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You've actually got it wrong. Debt-based "ripple" bitcoin (or any other similar system) is not fully interchangeable; you can use BTC IOUs within ripple and pa

by eof 13y ago

You've actually got it wrong. Debt-based "ripple" bitcoin (or any other similar system) is not fully interchangeable; you can use BTC IOUs within ripple and pass them around, but you cannot send an IOU across the bitcoin network. This is different than with fractional reserve; where 'created' money can be withdrawn, spent, and intermingled without any differentiation.. I can spend a fractionally-reserve created dollar at walgreens as easily as a bona-fide fed printed dollar bill. You cannot send a Ripple BTC to my bitcoin-qt wallet, nor will bitpay/coinbase/blockchain or any other blockchain-audited wallet accept a btc-iou. edit: i basically agree with your other point that the the stated reasons in OP are not the reasons bitcoin will likely undergo s-curve adoption

wmf 13y ago
Unless blockchain transaction fees become so high that BTC-denominated IOUs become the standard.
crystaln 13y ago
You're right that BTC IOUs on Ripple are not fully interchangeable with BTC. However, neither was gold interchangeable with USD, yet each gold note was redeemable for gold. This did in may ways restrict the level of fractional reserve banking, and certainly the direct issuance of money. (Many suspect that the US did not have nearly enough gold to redeem all its currency, and that this was a primary motivation for leaving the gold standard.) The process of redemption of BTC IOUs for actual BTCs on the Ripple network resembles the process of redemption of gold-backed USD for gold. Similar to gold being transmitted over a different network than gold-backed USD (the former being physical,) BTC backed notes would be transmitted over a different network - something like Ripple. Fractional reserve banking can also be practiced directly with BTC, simply by lending against deposits. (explained here: http://www.cnbc.com/id/101048897 http://www.cnbc.com/id/101048897)
- dnautics 13y ago
  "Many suspect that the US did not have nearly enough gold..." That's an understatement! It was the national policy of an entire country i.e. France (well I guess not all their citizens directly practiced this suspicion) to withdraw its gold reserves in the US for precisely this reason, until nixon closed the window in 1970.
  - gaadd33 13y ago
    How did Nixon taking the dollar off the gold standard change where France keeps it's gold reserves? Do you mean their standard policy was to convert all dollars received into gold? Doesn't pretty much every major country still keep some fraction of its gold reserves in the basement of the NY Federal Reserve?

by eof 13y ago

wmf 13y ago

Unless blockchain transaction fees become so high that BTC-denominated IOUs become the standard.

crystaln 13y ago

You're right that BTC IOUs on Ripple are not fully interchangeable with BTC. However, neither was gold interchangeable with USD, yet each gold note was redeemable for gold. This did in may ways restrict the level of fractional reserve banking, and certainly the direct issuance of money. (Many suspect that the US did not have nearly enough gold to redeem all its currency, and that this was a primary motivation for leaving the gold standard.) The process of redemption of BTC IOUs for actual BTCs on the Ripple network resembles the process of redemption of gold-backed USD for gold. Similar to gold being transmitted over a different network than gold-backed USD (the former being physical,) BTC backed notes would be transmitted over a different network - something like Ripple. Fractional reserve banking can also be practiced directly with BTC, simply by lending against deposits. (explained here: http://www.cnbc.com/id/101048897 http://www.cnbc.com/id/101048897)

dnautics 13y ago
"Many suspect that the US did not have nearly enough gold..." That's an understatement! It was the national policy of an entire country i.e. France (well I guess not all their citizens directly practiced this suspicion) to withdraw its gold reserves in the US for precisely this reason, until nixon closed the window in 1970.
- gaadd33 13y ago
  How did Nixon taking the dollar off the gold standard change where France keeps it's gold reserves? Do you mean their standard policy was to convert all dollars received into gold? Doesn't pretty much every major country still keep some fraction of its gold reserves in the basement of the NY Federal Reserve?