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Aesthetes: Art NFTs on the XRPL with Airdrop


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39 minutes ago, at3n said:

The rippling vulnerability is when you have two trustlines open for the same currency code but from two different issuers. If rippling is enabled, a third party can replace one of your currencies with the other without any interaction from you.

 

Thanks for explaining further. One your point above, what would be the use case in which someone wants to allow for the above in a trustless manner? It's like giving the password to your bank account to someone. I can see the use case for having multiple trust lines amongst individuals within a currency in order to allow Party A to transact with Party C through Party B. However, I can't see the use case for why you would want to allow someone to unilaterally swap holdings with you via a trustline.

Would someone be able to use this vulnerability to give you more ELS and take XRP in return without your validating the transaction? 

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56 minutes ago, Treehouse said:

Thanks for explaining further. One your point above, what would be the use case in which someone wants to allow for the above in a trustless manner? It's like giving the password to your bank account to someone. I can see the use case for having multiple trust lines amongst individuals within a currency in order to allow Party A to transact with Party C through Party B. However, I can't see the use case for why you would want to allow someone to unilaterally swap holdings with you via a trustline.

Would someone be able to use this vulnerability to give you more ELS and take XRP in return without your validating the transaction? 

This is how Ripple was designed to move all different types of money quickly and easily. The way it was envisioned was say that you've got USD.Citi and USD.Chase - two big banks that you trust the same. You don't really care which IOU you hold.

Now say Alice has to pay Bob $100, but Alice only has USD.Citi and Bob only accepts USD.Chase. If you have Rippling turned on, the payment can get routed through your wallet. Alice's 100 USD.Citi goes to your wallet and then 100 USD.Chase goes from your wallet to Bob's. This lets everyone hold the currencies they want and still pay everyone else in the currencies they want without having to go through the exchange and have slippage. This idea comes from Ryan Fugger's RipplePay and it's where Ripple gets it's name from.

I think the main problem was that rippling was enabled by default. Back in the day there were several fiat issuers but they had different liquidity and were valued directly. People didn't realize that if they trusted multiple dollar issuers for example the funds could slosh back and forth. And I think there were scams where someone would get you to make a trustline to their worthless USD and then use rippling to replace your good USD with theirs. I think the big fix Ripple did was to turn rippling off for a wallet by default and you have to explicitly enable it to allow it.

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To be honest, I don't know too much about the early concepts behind Ripple. I only started following around 2018 when it was deep into the strategy of trying to displace SWIFT. I guess that seemed like it had a window of opportunity at the time, but it seems to me that the unique focus on that goal basically stalled all other thinking about the XRPL. I'll reserve sharing further thoughts on Ripple the company, but the failure of that strategy seems to have finally opened the ground for some refreshed thinking about XRPL. I wonder if it will have to increase its TPS, however, given the newer players who can process in the tens of thousands, including some with almost instant finality.

But your above explanation is really interesting. Was the idea that Alice would be able to ripple the payment through my wallet without my active involvement? Or would I have to actively agree to help Alice and Bob as their intermediary?

 

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4 hours ago, Treehouse said:

I wonder if it will have to increase its TPS, however, given the newer players who can process in the tens of thousands, including some with almost instant finality.

This is a little bit like buying a hifi system on its stats alone.  Stats can lie.

Some of those high throughput systems actually failed when under load.  XRPL has been going strong for 650 million settlements.  It’s not anywhere near to close to being overloaded in any foreseeable short or medium term scenario.

If more grunt is ever needed there are already options available or being considered in the form of payment channels and federated side chains as well as hooks and other proposals. 
 

The very last thing (in my mind) for risks of this investment is ledger performance.

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6 hours ago, Treehouse said:

Was the idea that Alice would be able to ripple the payment through my wallet without my active involvement? Or would I have to actively agree to help Alice and Bob as their intermediary?

Originally, as rippling was enabled by default, I guess the intention was that no specific permission or interaction was needed for your account to become the intermediary for someone else's transaction.

In theory, it would all be ok as long as you stay on top of your trustline settings. If an issuer goes out of business, stop trusting them, and rippling would no longer work for that IOU. But in reality, people need a "set and forget" system that they don't need to constantly monitor.

So now that rippling is opt-in, by enabling rippling for a specific trustline you're actively agreeing to allow your account to be the middle-man for anyone's transactions through it. You're giving global permission, there's no way of locking that down to specifically Alive or Bob, and it will just happen when needed, and that's the intention.

