Return-Path: Received: from smtp2.osuosl.org (smtp2.osuosl.org [IPv6:2605:bc80:3010::133]) by lists.linuxfoundation.org (Postfix) with ESMTP id 8BB14C0032 for ; Sun, 5 Nov 2023 15:00:00 +0000 (UTC) Received: from localhost (localhost [127.0.0.1]) by smtp2.osuosl.org (Postfix) with ESMTP id 65C38400F9 for ; Sun, 5 Nov 2023 15:00:00 +0000 (UTC) DKIM-Filter: OpenDKIM Filter v2.11.0 smtp2.osuosl.org 65C38400F9 Authentication-Results: smtp2.osuosl.org; dkim=pass (2048-bit key) header.d=gmail-com.20230601.gappssmtp.com header.i=@gmail-com.20230601.gappssmtp.com header.a=rsa-sha256 header.s=20230601 header.b=LuiwL66N X-Virus-Scanned: amavisd-new at osuosl.org X-Spam-Flag: NO X-Spam-Score: -1.399 X-Spam-Level: X-Spam-Status: No, score=-1.399 tagged_above=-999 required=5 tests=[BAYES_00=-1.9, DKIM_SIGNED=0.1, DKIM_VALID=-0.1, FREEMAIL_FORGED_FROMDOMAIN=0.25, FREEMAIL_FROM=0.001, HEADER_FROM_DIFFERENT_DOMAINS=0.249, HTML_MESSAGE=0.001, RCVD_IN_DNSWL_NONE=-0.0001, SPF_HELO_NONE=0.001, SPF_PASS=-0.001] autolearn=no autolearn_force=no Received: from smtp2.osuosl.org ([127.0.0.1]) by localhost (smtp2.osuosl.org [127.0.0.1]) (amavisd-new, port 10024) with ESMTP id 2Ao4fwR7hqWP for ; Sun, 5 Nov 2023 14:59:58 +0000 (UTC) Received: from mail-yb1-xb31.google.com (mail-yb1-xb31.google.com [IPv6:2607:f8b0:4864:20::b31]) by smtp2.osuosl.org (Postfix) with ESMTPS id 5DB47400CB for ; Sun, 5 Nov 2023 14:59:58 +0000 (UTC) DKIM-Filter: OpenDKIM Filter v2.11.0 smtp2.osuosl.org 5DB47400CB Received: by mail-yb1-xb31.google.com with SMTP id 3f1490d57ef6-da34f90f6e3so784253276.0 for ; Sun, 05 Nov 2023 06:59:58 -0800 (PST) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=gmail-com.20230601.gappssmtp.com; s=20230601; t=1699196397; x=1699801197; darn=lists.linuxfoundation.org; h=cc:to:subject:message-id:date:from:in-reply-to:references :mime-version:from:to:cc:subject:date:message-id:reply-to; bh=6orA4tAxu2o4VrKD3wJKKQnf3TZc/gBgmFxV0ZYPb3M=; b=LuiwL66NisYvYoS5eBlNW/yywATWxgNhXNftYv+gDWFw/QLaabnwF236HXA4rRYLUP pC1ZgOJ/fkSorxOslSBrRBWBFZFuFO/10u/1jWqmJaDQ2cpqCB7QPMXiOCw3nRMiuFrg cecQ6bKHocc63aPsT7xql3hX46BDXrq7vuzIjV+rzJPXl91uVCdtEylBSKxfkCoZsW5H LRqB8JVIO02R9NZ+M3ta2ToM0frb72Zn8sAutaMFmx3zaj+9bTJQi1N7jgOvOEa9+BlB PA385JGg08hiQcVFLpxbT/W4gz9YU5+q/6oC9JijL2owAKY2MDXrwwt5HIw320OOV53+ R+QQ== X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=1e100.net; s=20230601; t=1699196397; x=1699801197; h=cc:to:subject:message-id:date:from:in-reply-to:references :mime-version:x-gm-message-state:from:to:cc:subject:date:message-id :reply-to; bh=6orA4tAxu2o4VrKD3wJKKQnf3TZc/gBgmFxV0ZYPb3M=; b=qTskeW6ydrs+TndUev1/5VSa5V+YftqbdW2IhHVA4wsN7UEd234lVuBmUI2ygZfL4M l8ojdFwThcB7TR2xqymHxnfJ6ZOA5VMgZ71NIhPZ2O2/BqN8mRTK4eP2Zp0V85zKZCRw osdRJpwKs6e68gC5qjuz1YdSngnMeTQcW/9cCubICYjiIUHzktgUf35YMJDmsEW9On3x 7Eyp01SsCQ1g9QYqKNHD2xq/p/EBfVE2TKlDse5DCpU/+5zKkJCisxxp9kG3mpNrcz1D MKf2vsDAp6TDJIL8B+fmAWfGuGYphgHFshvFmCV9g+BeDPkZlYNSwOXL536Kn3o+s1BH 00sg== X-Gm-Message-State: AOJu0YyCwPloRwoc4YzFsysi308+KAQMgYVoGOrv97lYPzAJph26GzHB Qqn6KycQaxyoXo2p9Xcoiw130WNGC3T1YOHuLkb3hwMEXBeU X-Google-Smtp-Source: AGHT+IEREdgLdOCoZpK220zOGh1aLTF2pBmfpX63pLo5pwaM3e4jyo+G0tiymMzgzxFJxGoZIjMioTAqqcm3T+VRqPs= X-Received: by 2002:a25:ac54:0:b0:da0:ce6d:46b9 with SMTP id r20-20020a25ac54000000b00da0ce6d46b9mr18751453ybd.1.1699196396743; Sun, 05 Nov 2023 06:59:56 -0800 (PST) MIME-Version: 1.0 References: <21dd55af-ca9d-48b0-b2aa-4a1399f15611@op.pl> In-Reply-To: <21dd55af-ca9d-48b0-b2aa-4a1399f15611@op.pl> From: Erik Aronesty Date: Sun, 5 Nov 2023 09:59:44 -0500 Message-ID: To: JK Content-Type: multipart/alternative; boundary="000000000000a1b01a060968fdb8" X-Mailman-Approved-At: Sun, 05 Nov 2023 15:00:57 +0000 Cc: Bitcoin Protocol Discussion Subject: Re: [bitcoin-dev] ossification and misaligned incentive concerns X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.15 Precedence: list List-Id: Bitcoin Protocol Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Sun, 05 Nov 2023 15:00:00 -0000 --000000000000a1b01a060968fdb8 Content-Type: text/plain; charset="UTF-8" I don't believe the narrative that miners provide network security they provide double spend insurance and that's it so that limits the size of the transaction and the number of confirmations that are required before that transaction is cleared But it doesn't provide security for the rest of the network. My private keys are private and my note is fully validating .. and there's nothing miners can do about that let's ditch that narrative please On Sun, Nov 5, 2023, 9:40 AM JK wrote: > > I'm