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RE: How Steemit could learn from Ripple's funding strategy
How to be Ripple:
- Make a huge premine (make sure to promise to spread it out the community --- but don't really do that)
- Own the nodes so the network isn't really decentralized.
- Make sure your creator splits and sue them so they can't sell their Ripple when they want.
- Get in bed with banks.
- Win.
There is no "XRP premine", XRP doesn't need to be "mined". 100% of XRP already existed at the creation of the protocol and actually the total amount decreases with each input in the ledger that's why the current total amount is 99,997,191,762.49 XRP and drecreasing in real time, you can check it here: ripple charts.
Regarding the "nodes" you can install your own node, the node server is rippled. But once again, there is no "mining", so unless you want to start a gateway or have any other reason to be part of the infrastructure of the netwok you wont get any reward for just burning electricity.
Ripple doesn't follow Bitcoin "guidelines" and it's ok that it doesn't follow them, it's another concept of implementing a cryptocoin. It's not an "altcoin".
Regarding the "creator" the compromise of not wild selling was way before his departure, it was an agreement. Just like you can't sell all of the STEEM and there is the SP concept. It is unfair to call Jed the sole "creator", the Ripple concept evolved from Ryan Fugger, who passed the torch to Open Coin because he wanted the Ripple concept to evolve taking advantage of the cryptographic technology.
The origins of Ripple can be traced back by 12 years and a half, check: Ripplepay.com
OK, replace "premine" with "create a bunch of ripple out of thin air".
Replace "own the nodes" with "make there be no incentive for anyone other than you and possibly the banks you onboard to run nodes so you can control the network".
Whatever the nitty gritty details are they did sue one of the creators for selling Ripples http://www.coindesk.com/ripple-jed-mccaleb-settle-suit-over-1-million-in-disputed-funds/
And finally, they just can't wait to get in bed with Banks, so they're getting large sums of cash.
The crypto community is supposed to be happy about this - especially given their track record so far?
It takes a lot to get me to speak out against a crypto project, but Ripple has worked really hard so they've earned it.
p.s. Sure, you can become a node, but they will most likely ignore you. See https://www.reddit.com/r/Ripple/comments/4eo1le/can_i_become_a_node_in_the_ripple_network_as_an/ple.com
"Anyone can set up a validator ... This does not mean that the other validators will trust your validator though. Other validators are more likely to trust your validator if you a) release your identity and b) show consistent uptimes and good consensus over time. If you're a large organization it helps too."
Hello big banks, welcome to our decentralized network. Feel free to, you know, sit on the couch, hang out, and in general take over the place.
It's not the same as "premine". They created a protocol and XRP is the token of that protocol. There is no place for the "industry of token miners" on that protocol and there is nothing wrong with that.......except for wannabe miners of that token. Because for the consensus protocol there is no value in "creating" the token. There is no point in wasting computer cycles on the token of a consensus protocol.
But it's not only the "miners" who "hate" Ripple because they are not needed. Actually miners just ignore XRP and do their thing on tokens that need mining.
The actual "hate center" against Ripple came historically from centralized exchanges, because the consensus protocol turns those exchanges obsolete in a way. Ripple is an exchange protocol and has it's own token (XRP) and that created a conflict of interests.
People who "hates Ripple" then end up exchanging BTC for USD on a closed private ledger from centralized exchanges. It's clearly a worst option than an open ledger. That is the gap that the Ripple protocol closed on the early days making special interests on that matter really angry.
Also the main argument some years ago was that Open Coin intendend a simple pump&dump scam of the token and then vanish away. That never happened, reality proved the contrary happened. They don't stop raising actual capital instead of dumping. So they are incorporating value into the crypto-scene being the contrary as dumping for $$$.
Ripple didn't sue Jed for "selling Ripple", he was sued for not honoring an agreement*. It's like if one of the Steemit creators could manage to avoid the SP system and sell 100% of his STEEM without having to "power down". Agreements should be honored no matter if they are programed as part of the protocol or not. And regarding the going in bed with banks, Stellar is in "bed" with Deloitte, so basically following the same route at a minor scale.
I don't tend to analyse things in terms of colective thinking. Each individual should think for himself. You are free to dislike or even hate the ripple protocol and some other users may be also free to praise ripple over swift.
Anyway back to the "pump&dump" danger and to the point of this article. The point is precisely how to implement a strategy that makes Steemit Inc. less dependable of the value of STEEM for capital expenditure. It's not the same if your only income is from selling tokens on the market (STEEM) than if you fund your operations by incorporating capital in exchange of actual shares.
The fact that Steem Inc. exists leaves per se open the door to that posibility. And I think that producing a multilingual frontend for steemit.com and launching a traditional funding round for Steemit Inc. could be both extremely benefical for Steem as a whole.
It's just my point of view, my 0.02 SBD :P
For the record, I used to like Ripple. I didn't listen to the haters. It was through experience and years of being in the crypto space that I came to my current view of them. I had worked on apps for Ripple, tried to use it as an exchange, tried to do all of the things they claim one can do with it, etc. I don't care about earning money through "mining" it or anything - but the fact that there is no incentive for at least somewhat decentralized nodes/miners/witnesses/whatever is not good in my book. I believe Ripple will do what they want, as all companies do. Banks will do what they want. I'm experienced enough to know that this can't be "stopped" and so I don't actually "hate" the Ripple protocol or anything like that. BUT, there are a lot of newbies who will see that Ripple is the #3 coin by market cap, see the price spike, and plunk their earnings into XRP, etc. If no one in the crypto community speaks their mind on Ripple, then people won't be aware that there are (or depending on your perspective, are not) issues.
That being said, I do apologize for posting a negative comment on your article and next time I plan to publish my own article with an opinion instead of going all haty on yours.
Cheers.
@nonlinearone there is no need to apologize for having a different point of view. Anyway the point of my article is about a funding strategy I honestly think will do well for steemit.
Regarding JED if XRP would have be enforced by software in the form of "XRP Power" he wouldn't have make fun of the first lock-up agreement he did not honor or had to settle through court a new lock-up agreement.
Actually I suspect @dantheman was aware of that Ripple episode when he designed the Steem + Steem Power system.
Respects