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author | Kate Salazar <mercedes.catherine.salazar@gmail.com> | 2022-06-29 12:44:11 +0200 |
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committer | bitcoindev <bitcoindev@gnusha.org> | 2022-06-29 10:44:26 +0000 |
commit | 26bfd38421c36fd4b72f97b71eccf6429d9a2406 (patch) | |
tree | 66f391ba3324481f08914ceb7f5d1b2ee53c2028 | |
parent | ff64e06dd3b4a3bf89893b0cd475df688d769e2e (diff) | |
download | pi-bitcoindev-26bfd38421c36fd4b72f97b71eccf6429d9a2406.tar.gz pi-bitcoindev-26bfd38421c36fd4b72f97b71eccf6429d9a2406.zip |
Re: [bitcoin-dev] Bitcoin covenants are inevitable
-rw-r--r-- | 4f/62b240bbd4db7ccf7ea51c920364dd5bdbce6f | 375 |
1 files changed, 375 insertions, 0 deletions
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boundary="0000000000001e8b9c05e293d683" +X-Mailman-Approved-At: Wed, 29 Jun 2022 10:51:25 +0000 +Subject: Re: [bitcoin-dev] Bitcoin covenants are inevitable +X-BeenThere: bitcoin-dev@lists.linuxfoundation.org +X-Mailman-Version: 2.1.15 +Precedence: list +List-Id: Bitcoin Protocol Discussion <bitcoin-dev.lists.linuxfoundation.org> +List-Unsubscribe: <https://lists.linuxfoundation.org/mailman/options/bitcoin-dev>, + <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=unsubscribe> +List-Archive: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/> +List-Post: <mailto:bitcoin-dev@lists.linuxfoundation.org> +List-Help: <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=help> +List-Subscribe: <https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev>, + <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=subscribe> +X-List-Received-Date: Wed, 29 Jun 2022 10:44:26 -0000 + +--0000000000001e8b9c05e293d683 +Content-Type: text/plain; charset="UTF-8" + +Hey + +On Tue, Jun 28, 2022 at 10:43 AM Billy Tetrud via bitcoin-dev < +bitcoin-dev@lists.linuxfoundation.org> wrote: + +> @Eric +> > People who transact are realizing the benefit of money - the avoidance +> of barter costs. +> +> I'm very confident you're incorrect that holders don't receive any benefit +> and you're certainly not correct that every spend is receiving the same +> benefit. As I'm sure you're aware, one of the primary components of a +> currency's value and purpose is as a store of value. Storing value happens +> while you're holding it, not while you're spending it. Consider the +> following two scenarios: one person holds onto 10 bitcoin for 10 years and +> then spends those 10 bitcoins in some way in 2 transactions. Another person +> spends 4 bitcoins to buy something, then sells it for 6 bitcoins, and then +> buys something else for that 6 bitcoins and then never acquires any bitcoin +> for 10 years. +> +> Both people spent 10 bitcoins over 2 transactions. Over that 10 year +> period, only one of those people utilized bitcoin's utility as a store of +> value. Who benefited more from their use of bitcoin? +> +> > Those who never transact, never realize any benefit. +> +> While that's true, its not relevant and basically a red herring. You need +> to compare those who transact often and rarely hold, to those who hold a +> lot but rarely transact. Its not helpful to consider those who throw their +> bitcoin into a bottomless pit and never retrieve them. +> +> On an idealistic level, I agree with Keagan that it would make sense to +> have "a balance of fees to that effect". I think doing that would be +> technically/economically optimal. However, I think there is an enormous +> benefit to having a cultural aversion to monetary inflation and the +> consequences of convincing the bitcoin community that inflation is ok could +> have unintended negative consequences (not to mention how difficult +> convincing the community would be in the first place). There's also the +> economic distortion that inflation causes that has a negative effect which +> should also be considered. The idea of decaying utxo value is interesting +> to consider, but it would not