From: Tamas Blummer <tamas.blummer@gmail.com>
Message-Id: <BF027CD0-FE29-4DD1-AB96-DE92B597AD18@gmail.com>
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Date: Sun, 30 Jun 2019 20:35:33 +0200
In-Reply-To: <83705370-79FC-4006-BA04-4782AD5BE70B@voskuil.org>
To: Eric Voskuil <eric@voskuil.org>
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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


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> 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 her, 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) =
requires that it be both scarce and useful. Bitcoin is useful only to =
the extent that it can be traded for something else that is useful. =
Above you are only dealing with scarcity, ignoring utility.

There is a deeper utility of Bitcoin than it can be traded for something =
else. 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 common ones.

Units are certainly less desirable if encumbered with a debt covenant. =
You say no one would assign them any value.

I am not that sure as they still offer the utility of using the =
unforgeable 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 =
having an unforgeable register of it useful and therefore units needed =
to maintain that register valuable to some extent.

>=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 is =
not yet there will follow your arguments.

>> Your rant reminds me of renowed economists who still argue final =
control Bitcoin can not have value, you do the same proclaiming that =
temporary control of Bitcoin can not have value.
>=20
> 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. One presumes an ability to trade control of it for something =
else. This is 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 known to be the case it implies that it it =
worthless at all prior points as well.
>=20
> These are distinct scenarios. The fact that temporary (in my usage) =
control implies 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.
>=20
>> 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 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 cannot obtain marketable value. To this point it matters not whether =
it exists.
>=20

I meant with control the control of entries in the register which I =
think is the deeper utility of Bitcoin. Final control is meant to be the =
opposite of temporary which is the time limited control with some =
expiry.

Thank you for your thoughts as they help to sharpen my arguments.

Best,

Tamas Blummer

> Best,
> Eric
>=20
>> Tamas Blummer
>>=20
>>=20


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