summaryrefslogtreecommitdiff
diff options
context:
space:
mode:
authorEric Voskuil <eric@voskuil.org>2019-07-01 11:52:57 -0700
committerbitcoindev <bitcoindev@gnusha.org>2019-07-01 18:53:01 +0000
commitdf8f4d8dba7b3919187c63f7b6e440b1d78f8ce7 (patch)
tree0c1b6961d134cc660f5319cc0574094e47f9e779
parentaef9a86ea5c1f5589a5701ca4b9d6f6c2bd37e33 (diff)
downloadpi-bitcoindev-df8f4d8dba7b3919187c63f7b6e440b1d78f8ce7.tar.gz
pi-bitcoindev-df8f4d8dba7b3919187c63f7b6e440b1d78f8ce7.zip
Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve
Diffstat
-rw-r--r--89/924bf8966b80107548a9de590f4d83f23eb630307
1 files changed, 307 insertions, 0 deletions
diff --git a/89/924bf8966b80107548a9de590f4d83f23eb630 b/89/924bf8966b80107548a9de590f4d83f23eb630
new file mode 100644
index 000000000..b6f26e4aa
--- /dev/null
+++ b/89/924bf8966b80107548a9de590f4d83f23eb630
@@ -0,0 +1,307 @@
+Return-Path: <eric@voskuil.org>
+Received: from smtp1.linuxfoundation.org (smtp1.linux-foundation.org
+ [172.17.192.35])
+ by mail.linuxfoundation.org (Postfix) with ESMTPS id 9FDABE5B
+ for <bitcoin-dev@lists.linuxfoundation.org>;
+ Mon, 1 Jul 2019 18:53:01 +0000 (UTC)
+X-Greylist: whitelisted by SQLgrey-1.7.6
+Received: from mail-pl1-f180.google.com (mail-pl1-f180.google.com
+ [209.85.214.180])
+ by smtp1.linuxfoundation.org (Postfix) with ESMTPS id 8AA26832
+ for <bitcoin-dev@lists.linuxfoundation.org>;
+ Mon, 1 Jul 2019 18:53:00 +0000 (UTC)
+Received: by mail-pl1-f180.google.com with SMTP id 9so7036832ple.5
+ for <bitcoin-dev@lists.linuxfoundation.org>;
+ Mon, 01 Jul 2019 11:53:00 -0700 (PDT)
+DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed;
+ d=voskuil-org.20150623.gappssmtp.com; s=20150623;
+ h=mime-version:subject:from:in-reply-to:date:cc
+ :content-transfer-encoding:message-id:references:to;
+ bh=0T2guO6OvItqnYeOm2p8xGjg6J8yIdelGxcN1QLSSr4=;
+ b=H0qN8gFiRVHmXRuOyBfqldrI3NL+E/d7JnYbL/wiTmiftQOaZ9KNFTCyXuN5OanrIP
+ cg6XGHnh5oL9HUtIncyqayFJuPfbs2bFVt2MlQYqWIsNSWzmn+YTbfVEV4aBMDomPlXP
+ 1HFoDFLyRgdZnk3JHgYqt0pdjHbZcWT8afVcabNSXPdZYobPNxQLpgB3ggP5uc8wPlNC
+ docnW4O9o/3cSx8yZhsIqq3rmTTZgRxSZERTnhmmSWu1JqFqJ0d9HPUyklfZtS/NDHka
+ j2HN7hb1uPdK8tKQFUlFdy410/ooEFL0ek4rweiepbQpAhrmag1aW4M9JDxQF5cyVRBm
+ MB1w==
+X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed;
+ d=1e100.net; s=20161025;
+ h=x-gm-message-state:mime-version:subject:from:in-reply-to:date:cc
+ :content-transfer-encoding:message-id:references:to;
+ bh=0T2guO6OvItqnYeOm2p8xGjg6J8yIdelGxcN1QLSSr4=;
+ b=d1d6usEWBBB0N/7jD1HaNRpKCbe1VM1hzQe/z9EPSAHBeCMF68OcUKGn5jByoF6yFu
+ jKEwGd5uSvCRxNSOfC9AshykOr5q0zDMyVJf5HuyaXaIPdUTyg5PXjatFQeYSAkz82RT
+ 0OXh+k8M8DVViNh+psH7RnCN0S/0o0VYBBAKBEhoK/vxy4Ef8p1qQp+bAPpJgLoHcPQi
+ gMGqnSUT3f+Hnwk0E0P4WECHmfbLW98LWGFciDzq8OsDov63/TLqpdNoEcm3SuRZnqUh
+ aPKCHGO59rsYkF1b9ww8Qk0aF8jYZ6KLfHzbmek0fFU9ndZgbVDIsB7qqjfSOkH+Y5Uc
+ P+Aw==
+X-Gm-Message-State: APjAAAVhTCI8E3W3BXULfRo/sp35Mv36tE+OPxr5JLMm/fVMGN0HJjjy
+ JFxK4saKd6S4XxyUbzMiLVuiHAegERw=
+X-Google-Smtp-Source: APXvYqx2k9Ow0d05/iVe8PQCQsYu7xnoFhDl+NyG/2ewQ022NIAHeNQCW4/sOMRwY7qUbbhHtyoo1w==
+X-Received: by 2002:a17:902:b20c:: with SMTP id
+ t12mr30928172plr.285.1562007179614;
+ Mon, 01 Jul 2019 11:52:59 -0700 (PDT)
+Received: from ?IPv6:2601:600:a080:16bb:34af:872a:acbd:cba8?
