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From: Eric Voskuil <eric@voskuil.org>
In-Reply-To: <BF027CD0-FE29-4DD1-AB96-DE92B597AD18@gmail.com>
Date: Sun, 30 Jun 2019 11:54:45 -0700
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To: Tamas Blummer <tamas.blummer@gmail.com>
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
Precedence: list

Could you please explain the meaning and utility of =E2=80=9Cunforgeable reg=
ister=E2=80=9D as it pertains to such encumbered coins?

The meaning in terms of Bitcoin is clear - the =E2=80=9Cowner=E2=80=9D of ou=
tputs that represent value (i.e. in the ability to trade them for something e=
lse) is recorded publicly and, given Bitcoin security assumptions, cannot be=
 faked. What is not clear is the utility of a record of outputs that cannot b=
e traded for something else. You seem to imply that a record is valuable sim=
ply because it=E2=80=99s a record.

e

> On Jun 30, 2019, at 11:35, Tamas Blummer <tamas.blummer@gmail.com> wrote:
>=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> wrote=
:
>>>=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 to h=
er, or anyone else.
>>>>=20
>>>=20
>>> Coins encumbered with the described covenant represent temporary control=
 of a scarce resource.
>>>=20
>>> Can this obtain value? That depends on the availability of final control=
 and ability to deal with temporary control.
>>=20
>> For something to become property (and therefore have marketable value) re=
quires that it be both scarce and useful. Bitcoin is useful only to the exte=
nt that it can be traded for something else that is useful. Above you are on=
ly dealing with scarcity, ignoring utility.
>=20
> There is a deeper utility of Bitcoin than it can be traded for something e=
lse. That utility is to use its unforgeable register.
> We have only one kind of units in this register and by having covenants we=
 would create other kinds that are while encumbered not fungible with the co=
mmon 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 unforgeabl=
e 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 go=
t that, but suppose we do not discuss this here.
> If there are people who think it is a good idea, then they would find havi=
ng an unforgeable register of it useful and therefore units needed to mainta=
in 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 n=
ecessary. I am merely explaining the market.
>>=20
>=20
> You are not explaining an existing market but claim that market that is no=
t yet there will follow your arguments.
>=20
>>> Your rant reminds me of renowed economists who still argue final control=
 Bitcoin can not have value, you do the same proclaiming that temporary cont=
rol of Bitcoin can not have value.
>>=20
>> It seems to me you have reversed the meaning of temporary and final. Bitc=
oin is useful because of the presumption that there is no finality of contro=
l. One presumes an ability to trade control of it for something else. This i=
s temporary control. Final control would be the case in which, at some point=
, it can no longer be traded, making it worthless at that point. If this is k=
nown to be the case it implies that it it worthless at all prior points as w=
ell.
>>=20
>> These are distinct scenarios. The fact that temporary (in my usage) contr=
ol implies the possibility of value does not imply that finality of control d=
oes as well. The fact that (renowned or otherwise) people have made errors d=
oes 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 dealing wi=
th it are offered, and that is I work on. Thereafter might obtain value if f=
inal 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 canno=
t obtain marketable value. To this point it matters not whether it exists.
>>=20
>=20
> I meant with control the control of entries in the register which I think i=
s the deeper utility of Bitcoin. Final control is meant to be the opposite o=
f 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
>>>=20
>=20