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Wouldn't all this stuff work better if it was simply backed by cash? Is stellar/bitcoin a store of value or a transaction mechanism? If it is just a txn mechani

by pbreit 12y ago

Wouldn't all this stuff work better if it was simply backed by cash? Is stellar/bitcoin a store of value or a transaction mechanism? If it is just a txn mechanism then backing it with regular currency is fine. If you want a non-fiat store of value, choose gold or something.

runeks 12y ago
In my view, Stellar is the "IP layer for credit" while Bitcoin is the "IP layer for money". Stellar doesn't actually transfer value (like Bitcoin), it only transfers IOUs, the settlement (actual value transfer) occurs outside the Stellar network. Stellar and Bitcoin achieve two different goals. Ripple can function as a decentralized exchange, while Bitcoin functions alongside USD, EUR, CNY for transferring value.
- etchalon 12y ago
  Of course, "credit" is how the modern banking system works. So an "IP layer for credit" is infinitely more valuable (if it works…which is a big if).
  - runeks 12y ago
    > Of course, "credit" is how the modern banking system works. Correct. Ripple adds another layer on top of the traditional banking system. > So an "IP layer for credit" is infinitely more valuable (if it works…which is a big if). Well, Bitcoin can be credit as well, and can be interchanged with national currencies via Ripple. The two protocols complement each other, they don't compete. Just as the USD does not compete with Ripple (because it is a currency that can be traded on Ripple, just as bitcoins).
alwillis 12y ago
Stellar is a protocol for transacting in whatever currencies you want. The dollar isn't special; it's just another fiat currency. Everything in the Stellar network (except for the stellar cryptocurrency) is credit--an IOU. Which how all fiat currencies work anyway. If I owe you $50 and I write you a check for $50, you consider the debt paid, even though all I did was tell my bank to owe you the $50. When you deposit the check, the money doesn't move; the bank's ledger just gets updated. If there isn't a currency (fiat or otherwise) we can agree on, we can use STR, the cryptocurrency of the Stellar network. Unlike other currencies, STRs don't require trust or gateways. As the utility of the Stellar network grows, the value of STR increases.

by pbreit 12y ago

runeks 12y ago

In my view, Stellar is the "IP layer for credit" while Bitcoin is the "IP layer for money". Stellar doesn't actually transfer value (like Bitcoin), it only transfers IOUs, the settlement (actual value transfer) occurs outside the Stellar network. Stellar and Bitcoin achieve two different goals. Ripple can function as a decentralized exchange, while Bitcoin functions alongside USD, EUR, CNY for transferring value.

etchalon 12y ago
Of course, "credit" is how the modern banking system works. So an "IP layer for credit" is infinitely more valuable (if it works…which is a big if).
- runeks 12y ago
  > Of course, "credit" is how the modern banking system works. Correct. Ripple adds another layer on top of the traditional banking system. > So an "IP layer for credit" is infinitely more valuable (if it works…which is a big if). Well, Bitcoin can be credit as well, and can be interchanged with national currencies via Ripple. The two protocols complement each other, they don't compete. Just as the USD does not compete with Ripple (because it is a currency that can be traded on Ripple, just as bitcoins).

alwillis 12y ago

Stellar is a protocol for transacting in whatever currencies you want. The dollar isn't special; it's just another fiat currency. Everything in the Stellar network (except for the stellar cryptocurrency) is credit--an IOU. Which how all fiat currencies work anyway. If I owe you $50 and I write you a check for $50, you consider the debt paid, even though all I did was tell my bank to owe you the $50. When you deposit the check, the money doesn't move; the bank's ledger just gets updated. If there isn't a currency (fiat or otherwise) we can agree on, we can use STR, the cryptocurrency of the Stellar network. Unlike other currencies, STRs don't require trust or gateways. As the utility of the Stellar network grows, the value of STR increases.