VPN Accepts Ripple, the First True Bitcoin Competitor

tl;dr Ripple (XRP) is a new decentralized Bitcoin-like currency that doesn’t require a blockchain or mining. The Ripple network also supports sending and trading between any currency enabling true decentralized BTC exchanges. Ripple and Bitcoin can work together to expand each other’s reach. We are the first VPN to accept Ripple.

As Bitcoin approaches the 30$ mark for the second time, we are proud to announce that we are the first VPN to accept a brand new currency, Ripple, the first cryptocurrency that truly has a shot at competing with Bitcoin. Up until this point, all other decentralized digital currencies which tried to compete were essentially cheap knockoffs of Bitcoin. Ripple is the first true innovation in decentralized cryptocurrencies since Satoshi Nakamoto released Bitcoin.

We’d like to start off with a simple list of Ripple’s advantages and disadvantages in relation to Bitcoin. Ripple has no blockchain, no mining, and no hard limit on number of transactions per second. Because of this, its transactions can be completely confirmed within seconds rather than hours. Since there is no mining, there is no 51% attack, which in Bitcoin allows someone who invests enough money to either double spend or shut down the entire network. It also makes Ripple a “greener” cryptocurrency as no “pointless” computation has to go into confirming its transactions.

Ripple’s major disadvantage to Bitcoin is that it starts out with 100% of Ripple Credits (XRP or ripples) being completely controlled by their originator, a corporation, OpenCoin Inc (founded by Jed McCaleb of MtGox and eDonkey fame). In contrast, bitcoins started out not existing at all, but came into existence via mining, a process open to anyone who was so inclined to participate. OpenCoin will over the course of a few years attempt to distribute 80% of all XRP in as fair a way as possible.  Whereas most bitcoins were mined by a small amount of individuals early on (for a price much much cheaper than today’s), OpenCoin wants to distribute ripples in a more even fashion between a much larger number of people. So some will say Ripple is more fair because of this, while others will say it’s less fair because a single organization is handling the process rather than a free market mechanism. Other than the distribution mechanism XRP is just the same as BTC, it’s a fixed supply currency enforced by every peer, and once you have them, they are yours. There is no counterparty risk and they will be yours until you choose to send them on to someone else.  Ripple’s other obvious disadvantage is that it’s much more alpha than Bitcoin. While Bitcoin is still a very alpha technology as well, it has stood up quite well thus far. It will be years before Ripple can truly claim to be an invulnerable payment processing network.

But none of this matters, Bitcoin and Ripple were made for each other. Ripple is how Bitcoin will scale, in both a technological sense as well as in adoption. Bitcoin has a hard limit on the number and size of transactions it can process per second. While there is much debate in the Bitcoin community about lifting this limit, doing so would be equivalent to creating an entirely new Bitcoin network and migrating everyone onto it.  Not an easy task to say the least. Ripple’s two biggest achievements are solving the double spend problem without a blockchain and inventing a decentralized way to send and exchange non Ripple currencies over its network. The latter enables two things which will truly allow Bitcoin to flourish: 1) Most Bitcoin transactions can be done through the Ripple network, only to be settled on the blockchain when absolutely necessary. 2) True decentralized Bitcoin exchanges will now be possible via trading on the Ripple network.

Easy to understand is one of the things Ripple isn’t, but we’ll try to give an example of how you might pay a merchant in BTC via the Ripple network. The first thing to understand is that the Ripple network will have many gateways that will hold the actual currency which is being transacted over Ripple. Anyone can start their own gateway and hold other people’s currencies. So let’s say there are two gateways, gateway A and gateway B. You trust gateway A with your BTC and the merchant you want to pay trusts gateway B with their BTC. This means there are effectively two types of BTC on the Ripple network: BTC/A and BTC/B. Even though they both represent BTC they aren’t equivalent. Since the merchant doesn’t trust gateway A he can’t do anything with BTC/A.  This is where the exchange comes in. There are market makers on the Ripple network who will convert to and from any currency pair. So let’s assume someone has an open trade of 1 BTC/A for 1 BTC/B.  When you try to send 1 BTC to the merchant, Ripple will see that you have BTC/A, he wants BTC/B, and that a trade between them exist. All in one go it will deduct the BTC from your account, execute the order, converting the BTC/A into BTC/B, and credit it into the merchant’s account. Now the merchant can either hold on to the BTC in the Ripple network or send it to his gateway (gateway B) and withdraw the “real” BTC from them onto the Bitcoin blockchain.