worried even more about something else, but still fits into the same > topic category. > > > A tax in the form of a direct tax is less acceptable to people than a > hidden tax. This is human nature, as the saying goes, "What the eye > doesn't see, the heart doesn't grieve over." A high direct tax (e.g., on > a one-time transaction) is much more irritating than a tax of the same > amount but hidden (especially when it affects all cash holders equally, > as in the case of inflation). > > There is no reason to believe that in any alternative financial system, > it will be different ("This time is different." No, it is not.) > > The analogy is clear: a transaction tax is on-chain fee, an inflation > tax is the block reward. And just in case: miners are only able to > collect payment for providing network security in an amount equal to the > sum collected in both of these taxes, and no single satoshi more (the > principle that "There's no such thing as a free lunch" applies). > > Now, a little thought experiment: > Imagine a system that tries to maintain a constant level of difficulty > and reacts flexibly to changes in difficulty, by modulating the block > reward level accordingly (using negative feedback). > > It is known that the system will oscillate around a certain level of the > block reward value (around a certain level of inflation) that provides > the desired level of network security. > > Furthermore, Earth is a closed system with finite resources, making it > hard to imagine a situation where Bitcoin is responsible for e.g. 95% > of global energy consumption (while complaints already arise at 0.1%). > > In other words, the level of network security is de facto limited from > the top, whether we like it or not. > > And for a naturally limited and still acceptable level of network > security (vide: "Change the code, not the climate") - there is a > corresponding level of inflation. > > > To sum this up, the most important conclusion to remember is: > > For a natural level of network security, there is a natural level of > inflation. > > > > I'll add a very relevant comment I know from the internet: > > "It makes sense. Something akin to what the central banks do by setting > interest rates, but algorithmic, leading to a 'natural' (rather than > manipulated) level of inflation. But different, because it's directly > tied to security. I haven't thought whether it would be an issue if it > works in one direction only (halvings, but no doublings), but it might. > When I was learning about Bitcoin, I heard "It costs you nothing to > store your bitcoin (as opposed to, say, gold). You get security for > free." and thought it sounded wonderful, but too good to be true. There > is no free lunch and all that... I understand a lack of inflation is > aligned with Austrian economics, but the Austrians didn't know a > monetary system whose security was tied to inflation. So it's a new > concept to wrap one's head around." > https://stacker.news/items/291420 > > > There is growing awareness of the lack of a free market between active > and passive participants in Bitcoin and growing awareness of the > inevitability of the problem that will arise in the future as a result. > And there is slowly growing acceptance of well-thought-out proposals to > fix this situation. > The free market is more important than finite supply. > > > Regards > Jaroslaw > > > W dniu 03.11.2023 o 19:24, Erik Aronesty via bitcoin-dev pisze: > > currently, there are providers of anonymity services, scaling services, > > custody, and other services layered on top of bitcoin using trust-based > > and federated models. > > > > as bitcoin becomes more popular, these service providers have > > increasingly had a louder "voice" in development and maintenance of the > > protocol > > > > holders generally want these features > > > > but service providers have an incentive to maintain a "moat" around > > their services > > > > in summary, making privacy, scaling and vaulting "hard" for regular > > users, keeping it off-chain and federated... is now incentivised among > > a vocal, but highly technical, minority > > > > is anyone else worried about this? > > > > _______________________________________________ > > bitcoin-dev mailing list > > bitcoin-dev@lists.linuxfoundation.org > > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev > --000000000000a1b01a060968fdb8 Content-Type: text/html; charset="UTF-8" Content-Transfer-Encoding: quoted-printable
I don't believe the narrative that miners provide net= work security