solve the economic distortion that +> monetary inflation causes, because that distortion is a result of monetary +> devaluation (which decaying utxos would be a form of). Then again, maybe in +> this case the distortion of inflation would actually be a correction - +> correcting for the externality of benefit received by holders. I'm +> stream-of-consciousnessing a bit, but anyways, I suspect its not worth the +> trouble to perfect the distribution of bitcoin blockchain security costs to +> include holders. Tho, if I were to go back in time and influence how +> bitcoin was designed, I might advocate for it. +> + +Pool operators are free to request larger fees from older utxos, or from +all utxos, or from newer utxos, at their judgement, looking at the +blockspace demand census and at what the other pool operators are doing. +This is not consensus, it's policy. It's not a technology problem, it's +solved above in the social layer. + +If this kind of problem torments anyone, maybe miner decentralization hard +forks are worth looking at, some already exist. + + +> +> @Peter +> > demurrage and inflation have identical economic properties. +> +> The distortion of incentives is identical, however there is also the +> effect it has on a currency's property as a useful unit of account. +> Decaying utxos would mean that it would contribute substantially less to +> market prices needing to change. I suspect this effect would be bordering +> on negligible tho. +> +> On Thu, Jun 23, 2022 at 2:17 PM Peter Todd via bitcoin-dev < +> bitcoin-dev@lists.linuxfoundation.org> wrote: +> +>> On Tue, Jun 21, 2022 at 01:00:07PM -0600, Keagan McClelland via +>> bitcoin-dev wrote: +>> > > The PoW security of Bitcoin benefits all Bitcoin users, proportional +>> to +>> > the +>> > value of BTC they hold; if Bitcoin blocks aren't reliably created the +>> value +>> > of +>> > *all* BTC goes down. It doesn't make sense for the entire cost of that +>> > security +>> > to be paid for on a per-tx basis. And there's a high chance paying for +>> it +>> > on a +>> > per-tx basis won't work anyway due to lack of consistent demand. +>> > +>> > FWIW I prefer the demurrage route. Having something with finite supply +>> as a +>> > means of measuring economic activity is unprecedented and I believe +>> deeply +>> > important. I'm sympathetic to the argument that the security of the +>> chain +>> > should not be solely the responsibility of transactors. We realize the +>> > value of money on receipt, hold *and* spend and it would be appropriate +>> for +>> > there to be a balance of fees to that effect. While inflation may be +>> > simpler to implement (just chop off the last few halvings), I think it +>> > would be superior (on the assumption that such a hodl tax was +>> necessary) to +>> > keep the supply fixed and have people's utxo balances decay, at least at +>> > the level of the UX. +>> +>> Demurrage makes protocols like Lightning much more complex, and isn't +>> compatible with existing implementations. While demurrage could in theory +>> be +>> implemented in a soft-fork by forcing txs to contain an output with the +>> demurrage-taxed amount, spending to a pool of future mining fees, I really +>> don't think it's practical to actually do that. +>> +>> Anyway, demurrage and inflation have identical economic properties. +>> They're +>> both a tax on savings. The only difference is the way that tax is +>> implemented. +>> +>> -- +>> https://petertodd.org 'peter'[:-1]@petertodd.org +>> _______________________________________________ +>> bitcoin-dev mailing list +>> bitcoin-dev@lists.linuxfoundation.org +>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev +>> +> _______________________________________________ +> bitcoin-dev mailing list +> bitcoin-dev@lists.linuxfoundation.org +> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev +> + +--0000000000001e8b9c05e293d683 +Content-Type: text/html; charset="UTF-8" +Content-Transfer-Encoding: quoted-printable + +<div dir=3D"ltr"><div dir=3D"ltr">Hey</div><br><div class=3D"gmail_quote"><= +div dir=3D"ltr" class=3D"gmail_attr">On Tue, Jun 28, 2022 at 10:43 AM Billy= + Tetrud via bitcoin-dev <<a href=3D"mailto:bitcoin-dev@lists.linuxfounda= +tion.org">bitcoin-dev@lists.linuxfoundation.org</a>> wrote:<br></div><bl= +ockquote class=3D"gmail_quote" style=3D"margin:0px 0px 0px 0.8ex;border-lef= +t:1px solid rgb(204,204,204);padding-left:1ex"><div dir=3D"ltr"><div>@Eric<= +br></div>>=C2=A0 + +People who transact are realizing the benefit of money - the avoidance of b= +arter costs.