Subject: [Ledger] Bootstrapping Interledger

From: Adrian Hope-Bailie <[email-masked]>
Date: Tue, 8 Nov 2016 10:56:10 +0200

When the Internet was first emerging and large university and research
networks were coming together on the back of the Internet Protocol the
challenge for everyday users was how they could access this new network of
networks without special permission or equipment.

We face a similar challenge with ILP in that very few of the ledgers
accessible to us support the one function that is critical to universal ILP
payments; real-time conditional transfers. (I wrote a bit about conditional
transfer here:
https://medium.com/@ahopebailie/the-power-of-conditional-payments-2d1ea531250a
)

So, just like the pioneers of the Internet we're improvising!

"Dial-up" interledger enables us to bootstrap the Interledger using
"virtual" ledgers between connectors that have established a bounded
trusted relationship.

In other words, if I run a small connector and I trust my friend Stefan who
also runs a connector then we can transact without needing an ILP-enabled
ledger between us.

We establish a credit limit that we are both comfortable with and agree on
a way to settle our positions as required (via Bitcoin, bank transfer or
even cash).

Consider what will happen if we build a community of people who are all
establishing similar peering relationships and then introduce ILP-enabled
ledgers to bridge any gaps between connectors that don't know one another.
Very soon we'll have an entirely new payments network where payments flow
like information does on the Internet today.

We're calling this project the Interledger Bootstrap Project and I've
started capturing some thoughts on the project wiki: https://github.com/
interledgerjs/ilp-kit/wiki

In short:
1. Get the ilp-kit code and run a node
2. Find other nodes to peer with
3. Do ILP-enabled transactions
4. Win!

The ilp-kit is still pre-release and likely to have some bugs and change a
lot so if you're keen to be an early adopter and help test and contribute
back to that project please do so. If you'd rather wait until the code
stabilizes a bit then keep watching the list and we'll let you know when
the first Beta is available.

Please feel free to make contributions to the wiki. It would be great if
this was a community effort!

Adrian

---

From: Paul Frazee <[email-masked]>
Date: Tue, 8 Nov 2016 11:39:58 -0600

I'd be willing to run a node without tx fees while we're in the learning
phase. What kind of admin/maintenance do I need to be prepared for? The
wiki is good, but a checklist for setup and ongoing maintenance would be
helpful.

I could also help organize an Austin-based meetup.

On Tue, Nov 8, 2016 at 2:56 AM, Adrian Hope-Bailie <[email-masked]>
wrote:

> transfer here: https://medium.com/@ahopebailie/the-power-of-
> conditional-payments-2d1ea531250a)
>
> In other words, if I run a small connector and I trust my friend Stefan
> who also runs a connector then we can transact without needing an
> ILP-enabled ledger between us.
>
> started capturing some thoughts on the project wiki:
> https://github.com/interledgerjs/ilp-kit/wiki
>
> In short:

---

From: Ryan Fugger <[email-masked]>
Date: Tue, 8 Nov 2016 10:30:09 -0800

This is great Adrian.  My plan was always to evolve Ripplepay.com into a
decentralized system like this.  If you or anyone is interested in
upgrading or otherwise using that creeky old system to help support
bootstrapping Interledger, I'd be happy to help out however I can.

On Tue, Nov 8, 2016 at 12:56 AM, Adrian Hope-Bailie <[email-masked]>
wrote:

> _______________________________________________
> Ledger mailing list
> [email-masked]
> https://www.ietf.org/mailman/listinfo/ledger
>
>

---

From: Daniel Bateman <[email-masked]>
Date: Tue, 8 Nov 2016 11:47:51 -0700

Excellent, thank you Adrian.

And thank you Ryan for your original vision for Ripple.

Perhaps what is needed now is a step-by-step guide? "How to run an
Interledger connector"

Daniel
On Nov 8, 2016 11:32 AM, "Ryan Fugger" <[email-masked]> wrote:

> On Tue, Nov 8, 2016 at 12:56 AM, Adrian Hope-Bailie <[email-masked]
> > wrote:
>
>> transfer here: https://medium.com/@ahopebailie/the-power-of-conditional-
>> payments-2d1ea531250a)
>>
>> We establish a credit limit that we are both comfortable with and agree
>> on a way to settle our positions as required (via Bitcoin, bank transfer or
>> even cash).
>>
>> The ilp-kit is still pre-release and likely to have some bugs and change
>> a lot so if you're keen to be an early adopter and help test and contribute

---

From: Tom Haas <[email-masked]>
Date: Wed, 9 Nov 2016 09:50:59 -0800

This is great and I'm excited to see Interledger get off the ground.
Congrats to Adrian and all of the ILP developers involved!

