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New Video Explaining Xrp as a Scam

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I see lots of members bashing the presenters, but not addressing any points they raised, which is disappointing. I think they just re-covered most of the points of Peter's R3 paper. Tone Vays mentioned he wouldn't trust Ripple because Jed was once at the helm.

Summing up, the main arguments seemed to be:

  • There is no code or automated process that handles forks if consensus is not reached, and the network does have to split. If there is a fork, the losing side has to discard transactions or history possibly resulting in a double spend. There is no inbuilt mechanism or financial incentive to correct the network in case of a fork.
  • No incentive for node operators to perform public validations. Performing public validations can lead to lawsuits for negligence or potentially aiding financial crimes. Safest option is to outsource that legal liability onto ripple labs: which centralizes the network. 
  • Global consensus means that nodes must hold unrelated third party transaction data, which is too risky: e.g storing Iranian payments during sanctions.
  • No VM layer like Ethereum, everything has to be written into rippled. Changes to ripple frequently require changes to the core consensus code. Many amendments are hard forks of ripple: eg with Flow if some nodes decide not to implement it, they are no longer part of the network.
  • No secure way to download the software: "ripple labs team are not very competent ". An attacker can steal the secret keys for the ripple validators and compromise the whole network. Also if the ripple website is compromised the UNL list can be replaced in the software.
  • Ripple is aware of all these shortcomings and has shifted mostly now to Interledger.

Also Peter seemed under the impression that R3 was in the market to buy Ripple at some earlier point.

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Guest Haydentiff
49 minutes ago, karlos said:

I see lots of members bashing the presenters, but not addressing any points they raised, which is disappointing.

+100

49 minutes ago, karlos said:

No secure way to download the software: "

This is no longer an issue. GitHub repos have signed commits at the tip. RPM packages are signed by Ripple's GPG key.

Quote

No incentive for node operators to perform public validations. Performing public validations can lead to lawsuits for negligence or potentially aiding financial crimes. Safest option is to outsource that legal liability onto ripple labs: which centralizes the network. 

I think this along with most of the validator issues brought up toward the end of the video are valid concerns.

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49 minutes ago, karlos said:

Summing up, the main arguments seemed to be:

  • Jed is not a character to be trusted because of happenings in MtGox and transitively Ripple cannot be trusted as well (first 1/3 of video was basically about this)

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1 minute ago, Haydentiff said:

This is no longer an issue. GitHub repos have signed commits at the tip. RPM packages are signed by Ripple's GPG key.

They are still not in any major distro's repository despite being free and open source software for years and have not taken any steps towards this. If you have to compile locally, you open yourself up to all kinds of attack surfaces and issues , on the other hand only having binary packages is also not great...

I wouldn't say not offering packages other than RPMs makes them "not very competent", but it shows a certain neglect of existing ecosystems and end user needs.

 

By the way, I agree with all main arguments that Karlos mentioned in her/his post (trust issues because of Jed aside), I'm not 100% sure about the forking issue, since consensus is designed to either have one single global next state or to fail, while for PoW coins every new block is a potential fork that first needs to convince others to be worthy of building upon it.

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1 hour ago, karlos said:

I see lots of members bashing the presenters, but not addressing any points they raised, which is disappointing. I think they just re-covered most of the points of Peter's R3 paper. Tone Vays mentioned he wouldn't trust Ripple because Jed was once at the helm.

Summing up, the main arguments seemed to be:

  • There is no code or automated process that handles forks if consensus is not reached, and the network does have to split. If there is a fork, the losing side has to discard transactions or history possibly resulting in a double spend. There is no inbuilt mechanism or financial incentive to correct the network in case of a fork.
  • No incentive for node operators to perform public validations. Performing public validations can lead to lawsuits for negligence or potentially aiding financial crimes. Safest option is to outsource that legal liability onto ripple labs: which centralizes the network. 
  • Global consensus means that nodes must hold unrelated third party transaction data, which is too risky: e.g storing Iranian payments during sanctions.
  • No VM layer like Ethereum, everything has to be written into rippled. Changes to ripple frequently require changes to the core consensus code. Many amendments are hard forks of ripple: eg with Flow if some nodes decide not to implement it, they are no longer part of the network.
  • No secure way to download the software: "ripple labs team are not very competent ". An attacker can steal the secret keys for the ripple validators and compromise the whole network. Also if the ripple website is compromised the UNL list can be replaced in the software.
  • Ripple is aware of all these shortcomings and has shifted mostly now to Interledger.

Also Peter seemed under the impression that R3 was in the market to buy Ripple at some earlier point.

I decided that 1 1/2 hours of Peter Todd is too much self flagellation but those are indeed some valid concerns. Thanks for the summary! 

Point 2 and 3 are probably the reason why the network is 100% centralized right now. No reliable entity wants to take the risks. Microsoft probably didn't verify their validator because they could end up in someones UNL if they do. Not even NBAD wants to run one. That's the big advantage of randomized validation like PoW and PoS: nobody and everyone is responsible. 

Edited by xtrapower

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1 hour ago, karlos said:

I see lots of members bashing the presenters, but not addressing any points they raised, which is disappointing.

The main point they raised was just "Ripple is a scam". To hear such a "statement" from a Bitcoin core developer makes you think..... And as far as I know, "being a scam" is not a technical issue

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Thanks for the summary @karlos. I agree with you about debating their concerns about Ripple/XRP. 

But let's be fair, the video is called CRYPTOSCAM: RIPPLE! 

(Just seen 10-15 min)

The other guy just says he didn't like Ripple because he didn't although he doesn't understands it.  And that he took one day to read some things about it and that it screams scam all over. And that jed was involved with Ripple and because of mtgox Ripple cannot be trusted and is enough to be called a scam and people should stay away from everything related to it. 

So, I guess it's fair to say that this video doesn't have the best intention in the first place.

of course the points that they addressed about the tech should be discussed. Fortunately we have people in this forum that can do it like sukrim, jk and nikb. Thanks for that. 

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Guest Haydentiff
1 hour ago, JoelKatz said:

If he means some kind of permanent loss of servers or connectivity, then it's true, one or both sides won't see fully-validated ledgers. Either someone cares about this issue or nobody cares. If nobody cares, why are they even running the software? If people care, then they'll have an incentive to adjust the UNLs to fix it.

He gave a scenario where there are nodes on one side of the country and nodes on the other. If a cable breaks, then each side doesn't have the same information and a clique can become disjointed. One side can reach a different consensus than the other. He also said something about firewalls causing problems. I replied to him on Twitter and said (re: UNL cliques) that consensus would halt if a cable broke. And a firewall means that you can't join the network as a node. Peter replied that that was incorrect because of a fundamental limitation in the consensus model. So then I replied that the drop off from a broken cable would be such that the clique couldn't reach consensus, so they'd not advance the ledger. He hasn't replied.

1 hour ago, JoelKatz said:

Bitcoin has the same problem with running full servers

Bitcoin miners are anonymous and receive incentives for mining. Peter suggests that with Ripple, running a public validator could expose you to the risk of a lawsuit for negligence in aiding a financial crime. There is no incentive to take that risk and you can pass it off to Ripple.

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