This seems like it would have a serious early-adopter problem, in that it needs a pretty large network of people that somewhat know each other in order for things to work. Specifically, if I join this service, I can't do anything until someone who knows me joins, at which point we can then lend money to each other. If a bunch of my friends join, then we have our own small complete social graph - but we can't access the greater community until one of us is friends with someone else who has a complete social graph that would act as the bridge between us.
I also don't see what the incentive is for someone to join. Zopa/LendingClub pays interest, Kiva is charitable, this is...what? And how do you get your physical cash in and out of the system - would the service make deals with banks (which would put them under more regulatory oversight), or...?
Lastly, this seems like it would be targeted by anti-money laundering laws real quick. A way to transfer money electronically between people who know each other, across trans-national boundaries with no government tracking of the amounts in or out...what could go wrong, from the perspective of the Feds?
Bernie Madoff ran on a "network of trust" and he established a strong track-record over the years. The problem is that a monetary system requires more than even sophisticated mutual trust. It requires knowledge that the underlying processes are sound - and most people can't understand that. That's exactly why Ponzi schemes constantly reappear.
Maddof was supposed to be an investment manager. Ponzi too. Ripple is just a way of transferring IOUs. Investment and protocol design are entirely different beasts.
"This seems like it would have a serious early-adopter problem, in that it needs a pretty large network of people that somewhat know each other in order for things to work."
It's a classic, textbook example of the network effect: the more people use the service, the greater the value for each user. If a network of early-adopters were established and enough momentum were gained, it could perhaps work.
"I also don't see what the incentive is for someone to join."
Some might have an incentive to join. Some die-hard anarcho-capitalists would perhaps join for a matter of ideology. Others, like money launderers, would perhaps join so that they would not leave a paper trail.
"A way to transfer money electronically between people who know each other, across trans-national boundaries with no government tracking of the amounts in or out...what could go wrong, from the perspective of the Feds?"
Ripple looks like a P2P approach to the hawala system, and if the Feds are targetting the hawala system, they would doubtlessly target Ripple. However, cryptography might provide plausible deniability. I don't know because I am no expert on financial crypto and the like.
Last but not least: I personally find this an interesting concept, not much else. A rigorous mathematical analysis would be required to show that the system does work. One would have to study the robustness of the system to malicious nodes. Let us see: graph theory, game theory, mechanism design, cryptography, law, etc. There's food for thought here for many years of research...
Egads. That's the most obnoxious ad-laden site I've ever seen make it to the front page of HN. I hope this isn't a trend. The obnoxiousness of the ads also makes me assume that whatever this is must be a scam.
I only saw a couple of "ads", and I would characterize them more as "navbars": the "Be your own boss in:" text down the left side, and the "Learn more about:" text below it.
But yeah, if I disable AdBlockPlus and tell NoScript to "temporarily allow all this page" (twice) and then click on the Flash thing on the right that FlashBlock and NoScript are both blocking, it is a little annoying.
I very rarely visit parts of the web that are obnoxiously ad-laden. No need for extensions when the majority of my browsing is at sites that have a bit of respect for their readers.
You're right. Please note that both articles were submitted by me ;-) I have been interested in reputation systems for a few years, and now I am interested in combining debt and trust. It's a very difficult problem.
No. I am more interested in the mathematical description of the system than in actually implementing. To be honest, I don't think this problem is ripe for implementation yet.
I doubt it works. Lots of very smart researchers are looking at the problem of decentralized trust / reputation / economics. It all works fine until people start gaming the system in groups, which is further amplified by zero-cost identity (another tricky problem by itself). The solution is generally to introduce a central authority.
Payments is a regulatory problem first, and a distribution problem second. Somewhere around issue 9 or maybe 11 is "we shouldn't have to rely on banks"
I also don't see what the incentive is for someone to join. Zopa/LendingClub pays interest, Kiva is charitable, this is...what? And how do you get your physical cash in and out of the system - would the service make deals with banks (which would put them under more regulatory oversight), or...?
Lastly, this seems like it would be targeted by anti-money laundering laws real quick. A way to transfer money electronically between people who know each other, across trans-national boundaries with no government tracking of the amounts in or out...what could go wrong, from the perspective of the Feds?