they provide dou= ble spend insurance

and = that's it

so that li= mits the size of the transaction and the number of confirmations that are r= equired before that transaction is cleared

But it doesn't provide security for the rest of the = network.=C2=A0 My private keys are private and my note is fully validating= =C2=A0 ..=C2=A0 and there's nothing miners can do about that

let's ditch that narrative ple= ase



=
On Sun, No= v 5, 2023, 9:40 AM JK <jk_14@op.pl>= ; wrote:

I'm worried even more about something else, but still fits into the sam= e
topic category.


A tax in the form of a direct tax is less acceptable to people than a
hidden tax. This is human nature, as the saying goes, "What the eye doesn't see, the heart doesn't grieve over." A high direct tax= (e.g., on
a one-time transaction) is much more irritating than a tax of the same
amount but hidden (especially when it affects all cash holders equally, as in the case of inflation).

There is no reason to believe that in any alternative financial system, it will be different ("This time is different." No, it is not.)
The analogy is clear: a transaction tax is on-chain fee, an inflation
tax is the block reward. And just in case: miners are only able to
collect payment for providing network security in an amount equal to the sum collected in both of these taxes, and no single satoshi more (the
principle that "There's no such thing as a free lunch" applie= s).

Now, a little thought experiment:
Imagine a system that tries to maintain a constant level of difficulty
and reacts flexibly to changes in difficulty, by modulating the block
reward level accordingly (using negative feedback).

It is known that the system will oscillate around a certain level of the block reward value (around a certain level of inflation) that provides
the desired level of network security.

Furthermore, Earth is a closed system with finite resources, making it
hard to imagine a situation where Bitcoin is responsible for e.g. 95%
of global energy consumption (while complaints already arise at 0.1%).

In other words, the level of network security is de facto limited from
the top, whether we like it or not.

And for a naturally limited and still acceptable level of network
security (vide: "Change the code, not the climate") - there is a =
corresponding level of inflation.


To sum this up, the most important conclusion to remember is:

For a natural level of network security, there is a natural level of
inflation.



I'll add a very relevant comment I know from the internet:

"It makes sense. Something akin to what the central banks do by settin= g
interest rates, but algorithmic, leading to a 'natural' (rather tha= n
manipulated) level of inflation. But different, because it's directly <= br> tied to security. I haven't thought whether it would be an issue if it =
works in one direction only (halvings, but no doublings), but it might. When I was learning about Bitcoin, I heard "It costs you nothing to store your bitcoin (as opposed to, say, gold). You get security for
free." and thought it sounded wonderful, but too good to be true. Ther= e
is no free lunch and all that... I understand a lack of inflation is
aligned with Austrian economics, but the Austrians didn't know a
monetary system whose security was tied to inflation. So it's a new concept to wrap one's head around."
https://stacker.news/items/291420


There is growing awareness of the lack of a free market between active
and passive participants in Bitcoin and growing awareness of the
inevitability of the problem that will arise in the future as a result. And there is slowly growing acceptance of well-thought-out proposals to fix this situation.
The free market is more important than finite supply.


Regards
Jaroslaw


W dniu 03.11.2023 o=C2=A019:24, Erik Aronesty via bitcoin-dev pisze:
> currently, there are providers of anonymity=C2=A0services, scaling ser= vices,
> custody, and other services layered on top of bitcoin using trust-base= d
> and federated models.
>
> as bitcoin becomes more popular, these service providers have
> increasingly had a louder "voice" in development and mainten= ance of the
> protocol
>
> holders generally want these features
>
> but service providers have an incentive to maintain a "moat"= around
> their services
>
> in summary, making privacy, scaling and vaulting "hard" for = regular
> users, keeping it off-chain and federated...=C2=A0 is now incentivised= among
> a vocal, but highly technical, minority
>
> is anyone else worried about this?
>
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev@lists.linuxfoundation.org
> https://lists.linuxfou= ndation.org/mailman/listinfo/bitcoin-dev
--000000000000a1b01a060968fdb8--