Feedback-ID: i525146e8:Fastmail
Date: Thu, 7 Jul 2022 10:12:41 -0400
From: Peter Todd <pete@petertodd.org>
To: John Carvalho <john@synonym.to>,
 Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Message-ID: <Ysbp2QclWW7NzfrS@petertodd.org>
References: <mailman.9.1657195203.20624.bitcoin-dev@lists.linuxfoundation.org>
 <CAHTn92wR+D=2FLAc7vhhm4kNT6NwDfyKdRj32=E9H3UJ4QcE+Q@mail.gmail.com>
MIME-Version: 1.0
Content-Type: multipart/signed; micalg=pgp-sha512;
 protocol="application/pgp-signature"; boundary="aSuM8JSyjjK7hGNT"
Content-Disposition: inline
In-Reply-To: <CAHTn92wR+D=2FLAc7vhhm4kNT6NwDfyKdRj32=E9H3UJ4QcE+Q@mail.gmail.com>
Subject: Re: [bitcoin-dev] Bitcoin covenants are inevitable
Precedence: list


--aSuM8JSyjjK7hGNT
Content-Type: text/plain; charset=us-ascii
Content-Disposition: inline
Content-Transfer-Encoding: quoted-printable

On Thu, Jul 07, 2022 at 02:24:39PM +0100, John Carvalho via bitcoin-dev wro=
te:
> Billy,
>=20
> Proof of work and the difficulty adjustment function solve literally
> everything you are talking about already.

Unfortunately you are quite wrong: the difficulty adjustment function merely
adjusts for changes in the amount of observable, non-51%-attacking, hashing
power. In the event of a chain split, the difficulty adjustment function do=
es
nothing; against a 51% attacker, the difficulty adjustment does nothing;
against a censor, the difficulty adjustment does nothing.

We should not imbue real technology with magical qualities.

> Bitcoin does not need active economic governanance by devs or meddlers.

Yes, active governance would definitely be an exploitable mechanism. On the
other hand, the status quo of the block reward eventually going away entire=
ly
is obviously a risky state change too.

> > > There is also zero agreement on how much security would constitute su=
ch
> > an optimum.
> >
> > This is really step 1. We need to generate consensus on this long before
> > the block subsidy becomes too small. Probably in the next 10-15 years. I
> > wrote a paper

The fact of the matter is that the present amount of security is about 1.7%=
 of
the total coin supply/year, and Bitcoin seems to be working fine. 1.7% is a=
lso
already an amount low enough that it's much smaller than economic volatilit=
y.

Obviously 0% is too small.

There's zero reason to stress about finding an "optimal" amount. An amount =
low
enough to be easily affordable, but non-zero, is fine. 1% would be fine; 0.=
5%
would probably be fine; 0.1% would probably be fine.

Over a lifetime - 75 years - 0.5% yearly inflation works out to be a 31% ta=
x on
savings; 0.1% works out to be 7.2%

These are all amounts that are likely to be dwarfed by economic shifts.

--=20
https://petertodd.org 'peter'[:-1]@petertodd.org

--aSuM8JSyjjK7hGNT
Content-Type: application/pgp-signature; name="signature.asc"

-----BEGIN PGP SIGNATURE-----

iQIzBAEBCgAdFiEE0RcYcKRzsEwFZ3N5Lly11TVRLzcFAmLG6dcACgkQLly11TVR
LzfHRQ//dCSdHeUKwvpEN4kUI5n8riCjOzFbzf7DtGjZ8mr5JKk99Y5dvNSt43E0
x5B+fp0jt6NPoQkQ9d/gMChdloyeCpIzI0q5t6upVWWIejE/lE109OhaZJxW2/Fm
8iDZjPbx0agvzxktmsEYoOQ7UHzEz1J78GrhlE3uuR80QY/8YwNvL6348Ycxgzi9
0XdZX5yf9grl1gAJldx5icTHIo0hNEpWQZye2SnLda9NrLPSKgE5UcDSIEIBJBfv
F5HELWV5Gf0F/ruxC70kXUMx+qlIk/Nao6bvEy31YkYStA3GlWo5ZmnuyvdnQ4yr
JuZwQJw/R2RiiOYsK8TMbB7kXwYD3Gzt6QW+bhXpty3K0sKT/70FT2VE+NdMXFNT
EqxJK9AYuUK3WTLZSOda9Ny/eBK3RDMkWbXdxMXAPOsW86BC3j5+KzzSSmIVpU0j
URaqcE0XfXWBvCz+LFH8Mvkxi7xS9kro/XXXzLVO6ZSrpw8z5MmMPy6HdruWZbp2
VpLcaANBFxGUrFbh/zvMJB03vAU8peRtfwWodn9ynWymb38DlZsBZyg2uejnKjYv
ghPGxPdAEXbm/zSWmnVU9jhN/0+7DA7+r0pk8+l6t4iOdqu46l/K8CRxkwKlIOSA
bcTYYeZthY7iTEABS+RNAx/vzP54bxywpPg9HGy/zKmKCT/sDpE=
=I1Dy
-----END PGP SIGNATURE-----

--aSuM8JSyjjK7hGNT--