$2 000 USD

MAY 2013

GLOBAL

RIPPLE

DESCRIPTION OF EVENTS

"To expose and bring awareness to the flaws in the Ripple payment system, [TradeFortress stated he was] giving away 1 BTC on Ripple."

 

"This is a social experiment. Therefore, posts not consisting of an Ripple address to send 1 BTC to will be deleted."

 

"How it works: (1) Register for a bitcointalk.org forum account if you haven't. (2) Complete the following steps in your light (not a full node) Ripple client [to create a trust node for 100 BTC]. (3) Post your address here. I will send at least 1 BTC to your address."

 

"I won't defraud/scam you out of any money. Yes, you can convert the BTC I send you to real BTCs. For continued discussion, send me a PM, responses will be deleted from this point."

 

"I do not have 1 tril XRPs, I have 1 tril Ripple BTCs (I can print more if I want), I would be lying if I said I was surprised most people don't understand how flawed ripple is."

 

"If you trust him, say for 20 BTC, and you have reliable BTC IOUs (from bitstamp, for example) in the same wallet, THE SYSTEM CAN SWAP IOUS TRUSTED BY HIM WITH IOUS TRUSTED BY BITSTAMP if this is usefull to operate a transaction between users in that trust-subnetwork."

 

"I.E. the story will probably end with someone previously holding good-true-reedemable BTC loosing all and finding in his wallet only trash-IOUs issued by TradeFortess."

 

"This will happen if anyone in the network (not necessarily TradeFortess, but he could do that with an anonimous wallet) send the trash IOUS to a trusted gateway exploiting YOU to create a pathway."

 

"I don't know if his intentions are good but the method itself isn't, EVIDENTLY. Also if he doesn't actually want to steal money from anyone (which i doubt), he's allowing others to steal someone's money, knowingly."

 

"OpenCoin Inc dishonestly markets and presents Ripple as something that it isn’t. OpenCoin Inc advertised Ripple as “open source” when there was no source released (and there still isn’t!). OpenCoin Inc advertises Ripple as open – that no one owns it, despite the ironic fact that they own the trademark for Ripple."

 

"OpenCoin Inc premined all of the XRPs (Ripples) in existence, and their business model is tricking people into using the Ripple network (you must buy XRPs to use any part of Ripple), playing Federal Reserve, and making money off XRP speculation. That’s directly OpenCoin Inc’s business model."

 

"You don’t own “Bitcoins” or “USD” or anything on Ripple. You own debt. Anyone worth their salt knows that interest free debt is always worth less than what they represent. Yet the official (and only) Ripple client claims you have “BTC” or “USD”.. you don’t. You own debt."

 

"Take a look at all the Bitcoin services that have being hacked. MtGox. Bitcoinica. MyBitcoin. Instawallet. You could have lost bitcoins you deposited there – debt – but if you held real bitcoins in your wallet, they were safe. When a Ripple gateway or currency issuer gets hacked, because you can only hold BTC and such as debt .. you lose them. But worse. If you’re unable to repay the debt you owe because someone defaulted on you, then the person you defaulted on might not be able to repay their debtors."

 

"And because Ripple is based around debt being “money”, you have to take on debt to send even through it’s not presented in the UI. Every single bitcoin or dollar you sent has being debt. And as there is no limit to how many chains the debt can go.. Your friend might default because their friend of friend of friend of friend of friend has defaulted and the chain continues."

 

"It gets worse in two ways. First of all, Ripple values all IOUs (tokens) the same. If you trust multiple “gateways”, the Ripple client treats both gateways as equal – as a band-aid to get the Ripple network functional. You automatically become a “liquidity provider”, which means that you will automatically trade tokens of one type for another, 1:1, with no fee. You take on significant risk for no gain."

 

"You can't actually spend these 1BTC, TF has done this to prove a point. He's got a link to a screenshot showing 1 Trillion BTC in Ripple in his signature."

 

"Don't you see that he is just brilliantly exposing a fatal flaw in the Ripple system?"

 

"He is just issuing tons of unbacked debt which will collapse at some point, and the last ones will be left holding the bag with useless IOU's or "Ripple BTC" and 0 real BTC on their gateway's account."

 

"Of course you are not supposed to trust any anonymous guy of the internet - you should only trust ONE gateway per currency, which should be your bank for fiat currencies and MtGox/Bitstamp etc. for BTCs."

