New Toy: Ripple payments
I don’t think I’ve made it any secret on the web that I’m interested in cryptocurrencies - Paypal eats a substantial amount of our profit every month, and anything that has even a remote chance in the distant future to alleviate some of that is certainly interesting to me.
My problems with Bitcoin itself are simply that if you don’t buy into the entire quasi-libertarian ideals that just about go along with it these days, you’re just about guaranteed to have a bad time. We don’t publicize it, but MumbleDog would still happily accept BTC for Mumble servers if there was any demand - the problem is that the value doesn’t tend to stabilize for more than a couple weeks at a time, and when the value is rocketing up people just plain don’t seem to want to spend it. When the value is plummeting like a 747 with four dead engines, users’ first instinct isn’t to go shopping, it’s to go to MtGox and liquidate to try and catch the falling knife.
In short, the problem with BTC is that everyone who is interested in it, wants very much to be holding it (and for a variety of reasons, there’s no shortage of people who dislike it).
Ripple on the other hand looks interesting. Purely by virtue of my long-standing account on the BTC forums, I was lucky enough to be given some XRP (Ripple’s pseudo-currency) to start playing with, which you more or less only really need in order to establish trust in an exchange. As BTC is to open-source commodity, Ripple is open-source debt. At least, that’s my extremely naive understanding of it, which is proving problematic.
Learning to use Ripple is just about an exercise in frustration - I thought I understood the original RipplePay idea pretty well, but Ripple (as in dotcom) throws much of it out the window (including the idea of “social capital” which I quite liked). There’s no server software available yet - there’s an army of about three or four (that I can detect) Ripple servers that make up the entirety of the validation. All the “guides” on the Wiki with regards to a merchant accepting Ripple payments rely on you setting up a server, which you can’t get yet.
Stuck in the mold of thinking about RipplePay, I set up accounts for myself, MumbleDog, and my wife, and began playing with it. I thought you had to set up trust, which was problematic - MumbleDog doesn’t want to trust it’s users to pay their bills, that’s what the invoice payment period’s for. However, about 30 minutes ago it all clicked.
With the new Ripple, you don’t need to operate in IOUs between users if you both trust the same gateway. I sent my wife some XRP to play with, and set her up to trust Bitstamp for $X USD and X BTC. MumbleDog already trusts Bitstamp, and is set up to use it as an exchange.
I then, as her, click to send MumbleDog (using the URL generated by our billing portal’s development module) $0.10 USD, and Ripple handles the reconciliation of selling XRPs to USD for us. It seems as though if a user can find a local gateway that they can get any particular currency into the Ripple network and there’s a link of trust between their local gateway and our gateway(s), the user can send us USD with Ripple and any number of intermediaries handling the currency conversions.
We’re not quite ready to start accepting Ripple payments for Mumble servers just yet, but on the whole it’s a lot more attractive than Bitcoin. Back when we originally looked at implementing BTC, doing so securely was problematic so we put it on the back-burner. The uptake of BTC payments was so abysmally low we never bothered implementing it.
Ripple actually seems easier - it appears as though we can simply pick any of the public-facing servers and have a script watch for payments to our address - we don’t have to generate new addresses for each client, because that’s what the DestinationTag is for. All we have to do that’s risky is trust that there’s a gateway we can get actual cash out in some format, which hopefully as Ripple grows there will be at least one trustworthy gateway that we can use.