+ ([2601:600:a080:16bb:34af:872a:acbd:cba8])
+ by smtp.gmail.com with ESMTPSA id g1sm5268065pgg.27.2019.07.01.11.52.58
+ (version=TLS1_2 cipher=ECDHE-RSA-AES128-GCM-SHA256 bits=128/128);
+ Mon, 01 Jul 2019 11:52:58 -0700 (PDT)
+Content-Type: text/plain;
+ charset=utf-8
+Mime-Version: 1.0 (1.0)
+From: Eric Voskuil <eric@voskuil.org>
+X-Mailer: iPhone Mail (16F203)
+In-Reply-To: <0AA10217-E1CC-46D1-9B43-038CEEF942CD@gmail.com>
+Date: Mon, 1 Jul 2019 11:52:57 -0700
+Content-Transfer-Encoding: quoted-printable
+Message-Id: <E72C4A8E-F850-400B-B19B-7D06B8A169EC@voskuil.org>
+References: <0DBC0DEA-C999-4AEE-B2E1-D5337ECD9405@gmail.com>
+ <7A10C0F5-E206-43C1-853F-64AE04F57711@voskuil.org>
+ <EB743E28-8486-4CD5-B9AE-09B5693B27FA@gmail.com>
+ <708D14A9-D25E-4DD2-8B6E-39A1194A7A00@voskuil.org>
+ <1A808C88-63FD-4F45-8C95-2B8B4D99EDF5@gmail.com>
+ <83705370-79FC-4006-BA04-4782AD5BE70B@voskuil.org>
+ <BF027CD0-FE29-4DD1-AB96-DE92B597AD18@gmail.com>
+ <3F46CDD5-DA80-49C8-A51F-8066680EF347@voskuil.org>
+ <A4A6099F-F115-4CBF-B7D5-F16581476126@gmail.com>
+ <063D7C06-F5D8-425B-80CE-CAE03A1AAD0C@voskuil.org>
+ <0AA10217-E1CC-46D1-9B43-038CEEF942CD@gmail.com>
+To: Tamas Blummer <tamas.blummer@gmail.com>
+X-Spam-Status: No, score=-1.9 required=5.0 tests=BAYES_00,DKIM_SIGNED,
+ DKIM_VALID, MIME_QP_LONG_LINE,
+ RCVD_IN_DNSWL_NONE autolearn=ham version=3.3.1
+X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on
+ smtp1.linux-foundation.org
+X-Mailman-Approved-At: Mon, 01 Jul 2019 20:55:19 +0000
+Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
+Subject: Re: [bitcoin-dev] Generalized covenants with taproot enable
+ riskless or risky lending,
+ prevent credit inflation through fractional reserve
+X-BeenThere: bitcoin-dev@lists.linuxfoundation.org
+X-Mailman-Version: 2.1.12
+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: Mon, 01 Jul 2019 18:53:01 -0000
+
+It=E2=80=99s an exceedingly poor example. First, value is subjective. It mat=
+ters not what other people may consider, only those who act. Given that peop=
+le trade them (ICO tokens), they have value to those people. Second, the sce=
+nario would not function given that the value, as with money, is based on th=
+e ability to trade perpetually.
+
+I said that I would make no further comment given the belief that no new ide=
+as were surfacing. However, after giving it some more thought on my own, I b=
+elieve I have found the one case in which a person could value such encumber=
+ed coins.
+
+In the case of tracking an asset that becomes worthless at a specific time, o=
+ne could value a record of ownership, and the ability to trade ownership of t=
+he asset during the period. Consider colored coin type tracking of a theater=
+ ticket for a specific show, where the ticket is worthless by the end of the=
+ show.
+
+Now consider the value attributable to renting coin (e.g. to the tick issuer=
+) in order to track the ticket. First, there is no net value in renting coin=
+ to pay confirmation (mining) fees on transfers. The cost of a fee is driven=
+ by competition and remains the same whether the coin used for payment is en=
+cumbered or not. In other words, even with value in tracking there is no *co=
+st advantage* to renting of such coins for use as money.