 

"But "you are not supposed to" is a big assumption. People will do en masse exactly what TradeFortress is doing, you know why? Because creating money from thin air is beautiful, and it's a perfect way to scam - we will see epic scams on Ripple. And this is the interwebz, people will "trust" their buddies, because isn't trusting friends what this is all about?"

 

"It's not that simple. He's using a system that is completely different than Bitcoin in order to steal people's real Bitcoin. He has admitted this. Did you not see my screenshot? Or does this not matter?"

 

"This is not an "experiment." He is using a completely foreign interface to fleece newbie's of their Bitcoin. Why would just put a "make sure you read about Ripple" when someone is flat out trying to scam people? Why not just end the scam?"

 

"Tradefortress - Isn't this the same guy that scammed ripple users?"

 

"What he's doing here might leave some of us scratching our heads, and it might be wrong...but it's not stealing. Stealing would be if he cracked the password on your ripple account and sent him a bunch of money(and even that's really a stretch). We should not immediately say that things which make us feel queazy are wrong, and stealing. That's how downloading things on the internet became associated with stealing. What's going on here is a different activity, right or wrong, good idea or not."

 

"The point is -- when you put real bitcoins into an account at an exchange, what are you doing?"

 

"You're trusting that they will keep these bitcoins in some form and that you will be allowed to sell them on the exchange for some other currency, and that at some point you will be either able to redeem your claims to that currency or your claims to that bitcoin."

 

"There's no real reason why that trust would have to happen when you send them a bitcoin. Obviously most of the time it's going to happen that way but it's imaginable that an exchange might have some other reason for assigning you an iou, for example it could be a marketing campaign where mtgox gives out 0.01BTC for every hour of lag or something that their account has experienced. They would just have to create a credit in everyone's account for that amount, and bang every user expects mtgox to honour it."

 

"Now suppose that instead of 0.01 BTC they decided to give 1BTC to every user instead, if you allow them to have access to 100BTC of your account to help them with a new lag-prevention system. At what point would you say that they stole the money? After they've taken your 100BTC (which you agreed would help them prevent lag) or when you found you could no longer take 1BTC out of your account that they gave you?"

 

"Trusting someone is not a very good way of scamming them. The 'scam', if there is one here is that people are being made to trust someone."

 

"If I trust you for 100BTC, I am not scamming you -- I am merely telling the internet that you are a pretty solid person and that they should take you seriously(by the way, I do not trust you for 100BTC, as you are a random internet person to me, no offense)."

 

"As there's no real reason why people would keep these 100BTC lines as 100BTC(if he's trustworthy, that 100BTC can be increased, if he is not they can be decreased) the interesting thing will be, down the line if people realize that TradeFortress isn't who they thought he was, he might owe each of the people who took part in this 1BTC, with no intent to repay them, even when bitcoin is much more valuable than it is today. The endgame here is him owing 100 people for...effectively no loss to them."

 

"That would make him a scammer, and it would also make him so in a very public way."

 

"It's an interesting experiment -- to see if 100 promises of bitcoins are worth one promise of 1 bitcoin amongst 100 people who already have an ability to send money, relatively easily to eachother. Apparently it is, to some people."

 

"You my friend have probably succeeded in creating the first lot of counterfeit bitcoins. When the price of bitcoins have gone down the pan I dont think there will be many people thanking you..."

 

"He said he's giving away 1 BTC on Ripple. In order to do that, he is giving people an IOU for a BTC (a PROMISE to pay you 1 BTC) that can be redeemed by you giving him back the IOU. He knows this, knows he will not redeem any of his IOUs (won't fulfill his PROMISE to pay you the BTC) and is using the trust he is asking people to give him to steal BTC IOU's issued by legitimate providers that will redeem their receipts for real BTC. It's a scam, he's running the scam and he's a scumbag for doing it."

 

"Scamming doesn't make a system fail, it merely illustrates that con-men can take advantage of the ignorant or the gullible. Stealing from the ignorant or the gullible makes you a thief. TradeFortress is now a thief. It's really that simple."

 

"Yes, TradeFortress is issuing IOUs. However, because webr3's Bitstamp-issued IOUs got exchanged in there with other people's TradeFortress IOUs, some people got webr3's Bitstamp IOUs instead and used them."

