[Confiks]

This all looks very similar to a naïve version of the early (~2010) Ripple protocol [1], including all its limitations.

An unmentioned limitation is that the system doesn't really suit the 'consumer economy', unless salaries by producers are also paid out in the currency. It does work well for transactions between peers, i.e. friends spending / borrowing – in this system it's essentially the same thing – from each other.

[1] https://www.youtube.com/watch?v=xgGcVv04unM

[aravindet]

What were the limitations of the Ripple protocol?

[jancsika]

For one thing, it had no bootstrapping mechanism to speak of. Most of the early conversations about Ryan Fugger's Ripple started with, "Imagine that X participants are using Ripple and extend credit to each other." But users couldn't test out that scenario and get a feel for the network because it was non-trivial to get X participants together and have them extend credit to one another.

Meanwhile, people were downloading Bitcoin and clicking a button to "Generate Coins." Great, so you've got coins. Now what? Maybe you offer 10,000 of them to anyone on the internet who will call in a pizza order in your area. Somebody does it and your pizza gets delivered. You send them 10,000 of your whacko coins in return. Boom! A working cryptocurrency is born.

You just couldn't achieve that with the early Ripple.

The later Ripple which wasn't written by Ryan Fugger added a cryptocurrency called XRP to this scheme, and apparently spent most of its time arguing that its new cryptocurrency wasn't a cryptocurrency but just spam protection. A sizable portion of this spam protection was divided up among the original investors/author. It was fun to read the comments on that one.

[wildbunny]

It has no countermeasures for Sybil attack. Therefore, the only trusted nodes in the Ripple network are owned by Ripple labs, making the entire currency much more like Visa than a real blockchain.

[jancsika]

Ripple labs version of Ripple is completely different than the previous piece of software called Ripple written by Ryan Fugger.