+
+But tracking an asset in this manner has required not only a fee for each tr=
+ade, but also the burning of coin. By allowing the lender to recover the coi=
+n when the asset expires, this part of the cost of on-chain tracking can be t=
+ime-shared (rented), and without depreciation of the coin.
+
+In this case the lender is achieving both a time-locked hoard/speculation an=
+d a pre-paid rental return. The return to the lender would be the rental pri=
+ce minus the opportunity cost of not investing (ie, in production) this coin=
+ otherwise during that period. This is of course based on the economic princ=
+iple that both hoarding and speculation are expected to produce no predictab=
+le return. As such the cost of the rental would be driven (by competition) t=
+oward the cost of capital (e.g. annualized 10% of the coin price) for the sa=
+me period.=20
+
+Depending on the term, rental will be cheaper than the outright cost of burn=
+ing the same minimum amount of coin (i.e. dust+1, assuming policy compliance=
+) as required for tracking. As soon as the rental cost exceeds the minimum t=
+racking burn, rental becomes more expensive than just purchasing the coin. S=
+o, for example, at 10% market return on capital (rental cost), purchasing th=
+e coin is cheaper than rental at any tracking term beyond 7.2 years.
+
+As discussed previously, there can be no monetary value of such encumbered c=
+oins. And as shown above, the non-monetary (tracking) scenario is limited to=
+ fixed-term tracking. This use of Bitcoin would of course reduce the average=
+ cost of non-monetary blockchain storage. I=E2=80=99m not sure that is a use=
+ people want to facilitate with a protocol change, but that=E2=80=99s for th=
+e community to decide.
+
+Best,
+Eric
+
+> On Jun 30, 2019, at 13:26, Tamas Blummer <tamas.blummer@gmail.com> wrote:
+>=20
+> My argument does not need the comparison with ICOs.
+>=20
+> They were just an example that people pay for the utility of register even=
+ though others think the tokens they keep track of are worthless.
+>=20
+> Tamas Blummer
+>=20
+>=20
+>> On Jun 30, 2019, at 22:13, Eric Voskuil <eric@voskuil.org> wrote:
+>>=20
+>> ICO tokens can be traded (indefinitely) for other things of value, so the=
+ comparison isn=E2=80=99t valid. I think we=E2=80=99ve both made our points c=
+learly, so I=E2=80=99ll leave it at that.
+>>=20
+>> Best,
+>> Eric
+>>=20
+>>> On Jun 30, 2019, at 12:55, Tamas Blummer <tamas.blummer@gmail.com> wrote=
+:
+>>>=20
+>>>=20
+>>>> On Jun 30, 2019, at 20:54, Eric Voskuil <eric@voskuil.org> wrote:
+>>>>=20
+>>>> Could you please explain the meaning and utility of =E2=80=9Cunforgeabl=
+e register=E2=80=9D as it pertains to such encumbered coins?
+>>>=20
+>>> I guess we agree that some way of keeping track of ownership is prerequi=
+site for something to aquire value.
+>>> We likely also agree that the security of that ownership register has gr=
+eat influence to the value.
+>>>=20
+>>> The question remains if a register as utility in itself gives value to t=
+he thing needed to use that register.
+>>> I think it does, if people are interested in what it keeps track of, for=
+ whatever reason, even for reasons you find bogus.
+>>>=20
+>>> It was not intentional, but I think I just explained why Ethereum aquire=
+d higher market value by being register of ICO tokens.
+>>>=20
+>>> Now back to the coins encumbered with the debt covenant:
+>>> Transactions moving them constitute a register of covered debt and you n=
+eed them to update that register.
+>>> Should some people find such a register useful then those coins needed t=
+o update this register will aquire value.
+>>> Does not matter if you think the concept of covered debt is just as bogu=
+s as ICOs.
+>>>=20
+>>> Here some good news: If they aquire value then they offer a way to gener=
+ate income for hodler by temporarily giving up control.
+>>>=20
+>>> Tamas Blummer
+>>>=20
+>>>>=20
+>>>> The meaning in terms of Bitcoin is clear - the =E2=80=9Cowner=E2=80=9D o=
+f outputs that represent value (i.e. in the ability to trade them for someth=
+ing else) is recorded publicly and, given Bitcoin security assumptions, cann=
+ot be faked. What is not clear is the utility of a record of outputs that ca=
+nnot be traded for something else. You seem to imply that a record is valuab=
+le simply because it=E2=80=99s a record.
