From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from smtp2.osuosl.org (smtp2.osuosl.org [IPv6:2605:bc80:3010::133]) by lists.linuxfoundation.org (Postfix) with ESMTP id C6DAEC002D for ; Wed, 18 May 2022 03:06:31 +0000 (UTC) Received: from localhost (localhost [127.0.0.1]) by smtp2.osuosl.org (Postfix) with ESMTP id A0909404F3 for ; Wed, 18 May 2022 03:06:31 +0000 (UTC) X-Virus-Scanned: amavisd-new at osuosl.org X-Spam-Flag: NO X-Spam-Score: 0.001 X-Spam-Level: X-Spam-Status: No, score=0.001 tagged_above=-999 required=5 tests=[BAYES_40=-0.001, DKIM_SIGNED=0.1, DKIM_VALID=-0.1, RCVD_IN_DNSWL_NONE=-0.0001, SPF_HELO_NONE=0.001, SPF_NONE=0.001] autolearn=ham autolearn_force=no Authentication-Results: smtp2.osuosl.org (amavisd-new); dkim=pass (2048-bit key) header.d=voskuil-org.20210112.gappssmtp.com 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 G5FvqTSVTyzx for ; Wed, 18 May 2022 03:06:30 +0000 (UTC) X-Greylist: whitelisted by SQLgrey-1.8.0 Received: from mail-pl1-x633.google.com (mail-pl1-x633.google.com [IPv6:2607:f8b0:4864:20::633]) by smtp2.osuosl.org (Postfix) with ESMTPS id D3A5C404B3 for ; Wed, 18 May 2022 03:06:30 +0000 (UTC) Received: by mail-pl1-x633.google.com with SMTP id i8so524608plr.13 for ; Tue, 17 May 2022 20:06:30 -0700 (PDT) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=voskuil-org.20210112.gappssmtp.com; s=20210112; h=from:to:cc:references:in-reply-to:subject:date:message-id :mime-version:content-transfer-encoding:thread-index :content-language; bh=cVpJpDejwjsGzoOYmbMZuIrQRgvyACrIO0H44CJHL08=; b=IWCW7f3HuoUFZiq1m8U3ROV5mx1JVrHralf4M8cyLe8rS/bmD3R0DFpjWKEfBiO92C kvkOOY9VSayY30QbXJRMfBkvVF0m25GZDmbyH6/Px4KpBtbjvMXphAveTputsFbDaopo jSxT7rvSnmyWpDccA7kY5BGPnGu7rVHtKcDo/kbQG4Ss5H6kkKQr2bRmzufphhUyBJJD a9n4efCr5b5yIajnwKiU3Il/1CXfAXvdS+x6XnGyH+zBS+sdRysV9mVu8UTC0MlN3hZO KCVfV+3LZdUNN5G75hcBuPGEgMqYy5NXyDu21y2ntSTcULBhhN072Xbg/DeL2dH4sBB6 l7Bg== X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=1e100.net; s=20210112; h=x-gm-message-state:from:to:cc:references:in-reply-to:subject:date :message-id:mime-version:content-transfer-encoding:thread-index :content-language; bh=cVpJpDejwjsGzoOYmbMZuIrQRgvyACrIO0H44CJHL08=; b=YvwkYbACyjSEB2ppEoceCFGuAg9FutunoccnPxYUkJW10edtqAL8nc5OKesNVWAkMP oJA2g4YX3D+fdJMbVXKfhm/xiOIsqQNG9DSFT5Jc8HiPTEa2cYWq7haW3SoLNb0CGFla yrLkauNUL2AxQ/GIFXvfzCNxUqerSHexBBgjGT+OA5jbXrO73jtG9F85fIK0IWkICWQD KNQMUVO3Xu5eiiN4TgO/eXJHsME0+qnnhjtbFN4zlZoIeZjR0q8wLC3a81zI9jIhkAyz hSqxaRJRsIEGbDPdTkTpmtJtUHlhdbVlYNJnzQ4BYw4QsYRcb8Jhrx+q2uFmreHokHk3 SzKw== X-Gm-Message-State: AOAM533v/d9p0CApOTmTPYruoBpDPFI3UKEJB4ngaje0AQNP9IYtRgRQ mYrJaP5VTmBG8MIXkxJbArmXCA== X-Google-Smtp-Source: ABdhPJwp0qwxk4MNrhet8PNryFHKwwUqUHio1RVgFdUh0wtoLv2XTxiaMPkqBP0QNCnFufscUDkJDg== X-Received: by 2002:a17:90a:191a:b0:1dc:a3d3:f579 with SMTP id 26-20020a17090a191a00b001dca3d3f579mr39763291pjg.30.1652843190162; Tue, 17 May 2022 20:06:30 -0700 (PDT) Received: from ERICDESKTOP ([50.35.67.197]) by smtp.gmail.com with ESMTPSA id o3-20020a62cd03000000b0050e006279bfsm475958pfg.137.2022.05.17.20.06.28 (version=TLS1_2 cipher=ECDHE-ECDSA-AES128-GCM-SHA256 bits=128/128); Tue, 17 May 2022 20:06:29 -0700 (PDT) From: To: "'ZmnSCPxj'" References: <48D4B621-D862-4031-AE43-3F54D34FB0B5@voskuil.org> <01c401d86a5c$956ddbd0$c0499370$@voskuil.org> In-Reply-To: <01c401d86a5c$956ddbd0$c0499370$@voskuil.org> Date: Tue, 17 May 2022 20:06:29 -0700 Message-ID: <01d901d86a64$452ef9d0$cf8ced70$@voskuil.org> MIME-Version: 1.0 Content-Type: text/plain; charset="UTF-8" Content-Transfer-Encoding: quoted-printable X-Mailer: Microsoft Outlook 16.0 Thread-Index: AQNG5FH7rVDDJiwd0yZV2FzKY4oQ/AFkcJ/JAe3DhcICEHJataob22Nw Content-Language: en-us Cc: 'Bitcoin Protocol Discussion' Subject: Re: [bitcoin-dev] BIP proposal: Timelocked address fidelity bond for BIP39 seeds 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: Wed, 18 May 2022 03:06:31 -0000 Good evening ZmnSCPxj, Sorry for the long delay... > Good morning e, >=20 > > Good evening ZmnSCPxj, > > > > For the sake of simplicity, I'll use the terms lender (Landlord), = borrower > > (Lessor), interest (X), principal (Y), period (N) and