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Max The Magnificent
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Micro-transactions
Max The Magnificent   8/11/2014 5:27:17 PM
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Will Ripple (and "ripples") support micro-transactions equivalent to fractions of a cent for use in purchasing things on the Internet?

Ariella
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Re: Micro-transactions
Ariella   8/11/2014 6:36:26 PM
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Max, yes, in fact they would require far less decimel division. As bitcoin is about $500 per coin, give or take, purchases usually have to made in fractions of the coin represented by decimels. But ripples, at least for now, have a much smaller valuation. 

Micro-transactions are one of the big advantages for digital currency because the current payment noncash options typically add on fees that are a disincetive for any transactions below a certain amount. Even physical retail establishments sometimes ask for a $10 minimum for credit card payments. 

anon2632018287
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Not the same thing
anon2632018287   8/11/2014 6:46:00 PM
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Bitcoin and Ripple are completely different things.  Bitcoin is a decentralized currency, payment system and commodity.  Ripple is a centralized system created by a company and they issue the currency.  If Ripple were to charge a transaction fee they would be regulated as a money transmitter.  Instead, they created Ripples which must be "destroyed" in order to facilitate a transaction on their platform.

Bitcoin has 8 decimal places so there is no issue with microtransactions as far as dividing a Bitcoin up into smaller denominations.

 

Ariella
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Re: Not the same thing
Ariella   8/11/2014 7:12:12 PM
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@anon Ripple positions itself as a complement to, rather than a competitor with, Bitcoin. In fact, the site has a page dedicated to Ripple for bitcoiners. Only fractions of ripples are destroyed as a safety measure. As per http://libertyblitzkrieg.com/2014/03/21/what-is-payment-protocol-ripple-and-how-does-it-allow-for-physically-backed-digital-gold-trading/ "There is also a certain amount of XRP that is destroyed with every transaction on the system. The amount is a negligible .00001 XRP (a extraordinarily tiny fraction of a penny), and is used to prevent spam transactions from clogging the protocol. As such, each wallet on Ripple needs to have a minuscule XRP reserve balance of 20, which" at the time of that writing was jut a bit over a quarter. 

anon2632018287
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Re: Not the same thing
anon2632018287   8/11/2014 7:31:44 PM
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Bitcoin is decentralized, Ripple is decentralized and issued by OpenCoin, Inc.  OpenCoin, inc. is funded by the sales/appreciation of Ripple.  Some people have tried to cloud the waters and have tried to compare centralized systems or "backed" currencies with decentralized systems like Bitcoin.  Apples and oranges.

Ariella
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Re: Not the same thing
Ariella   8/11/2014 9:41:45 PM
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@anon I'm not quite sure what you're getting at in declaring both to be decentralized. Both ripple and bitcoin are considered to be math-based currencies  -- not "backed" -- and the same holds true for a number of currencies that attempted to copy bitcoin.  Open Coin was the original name of the company that launched Ripple, though the name was changed to Ripple Labs at the end of September 2013 just over 3 weeks after after I published an article on digital currency on CFO.com

anon2632018287
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Re: Not the same thing
anon2632018287   8/11/2014 10:12:46 PM
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"Math-based" currency is just some general term that menas you use math.  Decentralized means no enity is in control and that there is a consensus achieved in a decentralized manner.  Ripple is a centralized system issues by OpenCoin, Inc.  People use buzzwords like "math-based" currencies to confuse people over the difference between a centralized currency like Ripple, Amazon Coin, Fluz, etc. and decentralized currencies like Bitcoin, Litecoin, etc.  Decentralized currencies depend on "mining" to achieve the consensus while centrilized systems depend on some singular entity.  If you don't understand the difference then DON'T INVEST.

"Backed" usually means you have some something left over if the value of the currency goes to zero.  Currencies like Bitcoin, Ripple, and US Dollar are not backed if that is the dedinition you use.  Some people say US Dollar is backed by the US Government, Bitcoin is backed by the faith of their users.  If that is the definition you use then Ripple is backed by OpenCoin, Inc. since they issue Ripple and the value of Riupple depends on OpenCoin, Inc. operatinging their trading platform.

Ariella
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Re: Not the same thing
Ariella   8/12/2014 9:45:35 AM
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@anon I gather you're one of the bitcoiners who view Ripple with suspicion. I've seen a lot of posts to that effect as I used to write for CoinDesk.  In truth ripples are only going to be worth what people are willing to pay for them. There is no intrinsic value to any of these currencies. Bitcoin started out with a value of just pennies and took about a year just to reach the dollar mark. Then it climbed, fell, climbed, fell, etc. Just as for stocks, or some may even say tulips, the values are all about perception. The volatility is actually bad for bitcoin's adoption as a currency for mass adoption. That's one of the issues I addressed in the CFO piece based on interviews with bitcoin enthusiasts who found that people just weren't ready to take their pay in digital currency because it was too much like gambling.