+>>>>=20
+>>>> e
+>>>>=20
+>>>>> On Jun 30, 2019, at 11:35, Tamas Blummer <tamas.blummer@gmail.com> wro=
+te:
+>>>>>=20
+>>>>>=20
+>>>>>> On Jun 30, 2019, at 19:41, Eric Voskuil <eric@voskuil.org> wrote:
+>>>>>>=20
+>>>>>>=20
+>>>>>>> On Jun 30, 2019, at 03:56, Tamas Blummer <tamas.blummer@gmail.com> w=
+rote:
+>>>>>>>=20
+>>>>>>> Hi Eric,
+>>>>>>>=20
+>>>>>>>> On Jun 29, 2019, at 23:21, Eric Voskuil <eric@voskuil.org> wrote:
+>>>>>>>>=20
+>>>>>>>> What loan? Alice has paid Bob for something of no possible utility t=
+o her, or anyone else.
+>>>>>>>=20
+>>>>>>> Coins encumbered with the described covenant represent temporary con=
+trol of a scarce resource.
+>>>>>>>=20
+>>>>>>> Can this obtain value? That depends on the availability of final con=
+trol and ability to deal with temporary control.
+>>>>>>=20
+>>>>>> For something to become property (and therefore have marketable value=
+) requires that it be both scarce and useful. Bitcoin is useful only to the e=
+xtent that it can be traded for something else that is useful. Above you are=
+ only dealing with scarcity, ignoring utility.
+>>>>>=20
+>>>>> There is a deeper utility of Bitcoin than it can be traded for somethi=
+ng else. That utility is to use its unforgeable register.
+>>>>> We have only one kind of units in this register and by having covenant=
+s we would create other kinds that are while encumbered not fungible with th=
+e common ones.
+>>>>>=20
+>>>>> Units are certainly less desirable if encumbered with a debt covenant.=
+ You say no one would assign them any value.
+>>>>>=20
+>>>>> I am not that sure as they still offer the utility of using the unforg=
+eable register, in this case a register of debt covered by reserves.
+>>>>> You also doubt forcing debt to be covered by reserves is a good idea, I=
+ got that, but suppose we do not discuss this here.
+>>>>> If there are people who think it is a good idea, then they would find h=
+aving an unforgeable register of it useful and therefore units needed to mai=
+ntain that register valuable to some extent.
+>>>>>=20
+>>>>>>=20
+>>>>>>> I think you do not show the neccesary respect of the market.
+>>>>>>=20
+>>>>>> I=E2=80=99m not sure what is meant here by respect, or how much of it=
+ is necessary. I am merely explaining the market.
+>>>>>=20
+>>>>> You are not explaining an existing market but claim that market that i=
+s not yet there will follow your arguments.
+>>>>>=20
+>>>>>>> Your rant reminds me of renowed economists who still argue final con=
+trol Bitcoin can not have value, you do the same proclaiming that temporary c=
+ontrol of Bitcoin can not have value.
+>>>>>>=20
+>>>>>> It seems to me you have reversed the meaning of temporary and final. B=
+itcoin is useful because of the presumption that there is no finality of con=
+trol. One presumes an ability to trade control of it for something else. Thi=
+s is temporary control. Final control would be the case in which, at some po=
+int, it can no longer be traded, making it worthless at that point. If this i=
+s known to be the case it implies that it it worthless at all prior points a=
+s well.
+>>>>>>=20
+>>>>>> These are distinct scenarios. The fact that temporary (in my usage) c=
+ontrol implies the possibility of value does not imply that finality of cont=
+rol does as well. The fact that (renowned or otherwise) people have made err=
+ors does not imply that I am making an error. These are both non-sequiturs.
+>>>>>>=20
+>>>>>>> I say, that temporary control does not have value until means dealin=
+g with it are offered, and that is I work on. Thereafter might obtain value i=
+f final control is deemed too expensive or not attainable, we shall see.
+>>>>>>=20
+>>>>>> The analogy to rental of a consumable good does not apply to the case=
+ of a non-consumable good. If it cannot be traded and cannot be consumed it c=
+annot obtain marketable value. To this point it matters not whether it exist=
+s.
+>>>>>=20
+>>>>> I meant with control the control of entries in the register which I th=
+ink is the deeper utility of Bitcoin. Final control is meant to be the oppos=
+ite of temporary which is the time limited control with some expiry.
+>>>>>=20
+>>>>> Thank you for your thoughts as they help to sharpen my arguments.
+>>>>>=20
+>>>>> Best,
+>>>>>=20
+>>>>> Tamas Blummer
+>>>>>=20
+>>>>>> Best,
+>>>>>> Eric
+>>>>>>=20
+>>>>>>> Tamas Blummer
+>=20
+
generated by cgit v1.2.3 (git 2.39.1) at 2025-04-30 07:03:35 +0000