The awesome thing about the above process is that it works for any currency, not just BTC. You can do the exact same thing with dollars, effectively allowing you to transact USD privately outside of the traditional banking system. As stated above you can also convert between USD and any other currency of your choice in a totally decentralized fashion. This opens up a world of possibilities.

We at Private Internet Access are excited to be the first VPN to accept this game changing new currency. If you’d like to try it out and get some free ripples there are two ways. If you’re a member of bitcointalk.org head over there as OpenCoin is giving out free XRP to all its members. If you aren’t a bitcointalk member, we have been granted a limited number of XRP to distribute. Send a tweet to @buyvpnservice with a link to this post and your Ripple address and we will send you some (first come first serve, non-bitcointalk members only) (we’re all out!). And of course, to sign up for our VPN with ripples or any other currency check out our buy VPN page.

For technical details on Ripple check out https://ripple.com/wiki or #ripple on freenode.

  • Jim Olbey

    I hope Ripple isn’t too far ahead of its time. It might take awhile to catch on.

    Good on PIA for going out on a limb. You all make me glad I picked you as my primary VPN.

    • YAAAAAAPHUNK

      “Stamps” are Fees. Trading fees for a value on stock exchange will stop transactions with all the letters, but stamps.

  • http://twitter.com/_harddisk_ Marco Schuster

    Sounds like Hawala for me, only taken to the digital level.

  • Troy

    So they premined tens of billions of coins and you expect them to give them away fairly? Too funny.

    • Jim Olbey

      Ripples are worth almost nothing. Think of them like stamps. Stamps are small, inexpensive items that will get a letter across the country. 

      Ripples are the inexpensive little stamps people can use to send bitcoins and  other payment options to each other across the world over a trust network. You can’t trade over the network unless you build trust with others first. If you break your trust network, it will be impossible to trade with others. 

      Ripples are tokens, chits, stickers, tickets. There are a hundred billion of them and no more will be issued. 

      Open Coin, the group behind Ripple, will be giving away boatloads of them. They want people to use the network. 

      Bitcoin is the letter, Ripple is the post office. You need stamps/xrp to mail a letter/bitcoin.

      • Chsir Trsack

        Bitcoin was once worth almost nothing. XRP has the potential to explode, just as Bitcoin did.

        • Jayson

          Go ripple

      • zylstra

        You’re saying I need Ripples to send Bitcoins? I don’t get it.

      • szpecjalista

        That’s idealistic speaking, but realistically we’re observing a ridiculous bubble where people pay absurd sums for XRPs that are over 99% centrally owned.

      • Sarah

        Ripples aren’t worth much right now. In a few years they will be. Just like Bitcoin started out being almost worthless. Change happens peeps, get used to it.

    • Jason

      Funny or not, that’s what they are doing.

  • Christa Thomas

    Ripple represents the future of Internet Currencies! The structure is elaborated, thought out, effective and awesome! Ripple is promoted by an excellent team of developers and Webdesigners! Good luck Ripple!

    • JIM BOB

      FUCK OFF RIPPLE. YOUR NOT DECENTRALIZED, NOT OPEN SOURCE AND YOUR FOUNDERS WHOLE THE BULK OF THE XRP. ALSO, THERE IS NO ACCOUNT FOR EXPIRY OR SETTLEMENT. IOUS ARE ISSUED WITH NO AGREED REDEMPTION DATE. THIS MEANS PAYERS ARE EFFECTIVELY MAKING OPEN ENDED GIFTS. RIPPLE IS A VIRUS LEACHING OFF BITCOIN. DON’T FALL FOR IT.

