Why does Ripple's consensus process have a 80% threshold?

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Written by: Dave Cohen, David Schwartz and Arthur Britto.

This article provides a high level overview of the Ripple ledger, the information it stores, and how transactions result in changes to the ledger.

When building applications on Ripple, it is important to understand this process, so as not to be surprised by the behavior of Ripple APIs and their effect on the ledger.

Important: Transactions are not applied to the Ripple ledger instantaneously; it takes some time for the effects of transactions to be applied. During this process, Ripple APIs may return provisional results that should not be mistaken for the final, immutable results of a transaction. Immutable results can only be determined by looking at validated ledgers.

Introduction

The Ripple network provides a worldwide, shared ledger, which gives applications authoritative information about the state of account balances and offers. This state information includes:

settings for each...
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(Before It's News)

Ten of my students bravely took advantage of my offer to post their recent thoughts to The Mermaid's Tale. I pasted those ten writings below. Be sure to read all the way through to last one, number 10. Here's what they responded to:

Extra Credit Assignment

Anthropology 201: Human Origins and Evolution

What does evolution* have to do with our current cultural and/or political climate pre- and post-Trump’s election?

Or

What insight can evolutionary thinking bring to bear on our current cultural and/or political climate pre- and post-Trump’s election?

Or

Can evolutionary thinking help us?

*the definition(s) of evolution that we use in this course, not the poetic use


In at least 300 words, answer one of those questions up there (or something related that I didn’t spell out explicitly but that compels you to write). Whatever you write, be sure to apply your understanding of...

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It has been stated that ripple reaches to consensus with mathematical certainty. If we analyze the consensus protocol, we can see that a specific validator can have a very narrow view of the state of the rest of the validators. At least 80% of his unl list must have proposed to include the transaction. Each of them received from 70% of their unl list such a proposal etc....

Unless all those nodes represent the 80% of the unl list of any validator, one cannot assume that the initial validator has knowledge there has been a global consensus on the new ledger.

A problematic example is a unl graph whose directed distance is more than 6 and has low connectivity.

Is this correct? if true what are the assumptions ripple makes on the unl graph so that the above...

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Ripple is a real-time gross settlement system (RTGS), currency exchange and remittance network by Ripple. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol,[3] it is built upon a distributed open source Internet protocol, consensus ledger and native currency called XRP (ripples). Released in 2012, Ripple purports to enable "secure, instant and nearly free global financial transactions of any size with no chargebacks." It supports tokens representing fiat currency, cryptocurrency, commodity or any other unit of value such as frequent flier miles or mobile minutes.[4][5] At its core, Ripple is based around a shared, public database or ledger,[6] which uses a consensus process that allows for payments, exchanges and remittance in a distributed process.[7] In 2014, Ripple defended the security of its consensus algorithm against a rival company.[8][9] As of 2016, Ripple is the third-largest cryptocurrency by market capitalization,[10][11] after bitcoin and...

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These slides were presented at Ripple Labs' first developer confernece on Oct 10, 2013 at Money2020 in Las Vegas, NV. The agenda was as follows:

1. Welcome and Introduction, Chris Larsen
CEO Chris Larsen provided an overview of Ripple and shared the latest news.

2. Ripple Technical Overview, Evan Schwartz
Engineer Evan Schwartz upacked Ripple from a technical perspective, and offered examples of what developers could build and have built on the Ripple Network.

3. Integrating with Ripple for Merchants and Gateways, Bob Way, Denis Kiselev and Brian Keller-Heikkila
Integration Engineer Bob Way explained how merchant and gateway integration works. Bob interviewed Denis Kiselev, founder and CEO of SnapSwap, about his team’s experience building the first U.S. Ripple Gateway. Brian Keller-Heikkila, CTO of ZipZap, joined Bob and Denis on stage to share special news.

4. Ripple Architecture and Advanced Uses, David Schwartz
Chief...

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If validators waited until other validators declared consensus to declare consensus themselves, no validator would ever declare consensus. So you must declare consensus and hope you turn out to be right. Most of the time you will be. If not, you will later not be mathematically certain of the results and will not pass them on to clients.

If you use a 75% threshold for mathematical certainty, many times you wouldn't be certain and would have to repeat the process. If you picked a 90% threshold for mathematical certainty, you'd be certain almost all of the time, but you'd be wasting time.

