What is rippling in Gatehub

[gforce]

Hi all im new here been watching from the sidelines for several months can someone explain to me whats the rippling feature in gatehub accounts i had it on to just test it basically it moved around my balance between the different trustlines and maintained the same balance nothing was added or substracted is this just to make things more liquid in the market place.

[Professor Hantzen]

2 hours ago, gforce said:

Hi all im new here been watching from the sidelines for several months can someone explain to me whats the rippling feature in gatehub accounts i had it on to just test it basically it moved around my balance between the different trustlines and maintained the same balance nothing was added or substracted is this just to make things more liquid in the market place.

I wouldn't enable it unless you absolutely knew exactly what you were doing and had a specific reason for doing so.  You can lose funds by having a higher value version of your holdings substituted for a lower value version, or even an almost worthless version.

For example, snapswap/btc2ripple was once a popular and trustworthy gateway.  It issued BTC IOU's that were fully-backed by real BTC.  I don't know the story behind what happened, but at some point it shuttered its doors/went out of business - I'm not sure.  I believe this was announced in advance, and most people redeemed their BTC prior to it closing.  However, anyone who didn't are now in possession of BTC IOU's that are worth a fraction of their real value.  If you have rippling enabled on a gatehubfifth BTC trustline for example, and a trustline open to snapswap for BTC, you may one day discover your valuable gatehubfifth BTC substituted for nearly worthless snapswap BTC.

A more in-depth (and official) explanation of rippling is here.

Edited April 3, 2017 by Professor Hantzen

[gforce]

ohhhh ok thks

[JoelKatz]

You are contributing to making assets more liquid for everyone else. So long as you don't set a non-zero limit on any trust line for an asset that's worth less than its face value, you won't really be harmed. The problem is, if any gateway you trust ever becomes illiquid or defunct, you will rapidly find that people force you to take as much of that asset as you will accept and give you the asset issued by the failing/illiquid gateway. This is why we can't have nice things.

Unfortunately, the recommendation is that you should disable rippling on every trust line you have to a gateway unless you know exactly what you're doing and are willing take some risk to be a nice guy to everyone else.

[gforce]

thks i did my good deed for the day between gatehub bitstamp usd enjoy folks

[Professor Hantzen]

20 minutes ago, JoelKatz said:

This is why we can't have nice things.

Lol'd hard.

[Hodor]

3 hours ago, Professor Hantzen said:

Lol'd hard.

Same - nice summary statement!

[gallomatteo]

On 4/3/2017 at 4:12 PM, JoelKatz said:

You are contributing to making assets more liquid for everyone else. So long as you don't set a non-zero limit on any trust line for an asset that's worth less than its face value, you won't really be harmed. The problem is, if any gateway you trust ever becomes illiquid or defunct, you will rapidly find that people force you to take as much of that asset as you will accept and give you the asset issued by the failing/illiquid gateway. This is why we can't have nice things.

Unfortunately, the recommendation is that you should disable rippling on every trust line you have to a gateway unless you know exactly what you're doing and are willing take some risk to be a nice guy to everyone else.

@JoelKatz - am I right in thinking though that is say Gatehub USD are expensive to all my other USD trust line that rippling won't have an effect as no one would give Gatehub USD for my cheaper Bitstamp USD? 

If that is the case though, is there any advantage to be gained from rippling ever?