=C2=A0<div><br></div><div>I'm very confident you're inc= +orrect that=C2=A0holders=C2=A0don't receive any benefit and you're = +certainly not correct that=C2=A0every=C2=A0spend is receiving the same bene= +fit. As I'm sure you're aware, one of the primary components of a c= +urrency's value and purpose is as a store of=C2=A0value. Storing value = +happens while you're holding it, not while you're spending it. Cons= +ider the following two scenarios: one person holds onto 10 bitcoin for 10 y= +ears and then spends those 10 bitcoins in=C2=A0some way in 2 transactions. = +Another person spends 4 bitcoins to buy something, then sells it for 6 bitc= +oins, and then buys something else for that 6 bitcoins and then never acqui= +res any bitcoin for 10 years.=C2=A0</div><div><br></div><div>Both people sp= +ent 10 bitcoins over 2 transactions. Over that 10 year period, only one of = +those people utilized bitcoin's utility as a store of value. Who benefi= +ted more from their use of bitcoin?=C2=A0</div><div><br></div><div>> Tho= +se who never transact, never realize any benefit.</div><div><br></div><div>= +While that's true, its not relevant and basically a red herring. You ne= +ed to compare those who transact often and rarely hold, to those who hold a= + lot but rarely transact. Its=C2=A0not helpful to consider those who throw = +their bitcoin into a bottomless pit and never retrieve them.</div><div><br>= +</div><div>On an idealistic level, I agree with Keagan that it would make s= +ense to have "a balance of fees to that effect". I think doing th= +at would be technically/economically optimal. However, I think there is an = +enormous benefit to having a cultural aversion to monetary inflation and th= +e consequences of convincing the bitcoin community that inflation is ok cou= +ld have unintended negative consequences (not to mention how difficult conv= +incing the community would be in the first place). There's also the eco= +nomic distortion that inflation causes that has a negative effect which sho= +uld also be considered. The idea of decaying utxo value is interesting to c= +onsider, but it would not solve the economic distortion that monetary=C2=A0= +inflation causes,=C2=A0because that=C2=A0distortion is a result of monetary= + devaluation (which decaying=C2=A0utxos would be a form of). Then again, ma= +ybe in this case the distortion of inflation would actually be a correction= + - correcting for the externality of benefit received by holders. I'm s= +tream-of-consciousnessing=C2=A0a bit, but anyways, I suspect its not worth = +the trouble to perfect the distribution of bitcoin blockchain security cost= +s to include holders. Tho, if I were to go back in time and influence how b= +itcoin was designed, I might advocate for it.</div></div></blockquote><div>= +<br></div><div>Pool operators are free to request larger fees from older ut= +xos, or from all utxos, or from newer utxos, at their judgement, looking at= + the blockspace demand census and at what the other pool operators are doin= +g. This is not consensus, it's policy. It's not a technology proble= +m, it's solved above in the social layer.</div><div><br></div><div>If t= +his kind of problem torments anyone, maybe miner decentralization hard fork= +s are worth looking at, some already=C2=A0exist.