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Frequently Asked Questions

Ripple Concept

Using This Site

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Ripple Concept

How do I collect my money?

When you get paid through the service, you are left being owed by one or more of your neighbours. You may use those obligations to purchase whatever you can by paying them to someone through the system. Of course, you may pay them right to one of your neighbours for whatever they have to offer you, including cash.

Until there is a critical mass of users, buying exactly what you want using the Ripple service may be difficult, therefore if settling in cash is important to you, you should make this clear to your neighbours so they will not be surprised when you ask them for money. Also, take care to not offer credit limits that are too high, or collecting may become a problem. Remember, someone may become indebted to you not just for what you or they have done using the Ripple service, but also for what others have done through the connection between you!


Why would I want to use the Ripple service when I can use regular money?

In short, because it is cheaper to use and because your friends are a more wholesome source of credit than banks. Not only will your friends be more understanding if you need to miss a few payments for a good reason, but they will also be more likely to help you out if your spending habits are getting unhealthy.

For a more detailed perspective, see the essay.


Is the Ripple service a barter system?

No. It is financial payment services, with all the benefits of money over barter, such as not having to find someone who wants exactly what you're offering before you can get something you want. In a sense, all payment services are about providing a way to flexibly store value to enable more efficient exchanges, which could be called "delayed-gratification barter". But no, the Ripple service has nothing to do with barter.


Is the Ripple service a LETS system?

The Ripple service was inspired by the LETS concept and the writings of Michael Linton, and was conceived originally as a way to bring more accountability into the spending of credits in a LETS system. Unlike LETS, which only tracks obligations to and from a single central intermediary, The Ripple service tracks obligations between individuals in a social network. In practice, many LETS users and administrators have complained that LETS provides little incentive to make good on one's obligations other than the desire to have the system work. With the Ripple service, obligations are never to the financial service itself, or to some other collective entity, but in specific amounts to specific individuals who have agreed to trust you, and the loss of whose trust would have a tangible effect on a participant's life should they decide to renege on their obligations.

Put another way, the Ripple service is like an interconnected network of LETS systems, each operated by an individual participant. The subscribers to each individual's LETS are his or her neighbours. Each participant acts as a broker to exchange between the LETS currencies they subscribe to.


Using Ripplepay.com

How do I enter pre-existing debt into my Ripple payment service account?

First, make a connection to the person you owe or who owes you the pre-existing debt, and make sure that the person owing the debt is granted a high enough credit limit to accommodate the amount of the debt. Then, since payments to the Ripple service account are actually IOUs, the person owing the debt would make a regular payment in the amount owing to the person he or she owes. That will change the balance on their shared connection account to reflect the pre-existing debt.


How do I cancel debt within my Ripple financial service account once it's been settled?

When two connected account partners settle a service obligation outside the user's account, for example, by using cash, the person receiving the settlement must record it in the account by returning the settled IOUs to their issuer. They do this by making a regular payment to the person who settled their debt with you. Your mutual account balance will be changed to reflect the fact that the debt has been settled. In effect, they are using the IOUs they hold inside the Ripple services account to purchase cash.


How do I close down a connection account?

When you no longer wish to have a shared credit account with someone on the Ripple service, you may close the account, but only if the balance is zero. First, set both credit limits to zero. Then arrange for the partner holding the balance, if any, to make a payment within the account to make the balance zero, and settle the debt outside the Ripple service account.

Alternatively, if you both have other active accounts, you may just wait for through payments to settle the balance for you. The zeroed credit limits will prevent the balance from ever doing anything but shrink.


Why is my account balance outside the credit limits I have set?

You have most likely reduced a credit limit below the current balance so as to have placed the already-existing balance out-of-bounds. Don't fear, the balance will not be able to move any further out-of-bounds, and payments moving through you will likely eventually move the balance into the new limits you have created. You may wish to settle some of the debt on the account with your partner to move the balance back in-bounds.


Why do my account balances not add up?

So that no fractional cents are lost on exchanges between different units, the Ripple service keeps accounts to 12 decimal places. Since only two decimal digits are displayed, rounding sometimes means that the totals appear to be off by 0.01. The totals are in fact correct to two decimal places. A future feature may enable accounts to be viewed to more decimal digits of precision to confirm this.


Why does my account balance keep changing?

If you have accounts in several different currency units, and view your overall balance in any one currency (usually your default display units), your overall balance will fluctuate slowly over time as the exchange rates between currency units change.


Why does the total balance for each of my different currencies change?

When you are selected to be an intermediary for a payment, you may receive credits on an account in one currency, and pay out credits in another currency. So your total balance for the first currency would increase, and the total balance for the second would decrease by the same amount. As exchange rates change over time, you may find that any single through-payment may cause you a very small gain or loss for this reason. If this makes you uncomfortable, you may disable automatic conversion between currency units in your profile. This will force your total balances for each of your different currencies to remain the same unless you make or receive payment in one of them.



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