      • HillbillyWatcher

        How can anyone take a guy who can’t spell “you’re” seriously. Not to mention writing in all caps, honestly…

  • BobSmith

    You lost me at the title!  Not a competitor.

  • Christa Thomas

    Ripple represents the future of Internet currencies! Its structure is elaborated, thought out, effective and awesome! It is promoted by excellent developers and Webdesigners! Good luck Ripple!!!!

  • Antony

    To be honest… I never caught on with this online currency idea. I just now created a ripple account, and then… I go away…because 1) I can’t do anything with it until someone sends me something 2) I can’t even deposit my own US dollars into this account like this post seemed to suggest. 3) I don’t know anyone that uses BitCoin, let alone Ripples…so the experience with Ripple feels just like when I first started using Google Wave…

    Oh well, baby steps for anything new… but for as long as I can’t fund my own account with my own money.. I don’t think I have any use for ripple

  • jonyah

    Too bad you can’t get any unless someone gives them to you. So far, it’s DOA. Why accept a currency no one has? I obviously don’t get it.

  • Derp

    As soon as you start with “tl;dr” I stop reading: You obviously like to fuck with your readers.

  • Chicken Smitten

    Here is my opinion, the statement “Ripple’s major disadvantage … … as fair a way as possible.” concerns me. This is because intuitively it sounds like a currency that is controlled by a central authority/institution much like the currencies we have globally. Then this defeats the purpose or the initial claim that Ripple is a decentralized currency. Do correct me if I am mistaken with supporting links or valid counter arguments.

    • J2383

      Which, unless I’m mistaken takes away all the advantages of cryptocurrency, and just turns it back into a non-government backed fiat currency.

    • cryptoFTW

      But every one can be a gateway, so I don’t see how this can mean that the government controls the currency.

  • dave

    fuck you and fuck ripple, this is just a cia operation trying to control the whole market

    • Nick

      LOL @ Dave – and the Mother ship is coming to anally probe you soon too. Better look out!

  • Si

    wHAT IS XRP?

    • Nitcatcher

      wHAT IS GOOGLE?

  • joey

    Does anyone have any spare ripples so ripple will let me open my wallet. Please? thanks

    rE1mfYUg6T4Cfe8xWLsBHQFsHyHMQsasP6

  • actionsketch

    This post is concerning… it’s the most informed misunderstanding I’ve seen yet.

    To everyone who reads this: XRP is not a currency. Ripple is not a currency service or protocol. Ripple is a currency exchange protocol.

    XRP was never intended and never will be a medium of exchange. It is a commodity, like an envelope, that you use to protect the exchange of a currency. It prevents denial of service attacks on the network and it gives OpenCoin a clever way of profiting from the network, which I don’t think there’s any problem with.

    If PIA want’s to join the Ripple network, they should set themselves up as a gateway and accept Ripple IOUs from other gateways that they trust in the currencies that they want. If they would like to sell XRP to people who want it, then go for it… but remember it’s a commodity and not a medium of exchange. If PIA want’s XRP, then I bet OpenCoin would be willing to give them plenty for free.

  • bro

    maybe it would be better to add a payment service that people actually use, such as Paysafecard?

  • JHS

    The future of the ripple: This domain name has been seized by United States Illicit financial team. Bitcoin forever.

  • ne

    I bought xrp at 103, now is at 77, is just like bitcoins, just be patient, and it will be like people who bought telephone stock shares right after 1929 at 1usd, and in the 50s it was 1mln usd x share…i hate myself cause i was about to buy bitcoins at 20bitcoins x dollar in 2011, and now is worth 600usd, so 100usd would have meant about 1 mln usd now…..i hope ripple does the same thing….i dont care if its decentralized, or own by a Sheikh as long as i earn something, go RIPPLES