 

anon2632018287
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Re: Not the same thing
anon2632018287   8/12/2014 10:40:24 AM
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The truth is Bitcoin is decentralized and Ripple is not.  The risks associated with each are completly different.  You want to divert attanetion away from this fact with a bunch of buzzwords.  they are both experimental and risky for different reasons.

Nick_S
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Re: Not the same thing
Nick_S   8/12/2014 12:47:34 PM
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@Anon, the Ripple protocol is designed to be decentralized, just like bitcoin. What you're referring to is the currency distribution. The reason the coins are premined is because Ripple works via consensus, rather than requiring mining. There is no mining, therefore coins can't be mined.

One of the main advantages to consensus is speed. Transactions can be confirmed in just a few seconds.

anon2632018287
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Re: Not the same thing
anon2632018287   8/12/2014 12:59:25 PM
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Bitcoin is decentralized.  Ripple fully depends on OpenCoin, Inc.  If you are investing you are investing in two entirly different things and two entireley different concepts.  The key here is the coins can't be mined in some agreed upon fashion, they must be issued by OpenCoin, Inc.  Ripple is closer to investing in a stock rather than a decentrailized currency.  There is no decentralized concensus with Ripple because there is no way to achieve that concensus.

 

Bitcoin is an experiment in a decentralized consensus.  It is funny to see people say its flaw is that there is no overlord or central authority.  When you analyze these currency systems the thing to look for is a decentralized consensus mechanism such as mining.  If that does not exist then you have a centralized system.  If it is "backed" by something then you also have a centralized system because some entity controls the assets.  These types of things are not like Bitcoin, litecoin, etc.  Not that everything centralized is bad, it is just not the same thing.

Nick_S
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Re: Not the same thing
Nick_S   8/12/2014 1:14:16 PM
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@Anon,
You're really mudding well established terms. Bitcoin uses proof of work. Ripple uses consensus. Maybe the following post would help you:
http://bitcoin.stackexchange.com/questions/10180/what-are-the-pros-and-cons-of-ripples-consensus-as-compared-with-bitcoins-proo




Ariella
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Re: Not the same thing
Ariella   8/12/2014 3:26:17 PM
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After I shared my post on G+, my one of my connections commented thus, "Ripple is also the easiest way I've ever seen to send and receive Bitcoin, and then change it for US dollars, and send it to a bank account." That's really what the system is acout, making it easy to clear transactions, no matter what currency you start out with. 

anon2632018287
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Re: Not the same thing
anon2632018287   8/12/2014 7:22:42 PM
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That may be correct, but Ripple is a centralized system and any investment depends fully on OpenCoin, Inc.  this has nothing to do with a decentralized currency like Bitcoin other than you can use Ripple to trade Bitcoin along with other currencies.

anon2632018287
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Re: Not the same thing
anon2632018287   8/12/2014 7:18:53 PM
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Bitcoin uses proof of work to achieve a decentralized concensus.  Ripple is a centralized system that depends on a central authority, like Paypal.  Many scammers are trying to confuse people because many people don't understand the decentralizion nature of Bitcoin and how it works.   You may note one of the Ripple Board members just resigned over the way they are distributing Ripple.  The system is doomed to fail because they are really money transmitters taking a fee but they do this big song and dance to try to claim it is something else.

The issue is a "decentralized consensus."  Terms like "math based currencies" and "consensus," when used with Ripple have no other purpose than to try to confuse people.  OpenCoin, Inc. stops operating, then your Ripples (and the associted platform) are useless just as if you bought OpenCoin, Inc. stock.

One of the Bitcoin Foundation board members, Brock Pierce, is also trying to confuse people by claiming to start a Bitcoin competitor that is "backed."  This is another case of trying to confuse people because you cannot have a "backed" currency that is decentralized because some entity has to control the assets.  There are many people trying to create centralized systems and they are trying to confuse people since many don't understand how a decentralized consensus works. 

Ariella
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Re: Not the same thing
Ariella   8/12/2014 7:34:54 PM
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@anon I wouldn't say it operates the way PayPal does. Ripple doesn't collect a fee the way PayPal, banks, and credit cards do for transactions. Whatever fees are incurred would be the ones added on by exchange services, which also add on fees for bitcoin transactions. 

Ripple  declares https://ripple.com/protocol that it is intended to be open-source software that "is not owned or controlled by any person or organization." Last year I spoke with Patrick Griffin, Head of Business Development for Ripple Labs (formerly OpenCoin).  He insisted that Ripple is a "public good" not owned by the company. He compared the Ripple protocol and Open Coin to Red Hat and Linux.

