Jump to content

What is rippling in Gatehub


gforce

Recommended Posts

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.

Link to comment
Share on other sites

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 by Professor Hantzen
Link to comment
Share on other sites

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.

Link to comment
Share on other sites

  • 1 month later...
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?

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...