Perhaps this is better as a separate thread, but what sort of regulations
should those who run virtual ledgers be thinking about? At the moment,
we're talking about small p2p networks. But if I want to run a Bitcoin
exchange or Ripple gateway in the United States, there are a number of
KYC/AML regulations, possibly bitlicenses, and other things I have to worry
about (including banking, which is not trivial for those doing business in
the cryptocurrency ecosystem). What of this applies to running a virtual
ledger in a p2p network?

As an individual without many resources, how do I deal with the potential
legal and financial pitfalls of running a virtual ledger? Just want to get
the conversation started.

Best,

Tom

On Tue, Nov 8, 2016 at 10:47 AM, Daniel Bateman <[email-masked]> wrote:

>> On Tue, Nov 8, 2016 at 12:56 AM, Adrian Hope-Bailie <
>> [email-masked]> wrote:
>>
>>> transfer here: https://medium.com/@ahopebaili
>>> e/the-power-of-conditional-payments-2d1ea531250a)
>>>

---

From: Paul Frazee <[email-masked]>
Date: Wed, 9 Nov 2016 13:47:17 -0600

What about test nodes that exchange fake currencies only? Would that A)
relax the regulatory requirements, B) be useful to ILP rollout?

On Wed, Nov 9, 2016 at 1:42 PM, Andrew Bransford Brown <[email-masked]>
wrote:

> I'd suggest a State exchange to avoid SEC regulations while building the
> market.  Once you cross state lines, then pass the SEC regs.  The Texas
> Stock Market in San Antonio, for example.  Some groundwork has been
> completed.
>
> A simple protocol is required that will handle the contracts with
> sufficient granularity.  See the attached for what I term a "transaction
> stack".  It breaks the Offer and Terms, so Bid/Ask are contractually
> identical.  Faster and works for anything.
>
> Andrew B. Brown
> (512) 947-8282
> http://KidsCourtyard.com
>
>
> On Wed, Nov 9, 2016 at 12:50 PM, Tom Haas <[email-masked]> wrote:
>
>>> On Nov 8, 2016 11:32 AM, "Ryan Fugger" <arv@ryanfugger..com
>>> <[email-masked]>> wrote:
>>>
>>>> This is great Adrian.  My plan was always to evolve Ripplepay.com into
>>>> a decentralized system like this.  If you or anyone is interested in
>>>>> In other words, if I run a small connector and I trust my friend
>>>>> Stefan who also runs a connector then we can transact without needing an
>>>>> We establish a credit limit that we are both comfortable with and
>>>>> agree on a way to settle our positions as required (via Bitcoin, bank
>>>>> transfer or even cash).
>>>>>
>>>>> Consider what will happen if we build a community of people who are
>>>>> all establishing similar peering relationships and then introduce
>>>>> ILP-enabled ledgers to bridge any gaps between connectors that don't know
>>>>> one another. Very soon we'll have an entirely new payments network where
>>>>> payments flow like information does on the Internet today.
>>>>>
>>>>> The ilp-kit is still pre-release and likely to have some bugs and
>>>>> change a lot so if you're keen to be an early adopter and help test and
>>>>> contribute back to that project please do so. If you'd rather wait until
>>>>> the code stabilizes a bit then keep watching the list and we'll let you
>>>>> know when the first Beta is available.
>>>>>
>>>>> Please feel free to make contributions to the wiki. It would be great
>>>>> if this was a community effort!
>>>>>
>>>>> Adrian
>>>>>

---

From: Andrew Bransford Brown <[email-masked]>
Date: Wed, 9 Nov 2016 14:42:18 -0500

Andrew B. Brown
(512) 947-8282
http://KidsCourtyard.com

---

From: Tony Arcieri <[email-masked]>
Date: Wed, 9 Nov 2016 11:59:53 -0800

On Wed, Nov 9, 2016 at 11:42 AM, Andrew Bransford Brown <[email-masked]>
wrote:

> market.  Once you cross state lines, then pass the SEC regs.
>

It's a little more complicated than that. Individual states within the US
have their own money transmitter laws, which often apply to money transfers
within the state in addition to transfers between states or countries.