In our phone interview, Griffin explained that commerce has not kept up to speed with the flow of information because the rails of payment were put in place in decades before the internet.  Ripple's system is designed to bring that world into the 21st century by wiring it together in the same way the internet allows seamless global communication.  As the system is "currency agnostic and protocol agnostic," it can be used for any form of currency – including bitcoin -- in any part of the world where there is an internet connection.  

 

Whereas some bitcoiners feel threatened by another digital currency encroaching on their territory, Griffin said that Ripple can actually enhance bitcoin's usefulness by making it easier to use through its universal protocol.  "A currency that is not very liquid and very transactional more volatile," he said. Promoting its use by making it easier to spend will make it more stable.

 

 

anon2632018287
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Re: Not the same thing
anon2632018287   8/12/2014 7:56:52 PM
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Akll you do is post a bunch of nonsense and buzzwords.  Ripple is not a "decentralized concensus."  Ripple is collecting a transaction fee by issuing the currency, distriobuting it, and "destroying" Ripples with each transaction.  OpenCoin readily admit the point of Ripple currency is to fund their company and it is well known that it was developed in order to try to avoid money transmiotter regs.  Destroying Ripples is a transactiopn fee and it is a metter of time before the Ripple platform is regulated as money transmitters because that is what they are.  They are facilitating transactions and charging a fee like every ofther currency exchanger.  That is why Ripple was developed, to try to avoid regulation of money transmitters and they use a bunch of buzzwords associated with Bitcoin to try to confuse people about what is really going on.  some people think they can avoid regulation by trying to confuse everyone about what is really going on since the concepts are not well understood by the general population.

I havn't mentioned it in this thread but a portion of the Ripple system means you have to trust certain other users or gateways.  it is a complicated system and it is a kluge in an attempt to avoid the money transmitter thing.  Ripple is a great centralized platform to trade currencies but it can't avoid the money transmitter issue forever.

phil-
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Re: Not the same thing
phil-   8/13/2014 10:38:35 AM
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Hi - employee of Ripple Labs here.  Ripple is a backend payment protocol for financial instutitions.    Using Ripple does not exempt the FI from the licenses and regulations that are required in its jurisdiction.   Nor is Ripple intended to circumvent any regulations.

Financial institutions that integrate continue to do KYC (know your customer) and AML (anti-money laundering) screening, as they always have been required to do.  If money transmission is involved, they must have a license to do that.  

The goal of Ripple is to provide realtime settlement, for virtually zero cost, with competitive foreign exchange pricing.  The existing system is antiquated, slow, and expensive... built on pre-internet architecture.

 Investors like Google Ventures, Andreesen Horowitz, and other prominent VCs have invested in Ripple Labs.  You are correct that Ripple Labs relies on holding XRP as an asset to fund some business operations (and maybe/hopefully make a profit).  

Ripple Labs does *not* collect any transaction fees, as you state.  Nor does it limit anyone's access to the network in any way whatsoever.  The Ripple network is open source, neutral, and free for anyone to use.  

 

anon2632018287
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Re: Not the same thing
anon2632018287   8/13/2014 12:31:56 PM
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If you talk to people who have been involved for years, such as Bitcoin developer Mike Hearn, they say the entire purpose of the Ripple (well before there were any employees) concept was to avoid the money transmitter issue.  No matter how you dice it and slice it, destroying Ripples to facilitate a transaction is a transaction fee.  It remains to seen how regulators will view it in the long run.

 

Ariella
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Re: Not the same thing
Ariella   8/17/2014 11:36:45 AM
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@Phil Hi, thanks for confirming that information. 

JoelKatz
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Re: Not the same thing
JoelKatz   8/24/2014 6:00:52 AM
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There is one big difference, anon. If the Bitcoin system breaks or fails, your Bitcoins are gone. And all you can have on the Bitcoin system are Bitcoins. If the Ripple system breaks or fails, your funds are still held by the gateways you chose to hold them and they still owe those funds to you. The Bitcoin system is the custodian of all the assets it handles, the Ripple system is not.

anon2632018287
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Re: Not the same thing
anon2632018287   8/24/2014 6:58:41 AM
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Right, that is what I have been saying alkl along.  Ripple is centralized and Bitcoin is not.  That is not a value judgement, just a fact.