 

"It is a promise to pay 1 BTC, is it not, a promise that is automatically and digitally made liquid the second you are trusted by anybody with a BTC IOU from a trusted source."

 

"TradeFortress walked in to this with eyes wide open, hoping for exactly this result. It has happened, he has taken out 10.15 BTC worth of debt from a trusted source with me, which he now owes me. It's not my fault he's given it away."

 

"More to the point, many other people could have been deceived out of up to 100 BTC each (and still could be), and 445+ people have been (potentially) let down by TradeFortress's as yet unfulfilled promises."

 

"If this isn't a deceitful, foolish, untrustworthy, dirty thing to do, what is?" "I do not understand why this is being debated, if anybody else scammed a user out of BTC, potentially 455 users out of 100 BTC each, they would be gone in a second."

 

"What TradeFortress has done is abuse peoples trust, by using his reputation as trusted here to con people out of BTC. It doesn't matter what system is used, it has been abused."

 

"This is nothing to do with ripple, and show's no flaw in it. It simply shows that you should be careful who you trust, always."

 

"TradeFortress has asked for trust, and promised people money. He has incurred debt. He has a 100 BTC overdraft with many members of this forum, and he's cashed out over 10 BTC so far. This is money he owes."

 

"TradeFortress is either trustworthy, or is not. So far, it seems he's one of the shadiest people I've ever met on the internet. He has facilitated nothing but his own demise."

 

"TradeFortress, make good your promises, repay your debts, contact the people who issued trust to you and ask them to revoke it. What you have tried to do here is low and foolish."

 

"EDIT: you should be actually happy of this. Yours is an excellent example of what will come. You will pass to history to be the very first user to be left holding the bag inside Ripple. And I can guarantee that there will be A LOT of gullible people that will be left holding the bag inside Ripple, including a lot of XRP holders."

 

"It's simple really."

 

"TradeFortress promised to pay each user 1 BTC who trusted him 100 BTC. He sent IOUs for 1 BTC to each person who trusted him. He had no BTC. As soon as somebody who had trusted him had BTC backed by a gateway that was trustworthy, some of those promises has a trust chain back to a source which would turn the IOUs in to Blockchain BTC."

 

"TradeFortress did not issue some kind of different, made up, BTC, he promised to pay people real BTC, sending them IOUs."

 

"I trusted him, using an account with trusted BTC IOUs in it, and people then cashed out the BTC HE (TradeFortress) owed them."

 

"So, TradeFortress owes me 10.15 BTC, nobody owes him any."

 

"He also has many BTC promises ready to be cashed in, 455+ BTC by his own count, which can be cashed in the second anybody puts trusted btc IOUs from a reputable gateway in to any of those accounts."

 

"The ripple system worked perfectly, and had already been demonstrated and used for months."

 

"TradeFortress simply demonstrated it again, but in a very untrustworthy way, not fullfiling any of his promises. Simply, he only demonstrated that he is untrustworthy, and indeed that he doesn't pay back money he owes."

 

"No, no, it's not a scam! It is a SOCIAL EXPERIMENT!"

 

"For a scammer tag, the accused person needs to have promised to do something and then failed to deliver on the promise. TradeFortress never promised to pay anyone any bitcoins here. If you trust him to do something that he didn't promise, that's your problem."

 

"This social experiment has ended - here was the goals: (1) teach people that Ripple BTCs are not real BTCs. (2) teach people that your BTC.* can be substituted for anything you trust, automatically."

 

"There was also mass invasion of ripple.com/forum posters. It's not too hard to figure out who they are. Keep this in mind: (1) I have not profited at all from this. (2) Anyone who lost BTC.* had their BTCs exchanged by other people. (3) Anyone who I sent a BTC to could have redeemed someone else's Bitstamp or whatever IOU."

In a controversial move, TradeFortress created a thread on BitcoinTalk promising anyone who would set up a 100 BTC trust relationship a free "Ripple BTC". The way the Ripple network worked, anyone can issue debt even if they don't necessarily have those bitcoin. TradeFortress was issuing entirely fake debt. The "experiment" ended when one user who had trusted him also had a trust connection with backed bitcoin. Their 10.15 backed bitcoin was swapped for his unbacked bitcoin and cashed out by another user. After that, the experiment was voluntarily closed by TradeFortress.

Sources And Further Reading

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