and has had funding issues... most people people in the ethereum space are now banking on rollups filling these use cases (a competing approach for low-cost transactions) Though certainly I'd be pleasantly surprised if Raiden still pulls through on their plans at some point.
    - UShouldBWorking 6y ago
      So happy to see actual discussion of cryptocurrency concepts and not just visceral hate for all things crypto on hacker news. New line it looks like you guys have really turned a corner I'm proud of you hacker news.
    - rglullis 6y ago
      Raiden has many issues, but funding is not one of them. Part of the hiring pitch from Brainbot was that the ICO got them funds to finance their operation for a decade at least. Speaking as someone who worked on Raiden's core team last year and spent a reasonable part of this year working on a project received a grant from the Raiden Trust [0], the last release is workable, but still requires a lot of elbow grease and knowledge of the protocol to get it running. End users will certainly have a better shot when the light client gets parity to the reference implementation and gets a mainnet release. In any case, I just wanted to point out that Raiden is a project that is related to what OP asked about and that is still alive and kicking. [0]: https://hub20.io https://hub20.io, a self-hosted payment gateway that integrates with Raiden and abstracts all its complexity from the users and node operators to enable fast and near-instant transactions.

garmaine 6y ago

No, that was the idea of Ripple, invented by Ryan Fugger long before bitcoin even existed, and requires no new coin or token for its operation. OpenCoin, a company founded by Jed McCaleb, bought the trademarks other IP for Ripple and rebranded their bitcoin competitor altcoin as XRP. They never had any interest in the original concept, and quickly threw it away when it was no longer fashionable.

gst 6y ago
The original Ripple site was available for a while under https://classic.ripplepay.com/ https://classic.ripplepay.com/. I just noticed that Ryan is now operating it under the new domain https://rumplepay.com/ https://rumplepay.com/.
jl2718 6y ago
I don’t remember if I had ever talked to Ryan, but I remember talking to people about this in forums and in person at Stanford and Cal in 2007. By 2005, the financial system was showing signs it was headed toward a point of no return because there was no revenue basis to justify the debt leverage, and the only way out was either extreme dollar scarcity, or previously unthinkable monetary base injections. Either way, there was some concern that we’d need a system of barter for those soon to be left behind by the banking system, and some hope that a massively decentralized barter network would be a more just and stable and productive economy regardless. The main theoretical discussion was whether a system could exist without a central currency. Most ripple believers thought that central currency was basically antithetical, although one based on unskilled labor hours might be acceptable as fallback. I believe this transformed into a resurgence of interest in HashCash, which had only been interesting for spam mitigation, but now looked like a possibility on Ripple. There were some weaknesses in the protocol, however, and as soon as the sci.crypt community got pulled into it, they dove into the double-spending problem. The old methods of Chaum’s blinded signatures didn’t work for decentralized exchange because you’d have to trace every coin back to its original minter. So the question was whether to use the network of confirmations to create an acceptable level of trust, or to maintain a central ledger, which looked a lot like a central bank. Satoshi’s concept was to use hashcash to both secure the ledger and issue currency. This was brilliant but antithetical to the no-currency concept, and re-ignited the debate, with Szabo and Dai reviving their own currency ideas and heading toward implementation with Finney. The ripple crowd were mostly interested in new ideas in economics, and as nobody could find a way of securing a decentralized exchange network without a currency, most of the interest faltered. Sure; you could decentralize the currency, but it doesn’t succeed in prioritizing reward to those performing useful work. At some point Mazieres entered with a more rigorous defense of trust generated by the network, but it still relied on a central token of value to process each exchange. Bitcoin emerged from the impending doom of financial collapse as a less hopeful but more realistic option, and interest in cryptocurrency in general fell off dramatically as the Bitcoin network went through its dead period of only one consistent miner, Satoshi himself. Ripple as XRP emerged much later in the post-Doge altcoin boom with huge investments, big claims about XRP in deals to replace Forex, hiring a lot of people, and were the only job option for the people that would be their critics. To the original ripple supporters, XRP looked no different than a central bank with, except that it was even more autocratic, unaccountable, and unequally-distributed. In no way did XRP fix the basic problem of allocating more rewards to useful work. I could go on... but... just my recollection...