Ariella
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Re: Not the same thing
Ariella   8/28/2014 8:50:01 AM
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@anon Bitcoin's reliance on 51% control of the Blockchain opens it up to full control and vulnerability. And some say that has happened with GHash.  See  http://hackingdistributed.com/p/2014/06/13/in-ghash-bitcoin-trusts/#sthash.nwdzbBnp.dpuf

The main pillar of the Bitcoin narrative was decentralized trust. That narrative has now collapsed. If you're going to trust GHash, you might as well store an account balance on a GHash server and do away with the rest of Bitcoin -- we'd all save a lot of energy. This is a big deal, and it would be a mistake to downplay it in the hope to buoy Bitcoin prices. It will be difficult to attract new people to Bitcoin when it's controlled or controlable by a single entity. If those people were willing to trust a single entity, they could have dodged inflation by putting their fiat into World of Warcraft or subway tokens. They came to Bitcoin because it was decentralized, and now it isn't. The first step is to admit that we have a problem. 

anon2632018287
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Re: Not the same thing
anon2632018287   8/28/2014 9:45:56 AM
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yes, Bitcoin is an experiment in decentralization.  Like most systems, Ripple started out with an entity having full control. 

a 51% attack does not mean "full control" and no enity had 51% control.  They have a pool where a bunch of people switched to a different pool once they saw the potential for bad things to happen.That is how an incentivised decentralized system works.  the links and quotes you point to are hyperbole written by someone who doesn't understand how the system works.

We had the same kind of hyperbole last year when Dan Kamisky said that one entity controls the majority of mining hardware and he predicted Bitcoin would collapse or at lease change the "proof of work" system by the end on 2013.  Bitcoin is full of people making hyperbolic claims to get publicity or do pump and dump schemes.

Simon7382
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It may lead to unexpected improvements
Simon7382   8/12/2014 8:41:45 PM
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This thing is somewhat better than Bitcoin but I would still not trust it with my money. However, its appearance may force the banks to finally stop ripping off their clients with totally unjustified super high transaction fees and also may force them to complete the transactions in minutes instead of sitting on our money for a week collecting short term interest on it (which belongs NOT to the banks but to us the customers).

Ariella
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Re: It may lead to unexpected improvements
Ariella   8/12/2014 8:47:28 PM
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@Simon7382 As I said, one of my acquaintances has used it and is quite happy with it. I don't have any first-hand experience myself. However, I have had first-hand experiences attempting to get paid by a business located overseas. No matter whether they use PayPal or a bank (I've tried it both ways)  the fees are substantial and collected both from payers and payees for foreign currency. On top of that wire transfer fee, or PayPal fee, additional time of up to 3 business days is tacked onto regular clearing time for the funds to actually appear in the account.  

Simon7382
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Re: It may lead to unexpected improvements
Simon7382   8/12/2014 8:53:56 PM
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Svereal business days? You are lucky. In my experience it takes about a week. Even if the money is wired (for a fee abouit $30, no matter of the wired amount) it takes 2-3 days to clear instead of what it should take, which is 2 minutes or less. As I said, the financial institutions have been ripping us off because they can.

Ariella
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Re: It may lead to unexpected improvements
Ariella   8/12/2014 9:08:22 PM
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@Simon7382 I beieve it took about 4 business days, which does come close to a week. Bank fees range from $15 to $40 for the recipients and a similar fee for the sender, whereas PayPal imposes a fee that rises in proportion to the amount. In contrast, Ripple is designed to clear transactions in just seconds without imposing such fees. For businesses that regularly have to pay or receive payments from people in other countries the savings and cash flow benefits could really add up.. 

Simon7382
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Re: It may lead to unexpected improvements
Simon7382   8/17/2014 3:23:27 AM
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I agree, that based on what I read here it seems cheaper and faster. But why would anyone trust his/her money on the unknown people who run this business? You do not know them they can just pull up their tent one day and dissapear with everyone's money. US and European banks are substantial large organizations whith FDIC backing. Hence, while they are VERY slow and VERY expensive, at least your money is safe with them. The best outcome for average people and businesses here is that this new competition will force banks to become reasonable with both their fees and their execution speed. In fact some smaller banks have been moving into this direction. My bank has sped up transfer times a LOT during the past couple of years, from many days to a single day. The wiring fees are still very high at $30.

Ariella
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Re: It may lead to unexpected improvements
Ariella   8/17/2014 11:35:35 AM
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@Simon Ripple is working with banks, so that may give you the best of both worlds. As for FDIC, that does protect your deposits, but from my experience it does not protect you from bad checks. If someone bounces a check on you, you also have to pay a fee, and that can go as high as $30, too. So there is always some element of trust in any financial transaction. 

JoelKatz
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Re: It may lead to unexpected improvements
JoelKatz   8/24/2014 5:58:03 AM
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(I am one of the original architects of Ripple and am an employee of Ripple Labs, speaking only for myself.)

Simon: You don't trust Ripple with your money, that's not how Ripple works. Ripple basically just atomically moves funds from one place to another. At no time does the Ripple system have custody of the funds.

The way Ripple works is that some entity you trust that you choose holds your money. Ripple permits you to easily direct that entity to pay your funds to whomever you choose. If Ripple somehow fails or ceases operation, then perhaps you can't make payments. But the entity you trusted is still holding your money and still owes it to you.

 



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