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Debasish

OfferCreate Transactions in Ripple

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1. A transaction that creates a trading offer.

2. By anyone. I don't think there's any transaction type that is exclusive to gateways (also every account can be a gateway anyways, so this distinction doesn't make much sense).

Edited by Sukrim

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The XRP Ledger is a decentralised exchange (perhaps the first).  An account that is "submitting an OfferCreate transaction" on the XRP Ledger (eg, to trade XRP for BTC) is analogous to an account on a centralised exchange - such as Kraken or Coinbase Pro, for example - that is "placing a trade" (eg, to buy XRP/BTC).  Typically, any account can make such an offer on either type of exchange.  You can see some of the various "trading pairs" available on the XRP Ledger's decentralised exchange by visiting http://xrpcharts.com

The difference is mainly that on a centralised exchange, the issuer of the BTC being sold is the BTC network itself, which is then held on an accounts behalf by the exchange.  On the XRP Ledger, the BTC is an "IOU" - effectively a "promise", that can be issued by any other account on the XRP Ledger.  This is very similar to the situation with a centralised exchange and they could be seen as the same thing.  An IOU is a "promise to pay BTC", and clearly one needs to be able to trust the party who makes them this promise.  Some issuers can be considered as trustworthy as an exchange, because they may actually be a centralised exchange.  For example, the centralised exchange "Bitstamp" issues IOU's for BTC on the XRP Ledger.  Some issuers on the other hand could be considered as trustworthy as a random stranger standing on a street corner saying "give me your BTC and I'll give you a piece of paper saying I owe it to you, and I'll give your BTC back to you whenever you ask - I promise!".  That is what is meant by "every account can be a gateway".  That is, every account (ie, anyone in the world) can issue IOU's for anything on the XRP Ledger.  So you have to be sure you can trust some gateway before accepting their IOU's and handing over XRP for them.  To be perfectly clear, this means:

DON'T just submit an OfferCreate transaction that would exchange your XRP for someone else's IOU for anything.  It may be a completely worthless IOU.

DO research carefully the issuer of an IOU on the XRP Ledger, and examine its orderbook.  Only consider trading your XRP for an IOU if the issuer is well-known, and you feel you would trust them with your assets, and the orderbook on the XRP Ledger has a healthy number of offers amount of volume on both sides of the orderbook on the XRP Ledger, and it trades regularly, with tight spreads (not much difference in price between the bid and the ask).

XRP is issued by the XRP Ledger itself, and requires no trust in any other party than in the XRP Ledger itself, to hold or receive.  But if you send it to another account, that account now has that XRP unless they choose to send it back to you.  The same goes for "offering" your XRP via "OfferCreate".  You will effectively be sending your XRP away to someone, and while they may give you an "IOU" (a piece of paper) in return, that may make the claim to give you some BTC at some point - it's entirely down to their trustworthiness whether they actually will.

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