Setting up a test network with a fake currency that has no actual value
sounds ok, but if you are moving real money, even within a single state
(state laws providing), you'll want to have a money transmitter license
before you do so. For transmitting money between states, you'll need
licenses for every state you plan on operating in.

--
Tony Arcieri

---

From: Andrew Bransford Brown <[email-masked]>
Date: Wed, 9 Nov 2016 15:30:20 -0500

If you focus on a stock market, the software will work for currencies as
well.  The code is identical.  See my attachment.

In Texas, a stock exchange license is $10,000.  A currency exchange license
is $5,000.  There are net worth requirements and background checks, but it
is as simple as applying for a license.

Incorporate in Texas.
Raise some capital for ownership.
Apply for the licenses.
It's that easy.

Andrew B. Brown
(512) 947-8282
http://KidsCourtyard.com

On Wed, Nov 9, 2016 at 2:59 PM, Tony Arcieri <[email-masked]> wrote:

> On Wed, Nov 9, 2016 at 11:42 AM, Andrew Bransford Brown <
> [email-masked]> wrote:
>

---

From: Adrian Hope-Bailie <[email-masked]>
Date: Wed, 9 Nov 2016 23:04:43 +0200

If there is interest in running a parallel test net of purely fake
currencies then I'd be keen to make that happen.

As I said in a previous mail we do want to get a main net up and running
moving real value, even if that is limited to crypto for the most part, so
that we can generate an incentive for developers to build ILP into their
solutions.

On 9 November 2016 at 21:47, Paul Frazee <[email-masked]> wrote:

> On Wed, Nov 9, 2016 at 1:42 PM, Andrew Bransford Brown <[email-masked]
> > wrote:
>
>>> Perhaps this is better as a separate thread, but what sort of
>>> regulations should those who run virtual ledgers be thinking about? At the
>>> moment, we're talking about small p2p networks. But if I want to run a
>>> Bitcoin exchange or Ripple gateway in the United States, there are a number
>>> of KYC/AML regulations, possibly bitlicenses, and other things I have to
>>> worry about (including banking, which is not trivial for those doing
>>> business in the cryptocurrency ecosystem). What of this applies to running
>>> a virtual ledger in a p2p network?
>>>
>>> As an individual without many resources, how do I deal with the
>>> potential legal and financial pitfalls of running a virtual ledger? Just
>>> want to get the conversation started.
>>>
>>> Best,
>>>
>>> Tom
>>>
>>>
>>>
>>>>>> When the Internet was first emerging and large university and
>>>>>> research networks were coming together on the back of the Internet Protocol
>>>>>> the challenge for everyday users was how they could access this new network
>>>>>> of networks without special permission or equipment.
>>>>>>

---

From: Adrian Hope-Bailie <[email-masked]>
Date: Wed, 9 Nov 2016 23:06:13 +0200

> Perhaps what is needed now is a step-by-step guide? "How to run an
In the works! But also a task I'd love to see the community take on. The
code is currently being polished so if you run it and want to document the
experience to help others please do.

---

From: Adrian Hope-Bailie <[email-masked]>
Date: Wed, 9 Nov 2016 23:10:54 +0200

Hey Ryan,

Thanks for the offer!

What are your thoughts on how we'd do that? Is ripplepay.com still in
active use? Is there a migration path we could devise for the existing
network to ILP?

Adrian

---

From: Ryan Fugger <[email-masked]>
Date: Wed, 9 Nov 2016 14:01:06 -0800

> active use? Is there a migration path we could devise for the existing

There are some people using Ripplepay still, although it's not terribly
active -- about 15-20 payments per month over the last few months.  I'm
sure some of the dormant users could be revived if there were new
developments.

If ILP was easy enough to set up, the fastest thing would be a tool and/or
instructions on how to migrate their accounts over to ILP, assuming most or
all of their connections would also be moving.  If you wanted to offer
hosted ILP access, then redeveloping the site to allow connections to
external ILP servers might make sense.

---

From: Adrian Hope-Bailie <[email-masked]>
Date: Thu, 10 Nov 2016 00:08:08 +0200

This sounds like a really cool idea!

I think we should wait until the ilp-kit code is stable and a little more
mature and then we can work on a migration path for existing ripplepay.com
users who want to migrate.

Ito hosted ILP I think the best way to do this is just make it easy for
people to host themselves, even if they are not technical, through
something like Heroku.

Let's take this offline and work on a roadmap for this. We should probably
aim for Q1 2017?