The video is a bit misleading. In fact, any threshold could be used and you would still have mathematical certainty if you actually did reach consensus. However, if you set the threshold too low, you would only rarely have certainty. 80% is the threshold we've chosen for mathematical certainty because it's a compromise that results in certainty being reached often and...

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The big advantage on the Bitcoin side is that its technology is now well-proven. Ripple's consensus system is the newcomer. Ripple was designed by people who had the benefit of seeing exactly what Bitcoin was doing and its strengths and weaknesses.

Ripple's consensus process can validate a transaction such that irreversibility is reasonably assured much more quickly. When a validator processes a transaction it signs the resulting final ledger. Those signatures are provided within seconds.

Bitcoin's proof of work scheme isn't path dependent. Ripple's consensus scheme is. This has advantages and disadvantages on both sides. Because proof of work is not path dependent, someone with sufficient hashing power can rewrite the past. However, the lack of path dependence also means that no state is required to determine the right chain. The rule for the winning chain is very simple -- the valid chain with the most work wins.

The biggest difference is how trust works....

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Editor's Note: This post is adapted from a comment the author wrote on XRPTalk, a forum for users of the Ripple network. We are publishing it as a rebuttal of sorts to criticisms of the Ripple protocol made by regular BankThink contributor Chris DeRose in a recent post. Kelleher has a small holding of XRP, the native digital currency of Ripple, but he does not work for Ripple Labs.

Financial institutions worldwide are exploring the possibilities for faster, cheaper, more transparent processing of global payments in near real time offered by distributed software solutions, including blockchains and distributed ledgers. Because this is a new field of study, these technologies are often misunderstood or mischaracterized.

I want to clear up some basic misconceptions about one such system, Ripple — in particular, the meme that the entire project is intended to remain centralized under the control of Ripple Labs, the company that develops the protocol, and/or its partner...

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Abstract

Ripple is a payment system and a digital currency which evolved completely independently of Bitcoin. Although Ripple holds the second highest market cap after Bitcoin, there are surprisingly no studies which analyze the provisions of Ripple.

In this paper, we study the current deployment of the Ripple payment system. For that purpose, we overview the Ripple protocol and outline its security and privacy provisions in relation to the Bitcoin system. We also discuss the consensus protocol of Ripple. Contrary to the statement of the Ripple designers, we show that the current choice of parameters does not prevent the occurrence of forks in the system. To remedy this problem, we give a necessary and sufficient condition to prevent any fork in the system. Finally, we analyze the current usage patterns and trade dynamics in Ripple by extracting information from the Ripple global ledger. As far as we are aware, this is the first contribution which...

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Table of Contents

Ripple LabsWalletsRipplesGatewaysConsensusCurrency IOUsTradersMarket Makers EnterprisesDue Diligence Questions In the FutureFAQsGlossary About the Author

Ripple Labs

Ripple is spearheaded by the company named Ripple Labs, Inc. in San Francisco. Formed in 2013 by Jed McCaleb, Chris Larsen, and a few others, Ripple Labs owns the intellectual property of the Ripple protocol. The code and programs that make up Ripple are available for free for anyone to download, use and modify. Ripple Labs is supported by a community of Ripple enthusiasts around the world who are passionate about making the technology more useful. These people provide essential feedback to product teams, engineers, techies, and C-level executives leading the overall implementation of Ripple’s development. The known investors in Ripple Labs include Google Ventures, Andresson and Horowitz, Lightspeed Ventures, Bryan Bradford, and others. As of March 2014, Ripple Labs has a...

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There are currently two popular interrelated narratives on social media surrounding participation of the block making process on a public blockchain. The stories are most pronounced within the Bitcoin community but are also reused by Litecoin, Ethereum and other cryptocurrencies too.

This includes the unchallenged statements that:

(1) anyone can still participate in block making, it is ungated and “permissionless”

(2) following a reward halving (“halvening”), networks become more decentralized because large, centralized farms and actors split apart due to economic pressures

This post looks at both of these and show that in practice neither is really true as of April 2016.

Named block makers

A year ago I reflected on some of the debate surrounding permissioned and permissionless blockchains. Part of that post involved looking at how the mining market actually evolved in practice; not just based on the generalized claims made by enthusiasts...

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