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From: 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
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ICO tokens can be traded (indefinitely) for other things of value, so the co=
mparison isn=E2=80=99t valid. I think we=E2=80=99ve both made our points cle=
arly, so I=E2=80=99ll leave it at that.

Best,
Eric

> On Jun 30, 2019, at 12:55, Tamas Blummer <tamas.blummer@gmail.com> wrote:
>=20
>=20
>> On Jun 30, 2019, at 20:54, Eric Voskuil <eric@voskuil.org> wrote:
>>=20
>> Could you please explain the meaning and utility of =E2=80=9Cunforgeable r=
egister=E2=80=9D as it pertains to such encumbered coins?
>=20
> I guess we agree that some way of keeping track of ownership is prerequisi=
te for something to aquire value.
> We likely also agree that the security of that ownership register has grea=
t influence to the value.
>=20
> The question remains if a register as utility in itself gives value to the=
 thing needed to use that register.
> I think it does, if people are interested in what it keeps track of, for w=
hatever reason, even for reasons you find bogus.
>=20
> It was not intentional, but I think I just explained why Ethereum aquired h=
igher market value by being register of ICO tokens.
>=20
> Now back to the coins encumbered with the debt covenant:
> Transactions moving them constitute a register of covered debt and you nee=
d them to update that register.
> Should some people find such a register useful then those coins needed to u=
pdate this register will aquire value.
> Does not matter if you think the concept of covered debt is just as bogus a=
s ICOs.
>=20
> Here some good news: If they aquire value then they offer a way to generat=
e income for hodler by temporarily giving up control.
>=20
> Tamas Blummer
>=20
>>=20
>> The meaning in terms of Bitcoin is clear - the =E2=80=9Cowner=E2=80=9D of=
 outputs that represent value (i.e. in the ability to trade them for somethi=
ng else) is recorded publicly and, given Bitcoin security assumptions, canno=
t be faked. What is not clear is the utility of a record of outputs that can=
not be traded for something else. You seem to imply that a record is valuabl=
e simply because it=E2=80=99s a record.
>>=20
>> e
>>=20
>>> 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> wro=
te:
>>>>>=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 contr=
ol of a scarce resource.
>>>>>=20
>>>>> Can this obtain value? That depends on the availability of final contr=
ol and ability to deal with temporary control.
>>>>=20
>>>> For something to become property (and therefore have marketable value) r=
equires that it be both scarce and useful. Bitcoin is useful only to the ext=
ent that it can be traded for something else that is useful. Above you are o=
nly dealing with scarcity, ignoring utility.
>>>=20
>>> 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 w=
e would create other kinds that are while encumbered not fungible with the c=
ommon ones.
>>>=20
>>> Units are certainly less desirable if encumbered with a debt covenant. Y=
ou say no one would assign them any value.
>>>=20
>>> I am not that sure as they still offer the utility of using the unforgea=
ble 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 g=
ot that, but suppose we do not discuss this here.
>>> If there are people who think it is a good idea, then they would find ha=
ving an unforgeable register of it useful and therefore units needed to main=
tain 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 i=
s necessary. I am merely explaining the market.
>>>>=20
>>>=20
>>> You are not explaining an existing market but claim that market that is n=
ot yet there will follow your arguments.
>>>=20
>>>>> Your rant reminds me of renowed economists who still argue final contr=
ol Bitcoin can not have value, you do the same proclaiming that temporary co=
ntrol of Bitcoin can not have value.
>>>>=20
>>>> It seems to me you have reversed the meaning of temporary and final. Bi=
tcoin is useful because of the presumption that there is no finality of cont=
rol. 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 poi=
nt, it can no longer be traded, making it worthless at that point. If this i=
s known to be the case it implies that it it worthless at all prior points a=
s well.
>>>>=20
>>>> These are distinct scenarios. The fact that temporary (in my usage) con=
trol implies the possibility of value does not imply that finality of contro=
l does as well. The fact that (renowned or otherwise) people have made error=
s 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 w=
ith 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 o=
f a non-consumable good. If it cannot be traded and cannot be consumed it ca=
nnot 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 thin=
k is the deeper utility of Bitcoin. Final control is meant to be the opposit=
e of 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
>=20