px43 6y ago

Yup, the original vision of Ripple was payment channels, like what the Lightning Network is trying to be today. Pretty shameful how they abandoned all that to become a shitty version of PayPal.

hardwaresofton 6y ago

> What I've never understood about XRP and Ripple is that originally XRP was meant to only be used for paying for transactions and the ledger was meant to track IOUs between people denominated in some other "real" currency. They had videos floating around explaining the concept. In fact, they were handing out XRP for free to bootstrap the network of users [0] (that post says 1000 XRP, originally it was 30,000 XRP when the post was first created). So the thing is, isn't this kind of system (very similar to a concept I can only remember as Hawala[0]) explicitly illegal? > Hawala or hewala (Arabic: حِوالة‎ ḥawāla, meaning transfer or sometimes trust), also known as havaleh in Persian,[1] and xawala or xawilaad[2] in Somali, is a popular and informal value transfer system based not on the movement of cash, or on telegraph or computer network wire transfers between banks, but instead on the performance and honour of a huge network of money brokers (known as hawaladars). While hawaladars are spread throughout the world, they are primarily located in the Middle East, North Africa, the Horn of Africa, and the Indian subcontinent, operating outside of, or parallel to, traditional banking, financial channels, and remittance systems. Hawala follows Islamic traditions but its use is not limited to Muslims.[3] > Some government officials[which?] assert that hawala can be used to facilitate money laundering, avoid taxation, and move wealth anonymously.[citation needed] As a result, it is illegal in some U.S. states, India, Pakistan,[14] and some other countries.[citation needed] The whole IOU system doesn't need crypto to work -- but you just can't set up the kind of clearing house/federation that you'd need in the US because it's illegal, I thought. [0]: https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala

garmaine 6y ago
Ripple (old-school Ripple, not XRP) doesn't need any clearing house or federation. It's just you, me, and the hops along the way interacting long enough to facilitate the transaction.
- hardwaresofton 6y ago
  My point is that how is that not a hawala system, just facilitated by a distributed ledger instead of phone calls? If it is, why isn't illegal just like those other systems? The similarity here I thought was the trading of IOUs -- this seems to be very similar to what hawala is/was.

jaime-ez 6y ago

Indeed. I was involved back in 2014 and never understood why people didn't saw ripple as an open source central bank back end infrastructure. Anyone can start a network running rippled (you, me, the central bank), it is simple, ressource efficient, with our own "internal" XRP which are only used as rate limiters for transactions and then interconnect those networks at will. I don't get why there have been so many governments developing they're own infra for making their national currencies as a cryptocurrency, all they need to do is run a parallel ripple network

snarf21 6y ago

There are all pyramid schemes. All the alt-coins exist only because BTC got too expensive and they wanted in. A lot of people are going to be left holding the bag.

bartvk 6y ago
Absolutely all of them? You may want to look for some subtlety. There are coins with a specific purpose, for example Monero, that have a clear purpose which is separate from Bitcoin.
drchopchop 6y ago
And the vast majority of people "investing" in it have no concept of the underlying tech/utility/scalability/whatever, they only care "token go up!" and essentially treat it as a penny stock. It'll eventually tank, but not until the insane FOMO ends. For example, the completely useless Dogecoin still has a $600M "market cap", and at one point popped over $2B.
- randomopining 6y ago
  Yup, I think the same. I think there’s a lot more “hype runway” left though. It’ll prob hit at least 50k
hanniabu 6y ago
While I generally agree, there are a few exceptions. Ethereum exists because Bitcoin isn't capable of running complex scripts. Monero exists because Bitcoin is too transparent.
dylkil 6y ago
>There are all pyramid schemes Do you include ethereum here? if so you are woefully misinformed.
UShouldBWorking 6y ago
Amazing such obtuse comments like this even show up on HN still. The BTC GitHub repo was hijacked years ago by corporate interests and Blockstream. They artificially limit the number of transactions to try and push people onto their "second layer" products. BCH (for example) forked just in time and follows the original Bitcoin White Paper. Ethereum aims to be a global decentralized computer, XMR is building an anonymous version of BCH. Wake up dude, it's almost 2021 and even central banks has realized the benefit off crypto currency. Users like this are either trolling for Blockstream or legitimately have no place commenting about crypto.

reidjs 6y ago

Why not use something like Splitwise for tracking IOUs? What use is a blockchain/cryptocurrency for this?