maturity = (height after N). > > > > The lender in your scenario "provides use" of the principal, and is = paid > > interest in exchange. This is of course the nature of lending, as a = period > > without one's capital incurs an opportunity cost that must be offset = (by > > interest). > > > > The borrower's "use" of the principal is what is being overlooked. = To > > generate income from capital one must produce something and sell it. > > Production requires both capital and time. Borrowing the principle = for the > > period allows the borrower to produce goods, sell them, and return = the > > "profit" as interest to the lender. Use implies that the borrower is = spending > > the principle - trading it with others. Eventually any number of = others end up > > holding the principle. At maturity, the coin is returned to the = lender (by > > covenant). At that point, all people the borrower traded with are = bag holders. > > Knowledge of this scam results in an imputed net present zero value = for the > > borrowed principal. >=20 > But in this scheme, the principal is not being used as money, but as a = billboard > for an advertisement. > > Thus, the bitcoins are not being used as money due to the use of the = fidelity > bond to back a "you can totally trust me I am not a bot!!" assertion. > This is not the same as your scenario --- the funds are never = transferred, > instead, a different use of the locked funds is invented. >=20 > As a better analogy: I am borrowing a piece of gold, smelting it down = to make > a nice shiny advertisement "I am totally not a bot!!", then at the end = of the > lease period, re-smelting it back and returning to you the same gold = piece > (with the exact same atoms constituting it), plus an interest from my = business, > which gained customers because of the shiny gold advertisement = claiming "I > am totally not a bot!!". >=20 > That you use the same piece of gold for money does not preclude me = using > the gold for something else of economic value, like making a nice = shiny > advertisement, so I think your analysis fails there. > Otherwise, your analysis is on point, but analyses something else = entirely. Ok, so you are suggesting the renting of someone else's proof of "burn" = (opportunity cost) to prove your necessary expense - the financial = equivalent of your own burn. Reading through the thread, it looks like = you are suggesting this as a way the cost of the burn might be diluted = across multiple uses, based on the obscuration of the identity. And = therefore identity (or at least global uniqueness) enters the equation. = Sounds like a reasonable concern to me. It appears that the term "fidelity bond" is generally accepted, though I = find this an unnecessarily misleading analogy. A bond is a loan (capital = at risk), and a fidelity bond is also capital at risk (to provide = assurance of some behavior). Proof of burn/work, such as Hash Cash (and = Bitcoin), is merely demonstration of a prior expense. But in those = cases, the expense is provably associated. As you have pointed out, if = the burn is not associated with the specific use, it can be reused, = diluting the demonstrated expense to an unprovable degree. I can see how you come to refer to selling the PoB as "lending" it, = because the covenant on the underlying coin is time constrained. But = nothing is actually lent here. The "advertisement" created by the = covenant (and its presumed exclusivity) is sold. This is also entirely = consistent with the idea that a loan implies capital at risk. While this = is nothing more than a terminology nit, the use of "fidelity bond" and = the subsequent description of "renting" (the fidelity bond) both led me = down another path (Tamas' proposal for risk free lending under covenant, = which we discussed here years ago). In any case, I tend to agree with your other posts on the subject. For = the burn to be provably non-dilutable it must be a cost provably = associated to the scenario which relies upon the cost. This provides the = global uniqueness constraint (under cryptographic assumptions of = difficulty). Best, e > Regards, > ZmnSCPxj