Client help center

Understanding trust lines

When you open an account with a traditional bank, the bank holds funds on your behalf, accepting deposits and honoring withdrawal requests.  However, there isn’t a box in which your particular funds are stored.  Instead, your bank account is like an IOU — when you make a deposit, your funds go into the general pool, and the bank keeps track of how much it owes you.  Later on, you can make a withdrawal and the funds come out of that general pool, again updating your account balance.
In the same way, a Ripple issuer is able to hold funds on your behalf, and you are able to make use of those funds whenever you need them.  An issuer is needed whenever you want to receive payments in a currency other than XRP.
Just like you have to trust the bank to keep your money safe, you need to trust a Ripple issuer to hold your funds.  By extending trust to an issuer, you are telling the Ripple system that you trust that issuer to hold a certain amount of funds in a given currency for later redemption.  This is done by setting up a trust line within the Ripple system.
Note that when you set up a trust line, you really are trusting that issuer to hold your funds in that currency.  If the issuer reneges, for example because it goes out of business or decides not to honor a withdrawal request, then you can lose up the value of your trust line.
When setting up a trust line, make sure that you enter the appropriate Ripple address for the issuer.  Some issuers will have multiple Ripple addresses (for example, in the form of a hot wallet); make sure you use the address the issuer told you to trust, and that you trust the address for a currency that the issuer supports.
You can adjust or remove a trust line at any time.  Note that if the issuer is holding funds on your behalf and you reduce a trust line, the funds will not be affected, but you will be unable to receive further payments unless there is sufficient trust available.  If you reduce your trust line to zero and have no funds in that currency and issuer, the trust line will be removed.
Multiple Trust Lines for the Same Currency
If you trust multiple issuers for the same currency, and have funds in that currency held by one of those issuers, the Ripple system considers that you trust both of these issuers equally, and may automatically swap your currency in one of those issuers for the equivalent amount held by another issuer.  This won’t affect the total amount of the currency that you have, but that currency may swap from one issuer to another.
Ripple does this to fulfill payment requests — you are effectively providing liquidity between those two issuers for that currency.  For example, if you have $US 100 issued by XYZ, and trust both XYZ and ABC for $US, the Ripple system may take your $US100 and give it to someone else, swapping your $US from XYZ to ABC to fulfill a request for $US/XYZ.  You will still have $US 100, but it is now held by issuer ABC rather than issuer XYZ.
The Ripple client will warn you if you attempt to set up multiple trust lines for the same currency.  Above all, you should be sure that you fully trust all the issuers for who you create a trust line.
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  • 5a1ceecbcb84516051fe19e8e7c0fffd?
    Daniel Lachman

    It would be helpful to show some examples of trust lines. Can a bank be a trust and what would that look like?

  • 14f0d0c38b71602713d44e508a8aed05?
    Jérôme Hubert

    I can't understand all that. Perhaps because not translated in french... Where do i find "trusts", how could i trust someone i do not know ? Why may i send currencies to a trust instead of keeping it in a wallet ? Did i miss something ?

  • C106f7386742b7cf44f808142652a6be?
    Auth Snort

    Looks like Anna Tong is unable to explain things. She just gives examples of what "some people" may or may not do. She says, for example, "the easiest way". Well, is there a standard way; not easiest, not hardest, just standard routine? I am already spend hours for trying to understand how to put cash into my wallet, but so far in vain. After reading this paper regarding "trust lines", I see only some hints and analogies. No definition, no procedure can be found here

  • C106f7386742b7cf44f808142652a6be?
    Auth Snort

    Is anybody here aware about more reliable, better developed sources of information. maybe some tutorials, or webinars?

  • 5a1ceecbcb84516051fe19e8e7c0fffd?
    Daniel Lachman

    Auth, I spent a while this morning trying to find better information as well, only to find there are not clear distinct procedures about trust lines either.

    I think what is not made clear especially is what exactly are the consequences of trusting someone. If this could be addressed it would be helpful.

    I think me, Auth and others here understand the basic premise behind ripple linking different units of account, bridging finance like email, but we don't get how the trust line works or how potentially dangerous it is, and as such we don't have enough confidence to continue.

  • 5a1ceecbcb84516051fe19e8e7c0fffd?
    Daniel Lachman

    I realized it's still a beta, but it should be easy to use the product.

  • 2dd67d00e53cf553bdb94a2929c834b4?
    Steinar Kolnes

    Suggest they can exchange usd, eur to bitcoin and then to xrp.

  • Avatar-1393436217 (Get New Ripple Accounts Activated Fast!)

    If you cant add trust lines it might be because your have a new unconfirmed Ripple account. We can help you to activate it

  • Cccff5f19720026b7819fb51ec1b17aa?
    Brett Denaro

    I think Ripple needs to re-think the way they do this. I have had this Wallet for 8 months or so and am still NOT able to exchange one currency to another. It is way too confusing. If it were as revolutionary as they seem to think it is, I would simply select 'exchange 25,000 XRP for $X amount of US$ (whatever the exchange rate is at the time).' But instead, you have to create some kind of trust line, which makes no sense, regardless of how many times it is explained. Ive given up on Ripple. If the person who owns a wallet cannot figure out how to use it, it is not revolutionary!

  • Avatar-1393436217 (Get New Ripple Accounts Activated Fast!)

    did you try to post this on their forum? Ripple is expanding now in better customer service and more and I can hear what you say (I am NOT from!) and think a lot of things need to be communicated and explained better

  • 7cc40fdda9399d28d6789e884ed76bdd?
    Omni Kneeland

    Auth Snort, I'm with you. There's a concept explained here but no instructions on how to do a trust line. screenshots please? Also, I read up a bit and instead of mining, ripple just got one big issuance to the founders and they're going to spread the wealth? Correct me if I'm wrong, but isn't that a ridiculous way to fund a currency? The idea though of ious being passed around is much like Hawala.

  • Ba21daffe1931511383cd8589faae284?
    Erik E

    A lot of confusion here. I think I might be able to give an understandable explanation. You can test this yourself by making 2 wallets. Say I have a wallet A and B. I get the ripple address of A. Then I go to walled B. In the advanced tab I click the green "Add trust" button. I paste in the ripple address of A. Say I add a trust of 50 dollars.

    That means B thinks A is good for 50 dollars. Because of this A can send up to 50 dollars through the ripple network to B. Adding trust doesn't add any money to your wallet so both A and B will have 0 dollars in their ripple account. But because of the trust line, A can send e.g. 20 dollars to B. What happens then is that the dollar balance for B increases to +20 dollars and it drops to -20 dollars for A.

    What does this mean? It means A owes B 20 dollars. That is why B's balance is positive. This is what Anna Tong meant by holding currency for you. A is holding 20 dollars for B now, because A can't stuff a 20 dollar bill into the internet.

    Another way to look at it is that B walks over to A and gives him 20 phsyical dollars. Then he tells him keep this money for me. Instead of A and B writing down on paper what is owed, A sends B 20 dollars through ripple. This isn't any different from when you put money into a bank. They get your physical money and in return they update some numbers in your account to reflect the fact that they owe you that money.

    I think the confusion here, is that people like to think that when your bank account says a certain number that means you have that money in your account. But that is just a figure of speech. That account doesn't as a physical thing. The account is just information about what the bank owes you. The actual money is in a vault. Not in some physical thing called your bank account.

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