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From: Eric Voskuil <eric@voskuil.org>
In-Reply-To: <1A808C88-63FD-4F45-8C95-2B8B4D99EDF5@gmail.com>
Date: Sun, 30 Jun 2019 10:41:33 -0700
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	<7A10C0F5-E206-43C1-853F-64AE04F57711@voskuil.org>
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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


> 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 her=
, or anyone else.
>>=20
>=20
> Coins encumbered with the described covenant represent temporary control o=
f a scarce resource.
>=20
> Can this obtain value? That depends on the availability of final control a=
nd ability to deal with temporary control.

For something to become property (and therefore have marketable value) requi=
res that it be both scarce and useful. Bitcoin is useful only to the extent t=
hat it can be traded for something else that is useful. Above you are only d=
ealing with scarcity, ignoring utility.

> An example where final control is not available are areas and jurisdiction=
s where land can not be bought only long time rents are offered.
> People pay high prices there to step in place of the renter in an existing=
 long term rent contract and they figured out the contracts that work under t=
hese restrictions.

I was careful to point out that bitcoin is not in any way consumable. Occupy=
ing scarce land is a service to people. Units of bitcoin encumbered such tha=
t they cannot be traded for something of service to a person do not constitu=
te property. You cannot even polish them, stack them on the floor, and roll a=
round on them.

> Bitcoin=E2=80=99s predominant use is already store of value. Many assume n=
ot only wealth preservation but that it would allow to purchase of more good=
s in the future than now.

Yet it has been established that these encumbered coins cannot purchase anyt=
hing of value except to the extent that an imperfect market is unaware of th=
e scam.

> This leads to unwillingnes to give up final control, which can resolve in t=
wo ways:
>=20
> - Increasing fiat prices for final control. We see this, and is actually f=
urther reinforcing unwillingnes to give up final control.
> - dealing with temporary control. We do not yet have the technical means o=
f even representing this. Developing them is my goal.

Your goal is clear and not at issue.

> I think you do not show the neccesary respect of the market.

I=E2=80=99m not sure what is meant here by respect, or how much of it is nec=
essary. I am merely explaining the market.

> Your rant reminds me of renowed economists who still argue final control B=
itcoin can not have value, you do the same proclaiming that temporary contro=
l of Bitcoin can not have value.

It seems to me you have reversed the meaning of temporary and final. Bitcoin=
 is useful because of the presumption that there is no finality of control. O=
ne presumes an ability to trade control of it for something else. This is te=
mporary 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 know=
n to be the case it implies that it it worthless at all prior points as well=
.

These are distinct scenarios. The fact that temporary (in my usage) control i=
mplies the possibility of value does not imply that finality of control does=
 as well. The fact that (renowned or otherwise) people have made errors does=
 not imply that I am making an error. These are both non-sequiturs.

> I say, that temporary control does not have value until means dealing with=
 it are offered, and that is I work on. Thereafter might obtain value if fin=
al control is deemed too expensive or not attainable, we shall see.

The analogy to rental of a consumable good does not apply to the case of a n=
on-consumable good. If it cannot be traded and cannot be consumed it cannot o=
btain marketable value. To this point it matters not whether it exists.

Best,
Eric

> Tamas Blummer
>=20
>=20