</div><div>=C2=A0</div><blo= +ckquote class=3D"gmail_quote" style=3D"margin:0px 0px 0px 0.8ex;border-left= +:1px solid rgb(204,204,204);padding-left:1ex"><div dir=3D"ltr"><div><br></d= +iv><div>@Peter<br></div><div>> demurrage and inflation have identical ec= +onomic properties.=C2=A0</div><div><br></div><div>The distortion of incenti= +ves is identical, however there is also the effect it has on a currency'= +;s property as a useful unit of account. Decaying utxos would mean that it = +would contribute substantially less to market prices needing to change. I s= +uspect this effect would be bordering on negligible tho.=C2=A0</div></div><= +br><div class=3D"gmail_quote"><div dir=3D"ltr" class=3D"gmail_attr">On Thu,= + Jun 23, 2022 at 2:17 PM Peter Todd via bitcoin-dev <<a href=3D"mailto:b= +itcoin-dev@lists.linuxfoundation.org" target=3D"_blank">bitcoin-dev@lists.l= +inuxfoundation.org</a>> wrote:<br></div><blockquote class=3D"gmail_quote= +" style=3D"margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);= +padding-left:1ex">On Tue, Jun 21, 2022 at 01:00:07PM -0600, Keagan McClella= +nd via bitcoin-dev wrote:<br> +> > The PoW security of Bitcoin benefits all Bitcoin users, proportio= +nal to<br> +> the<br> +> value of BTC they hold; if Bitcoin blocks aren't reliably created = +the value<br> +> of<br> +> *all* BTC goes down. It doesn't make sense for the entire cost of = +that<br> +> security<br> +> to be paid for on a per-tx basis. And there's a high chance paying= + for it<br> +> on a<br> +> per-tx basis won't work anyway due to lack of consistent demand.<b= +r> +> <br> +> FWIW I prefer the demurrage route. Having something with finite supply= + as a<br> +> means of measuring economic activity is unprecedented and I believe de= +eply<br> +> important. I'm sympathetic to the argument that the security of th= +e chain<br> +> should not be solely the responsibility of transactors. We realize the= +<br> +> value of money on receipt, hold *and* spend and it would be appropriat= +e for<br> +> there to be a balance of fees to that effect. While inflation may be<b= +r> +> simpler to implement (just chop off the last few halvings), I think it= +<br> +> would be superior (on the assumption that such a hodl tax was necessar= +y) to<br> +> keep the supply fixed and have people's utxo balances decay, at le= +ast at<br> +> the level of the UX.<br> +<br> +Demurrage makes protocols like Lightning much more complex, and isn't<b= +r> +compatible with existing implementations. While demurrage could in theory b= +e<br> +implemented in a soft-fork by forcing txs to contain an output with the<br> +demurrage-taxed amount, spending to a pool of future mining fees, I really<= +br> +don't think it's practical to actually do that.<br> +<br> +Anyway, demurrage and inflation have identical economic properties. They= +9;re<br> +both a tax on savings. The only difference is the way that tax is implement= +ed.<br> +<br> +-- <br> +<a href=3D"https://petertodd.org" rel=3D"noreferrer" target=3D"_blank">http= +s://petertodd.org</a> 'peter'[:-1]@<a href=3D"http://petertodd.org"= + rel=3D"noreferrer" target=3D"_blank">petertodd.org</a><br> +_______________________________________________<br> +bitcoin-dev mailing list<br> +<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" target=3D"_blank">= +bitcoin-dev@lists.linuxfoundation.org</a><br> +<a href=3D"https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev" = +rel=3D"noreferrer" target=3D"_blank">https://lists.linuxfoundation.org/mail= +man/listinfo/bitcoin-dev</a><br> +</blockquote></div> +_______________________________________________<br> +bitcoin-dev mailing list<br> +<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" target=3D"_blank">= +bitcoin-dev@lists.linuxfoundation.org</a><br> +<a href=3D"https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev" = +rel=3D"noreferrer" target=3D"_blank">https://lists.linuxfoundation.org/mail= +man/listinfo/bitcoin-dev</a><br> +</blockquote></div></div> + +--0000000000001e8b9c05e293d683-- + |