13 January 2014

Can Ripple Become a Future of Financial System?

Sometimes, you may wonder, what would happen if you would be able to invest your time and money at the very beginning of the company which later turned big (think, Microsoft, Google, or Facebook). You need to be in the right place at the right time, and you should be ready to take a risk. Definitely, for one winner there are thousand losers. But, so what? Calculated risk often pays back great dividends.

First it was Bitcoin. Who could predict that virtual game currency could turn into real investment? There were few believers, there were few early adopters.

According to Norwegian news outlet NRK, Kristoffer Koch decided -- on a whim -- to invest 150 kroner (about $26) in 5,000 bitcoins in 2009, soon after the Bitcoin network first came into existence. Koch is said to have discovered the virtual currency while writing a thesis on encryption and decided to put down a small investment out of sheer curiosity.

Unaware of just how successful bitcoins would soon become, Koch says he promptly forgot about his digital stash; that is, until a flurry of media coverage about bitcoins caught his attention earlier this year.

Koch reportedly had to scour his memory for the password to the encrypted wallet that held his investment. When he finally figured it out in April, he says he was stunned by what he found. "It said I had 5,000 bitcoins in there. Measuring that in today's rates it's about five million kroner," Koch told NRK, according to a Guardian translation. That's about $850,000.

That’s was in April 2013, and the same investment as of today costs is more than $4 million. In June 2012, Bitcoins were worth $5. By April 2013, they were up to $266. Then they dropped to $70 in April, steadily raised by December 2013 to $1,200, and now above $820.

Virtual money turned real! But we all a bit too late to jump in the carriage. But maybe that is not the case with the new trendy start-up Ripple.

Ripple, a platform that just received funding from Google Ventures, Andreessen Horowitz, Lightspeed Venture Partners, and others, has created both an alternative to Bitcoin and a distributed currency exchange for Bitcoiners (and others) who aren’t comfortable using only Ripple’s currency, known as XRP.
The Ripple network is a protocol. It’s like HTTP for money. Users, merchants anyone can use it for free without a license.

The Ripple platform serves two purposes: it’s a distributed open-source payment network, and it’s the home of the newly minted XRP currency. As a payment network, Ripple provides free global payments without chargebacks (minus a $0.0001 per transaction network charge, implemented as a security precaution against hackers), the ability to pay in any currency using a distributed currency exchange, and an open protocol that any developer can use.

Participants can exchange dollars, yen, Euros, and even completely made-up currencies, all of which are entered into the system via "gateways." Larsen says: "A UI designer and myself can be a gateway to each other. A gateway can be a friend, neighborhood, a group. Most gateways will be larger. It’s like the way Paypal works--you give them $100, they create a $100 balance."

The only currency that doesn’t need to be entered into the Ripple platform from a gateway is XRP. This is an advantage over Bitcoin: Ripple is its own currency exchange.

What make me think this scheme has a serious future:
* The Ripple protocol is an open standard that can federate existing payment networks, similar to how Simple Mail Transfer Protocol federated messaging systems in the 1980s.
* Currency exchanges in Ripple are automatically processed at the best available rate with no fees or added margins. 
* Ripple allows users or businesses to transact in different currencies without exposing themselves to undesired foreign currency exchange risk. It allows instant cross-currency payments: you can send one currency (dollars, euros, pounds, etc.) and the recipient receives another (yen, yuan, rupees, etc.).
* Ripple can provide fast transactions (transactions can typically be settled in only a few seconds).
* Ripple's was designed to be counterfeit-proof.
* Ripple makes micropayments cost-effective – even payments less than a penny — opening the Internet to business models that would previously have been impossible. 
* No fear of inflation, since the total amount of Ripple currency XRP remains constant.
* Ripple was developed by the people who gained their experience on virtual currencies and translated their knowledge to the new scheme.
* Ripple got support and funding by several very serious entities.

Here are some disadvantages as well:
* While opening Ripple account is easy and very fast, you will not be able to perform any transactions before your Ripple wallet becomes funded.
* You need a very small amount of at least 20 XRP (at the moment 1 XRP costs a bit more than 2 cents), but getting it may be challenging at first. You may purchase it easy, if you have Bitcoins, or with dollars, but the process is very manual. The getaways for such transactions are very crowded, and it may take significant time and efforts to do so.