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9 hours ago, Treehouse said:

To be honest, I don't know too much about the early concepts behind Ripple. I only started following around 2018 when it was deep into the strategy of trying to displace SWIFT. I guess that seemed like it had a window of opportunity at the time, but it seems to me that the unique focus on that goal basically stalled all other thinking about the XRPL. I'll reserve sharing further thoughts on Ripple the company, but the failure of that strategy seems to have finally opened the ground for some refreshed thinking about XRPL. I wonder if it will have to increase its TPS, however, given the newer players who can process in the tens of thousands, including some with almost instant finality.

But your above explanation is really interesting. Was the idea that Alice would be able to ripple the payment through my wallet without my active involvement? Or would I have to actively agree to help Alice and Bob as their intermediary?

 

If you have rippling enabled, the transactions happen automatically/passively. The XRPL's pathfinding mechanism will automatically make the payment ripple if it's available and the best path (it also checks the orderbooks).

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1 hour ago, LordAMV said:

Do you guys think this one is going somewhere (akin to the general sentiments about Flare)?

I don't know enough to form an opinion. But I'm willing to try out any project on the XRPL.

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Rippling means that USD.BankofAmerica is fungible with USD.JPMorgan

If you have an account at both (a Trustline) then you shouldn't care which account/TL your value is in.

However if JPM is under a Lehman Brothers type bank run, you want to reduce the limit to zero, or get rid of the TL.

---

I can't speak to the folks behind the project but my guess is that if they are smart enough to ignore the noise of the crowd and build on top of XRPL (for reasons), then they are off in the right direction. 

Edited by KarmaCoverage
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I suppose the rippling was initially a concept for how one might replace or at least supplement the existing banking system. It is quite similar to some of the financing networks that exist in other parts of the world built around middlemen who trust each other and therefore move money as opposed to using institutions. Quite different from the later Ripple corporate focus on replacing SWIFT. Seems pretty risky to sign yourself into a network which can run unknown transactions through your account not to mention all the other legal issues around AML and taxes. I would expect that the IRS in the United States would consider pass throughs as potentially taxable events if you receive one currency and send another. Tax rules just 

 

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1 hour ago, Treehouse said:

Seems pretty risky to sign yourself into a network which can run unknown transactions through your account not to mention all the other legal issues around AML and taxes. I would expect that the IRS in the United States would consider pass throughs as potentially taxable events if you receive one currency and send another.

I suppose that it provides a benefit to the network as a whole by making everything more liquid, providing more paths between different assets. So by having it enabled, users would be contributing to the operation of the network, which some people would likely see as any incentive to use it (especially in the old days).

But as you say, these days it does seem an outdated concept because of regulations and tax implications. Although using rippling alone, you would never receive a different currency than you sent (that would require an order/trade transaction). But there's really no reason for the average user to have it enabled now, and plenty of reasons not to.

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4 hours ago, Treehouse said:

It is quite similar to some of the financing networks that exist in other parts of the world built around middlemen who trust each other and therefore move money as opposed to using institutions.

You're talking about Hawala, and yes Rippling is functionally the same thing.

https://www.investopedia.com/terms/h/hawala.asp

https://www.treasury.gov/resource-center/terrorist-illicit-finance/documents/fincen-hawala-rpt.pdf

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2 hours ago, at3n said:

But as you say, these days it does seem an outdated concept

This is what Trustline is doing. 

https://docs.trustlines.network/docs/guides/tl_app_user_guide.html#creating-a-trustline

I think it's just a little more sophisticated of a feature than the crypto markets were ready for back in the day. @JoelKatz has repeatedly said it was one of his favorite things XRPL can do.

I agree with him, Rippling is at the core of the KarmaCoverage financial model. 

Edited by KarmaCoverage
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30 minutes ago, KarmaCoverage said:

Ooof... well, before some nervous Nellie (or Yellen) at Treasury reads this, the same concept exists and underpins almost all of banking, throughout history.  It's not some terrorist conspiracy, office guy - it is the same way (but less formal) that bankers always build "trust" with a client, by starting small, even from early days in the US.  The "informal" parts of it still exist in a lot of close-knit cultures (Hawaiians call it something like "Ohana", I believe?) and in underbanked countries. :)

(Stand Down, Rambo.)

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