How to start with Ripple:
1. Open your account: https://ripple.com/client/#/login
2. When you first create a Ripple wallet, it will need to be activated before it can be used.  This prevents accounts from being created automatically by computers and used in fraudulent ways. Activating an account involves transferring a minimal number of XRP into the account (this number is currently 20 XRP, though it can change from time to time – see https://ripple.com/wiki/Reserves for details).  Until the account is activated, you will not be able to use it for funding your account with other currencies, sending and receiving, and trading.
3. If you know someone who already has a Ripple account, you can ask your friend to give or lend you the required number of XRP. As said, you can purchase bitcoins and convert them into XRP, which can be used to activate your account. You can participate in one of the Ripple Labs giveaways to get XRP for free.
4. Current giveaway you can get XRP for free is sponsored by ComputingforGood.org. While you donate your idle computing power to scientific research, you will get XRP from Ripple Labs. Anybody with an internet-connected computer or Android device can participate, and unlike mining Bitcoins, does not require super-duper hardware.  Follow the instructions on the site: https://www.computingforgood.org/
5. Install the software, leave it run by itself, and make some Ripples, while giving your unused resources to the just cause, like Cancer Research, Environment, and others.

Other useful links:
1. XRP Talk is holding several giveaways, which will help to start and fund your account. Website: https://xrptalk.org/forum/28-giveaways/
2. SnapSwap.us is giving away 2,000 XRPs when you open up an account and link it to Dwolla! Also, receive 500 XRP with your first deposit of $10.00 or more from your bank account to your Ripple Wallet, and 3 XRP with every subsequent $1.00 deposited, up to 300 XRP per transaction and up to 2,000 XRP total.
3. The OpenCoin.in forum is giving away 1 XRP for every forum post and awarding 100 XRP every week to the member who posts the most that week!
4. Ripple Faucet. Come once a day and enter your Ripple address to get 0.1 to 1 XRP. Not much, but fast and easy. Website: http://ripplegiveaway.com/. Website should be already funded to get into the raffle.

Sources and Additional Information:

06 January 2014

3 Free Software Wallets for BitCoins

For those who experiment with BitCoins, wallet is necessity. Your Bitcoin wallet is what allows you to transact this virtual currency with other users. It gives you ownership of a Bitcoin balance so that you can send and receive bitcoins. 

There are actually three types of the wallets:

1. Software wallets. Software wallets are installed on your desktop computer. They give you complete control over your wallet. You are responsible for protecting your money and doing backups.

2. Mobile wallets. Mobile wallets allow you to bring Bitcoin with you in your pocket. You can exchange coins easily and pay in physical stores by scanning a QR code or using NFC "tap to pay".

3. Web wallets. Web wallets allow you to use Bitcoin anywhere with less effort to protect your wallet. However, you must choose your web wallet with care as they host your bitcoins.

Today, I will present several software wallets you may use:

1. MultiBit

MultiBit is a secure, lightweight, international Bitcoin wallet for Windows, MacOS and Linux.

Main Features:
* MultiBit makes performing Bitcoin transactions quick and simple
* MultiBit comes in a variety of languages
* MultiBit is free to download and is open source (MIT license)
* MultiBit is user-friendly and is easy to install

2. Electrum

Electrum is an easy to use Bitcoin client. It protects you from losing coins in a backup mistake or computer failure, because your wallet can be recovered from a secret phrase that you can write on paper or learn by heart. There is no waiting time when you start the client, because it does not download the Bitcoin blockchain.

Main Features:
* Instant on: Your client does not download the blockchain, it uses a remote server.
* Forgiving: Your wallet can be recovered from a secret seed.
* Safe: Your seed or private keys are not sent to the server. Information received from the server is verified using SPV
* No downtimes: Several public servers are available, you can switch instantly.
* Ubiquitous: You can use the same wallet on different computers, it will auto-synchronize.
* Cold Storage: You can have secure offline wallets and still safely spend from an online computer.
* Open: You can export your private keys into other Bitcoin clients.

Operating Systems: Windows, Mac, Linux, Android.

3. Armory

Armory – State of the art bitcoin wallet that is easy to use and provides cold storage. The latest Armory version will work on systems with only 1-2 GB RAM. No other bitcoin wallet provides the ultimate security and ease of use of Armory.

Main Features:
* Multi-wallet interface. Manage as many wallets as you want simultaneously. Armory was designed from the start for multi-wallet operations without limit on number.
* Wallet encryption with time- and memory-bound key derivation.
* Import/Sweep Addresses. Import private keys into your (deterministic) wallet.
* Corruption-resistant wallet files with automatic detection & correction of HDD byte errors.
* Armory can be run on an offline computer without needing the blockchain. Offline computer is only used to manage wallets that never touch the internet, and sign transaction packets transferred via USB. Online attackers can’t steal your wallet if the wallet was never online!
* Message signing with your Bitcoin addresses.

Operating Systems: Windows, Mac, Ubuntu, Linux


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