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([2600:380:7031:6d39:a1fb:7c32:9a36:499]) by smtp.gmail.com with ESMTPSA id t8sm16188119pfq.31.2019.07.06.15.22.00 (version=TLS1_2 cipher=ECDHE-RSA-AES128-GCM-SHA256 bits=128/128); Sat, 06 Jul 2019 15:22:01 -0700 (PDT) Content-Type: text/plain; charset=utf-8 Mime-Version: 1.0 (1.0) From: Eric Voskuil X-Mailer: iPhone Mail (16F203) In-Reply-To: <8D68DC86-1173-43AC-BC84-FE2834741C13@gmail.com> Date: Sat, 6 Jul 2019 15:21:59 -0700 Content-Transfer-Encoding: quoted-printable Message-Id: <16B94409-AB0A-49E3-8B0D-C52A4B1C6ACA@voskuil.org> References: <0DBC0DEA-C999-4AEE-B2E1-D5337ECD9405@gmail.com> <6B9A04E2-8EEE-40A0-8B39-64AA0F478CAB@voskuil.org> <4mT6iC4Va7Afg15a5NLbddAnF2a_vAcQSXYr_jg_5IyEK2ezblJff7EJZakoqvp4BJlLitt9Zlq1_l5JadR0nVss7VDPW-pv8jXGh7lkFC4=@protonmail.com> <0851B842-34A1-427F-95DC-A1D6AB416FB9@voskuil.org> <8D68DC86-1173-43AC-BC84-FE2834741C13@gmail.com> To: Tamas Blummer X-Spam-Status: No, score=-1.9 required=5.0 tests=BAYES_00,DKIM_SIGNED, DKIM_VALID, MIME_QP_LONG_LINE, RCVD_IN_DNSWL_NONE autolearn=ham version=3.3.1 X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on smtp1.linux-foundation.org X-Mailman-Approved-At: Sun, 07 Jul 2019 03:31:26 +0000 Cc: Bitcoin Protocol Discussion Subject: Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.12 Precedence: list List-Id: Bitcoin Protocol Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Sat, 06 Jul 2019 22:22:03 -0000 > On Jul 6, 2019, at 06:34, Tamas Blummer wrote: >=20 > Hi Eric, >=20 >> On Jul 6, 2019, at 03:28, Eric Voskuil wrote: >>=20 >>=20 >>=20 >>> On Jul 5, 2019, at 17:17, ZmnSCPxj wrote: >>>=20 >>> Good morning Eric, >>>=20 >>>> But it=E2=80=99s worth noting that early recovery of the UTXO entirely e= liminates the value of the time lock cost to the ad market. The most obvious= example is one encumbering the coin to himself, then releasing it with his o= wn two signatures whenever he wants. In other words, there is no encumbrance= at all, just a bunch of pointless obscurantion. >>>=20 >>> You still do not understand. >>> I strongly suggest actually reading the post instead of skimming it. >>=20 >> I am responding to the cryptoeconomic principles, not the implementation d= etails. Based on your comments here I am not misrepresenting those principle= s. >>=20 >> For example, I have shown that the multisig unlock implementation reduces= the presumably-encumbered UTXO to simply a UTXO. You have not disputed that= . In fact below you have accepted it (more below). >>=20 >>> The advertisement is broadcast to new nodes on the ad network if and onl= y if its backing UTXO remains unspent. >>> Once the UTXO is spent, then the advertisement is considered no longer v= alid and will be outright deleted by existing nodes, and new nodes will not l= earn of them (and would consider it spam if it is forced to them when the UT= XO is already spent, possibly banning the node that pushes the advertisement= at them). >>>=20 >>> Thus the locked-ness of the UTXO is the lifetime of the advertisement. >>=20 >> The term =E2=80=9Clocked=E2=80=9D here is misused. A unspent output that c= an be spent at any time is just an unspent output. The fact that you can =E2= =80=9Cunencumber=E2=80=9D your own coins should make this exceedingly obviou= s: >>=20 >>> Once you disencumber the coins (whether your own, or rented) then your a= dvertisement is gone; forever. >>=20 >> As I have shown, there is no *actual* encumbrance. >>=20 > If you have to forgo using your money while using a service that encumbers= you. You incur opportunity cost proportional to time you use the service an= d the amount you waived to use elsewhere. > No crypto is needed to understand this. My use of =E2=80=9Cencumbrance=E2=80=9D in this thread has been consistently= a reference to a covenant. When the covenant can be released at any time it= serves no purpose whatsoever, being an encumbrance in name only. I gave a detailed explanation of opportunity cost, and gave you a scenario w= here that opportunity cost could actually be used - to purchase a tracking o= utput (i.e., a fixed term asset tracked for that term). And I have discussed= at length the use of opportunity cost in the hash-cash-like anti-spam ad sc= enario. So it=E2=80=99s not clear to me why you continue to imply that the nature of= either covenants or opportunity cost is the point at issue, and by implying= I don=E2=80=99t understand them. **The central issue in your proposal is that constrained coins can neither b= e used as borrowed money nor the tracking of perpetual assets.** This conclu= sion is not based on a failure to understand the nature of covenants or the c= oncept of opportunity cost. It is the necessary consequence of attempting to= trade something today that will provably disappear tomorrow. The sole possi= ble value of such an instrument is to scam the eventual bag-holders. A secondary issue, in the valid fixed-term asset tracking scenario, is that t= he cost of tracking is dust (and at least one transfer fee). The cost of suc= h tracking is a function only of the market price of a satoshi. The financia= l value of renting one dust output is also limited in time by economic inte= rest (i.e., at 10% it is cheaper to buy than rent if the fixed term exceeds 7= .2 years). So while valid, is not likely to be demanded until one satoshi be= comes worth the overhead of renting it. The opportunity of interest represents opportunity cost when forgone. This c= an be used to show proof-of-cost (ad scenario), and that level can float as a= price on the anti-spam market. This is a perfectly valid scenario, as I hav= e said. The issue with that specific proposal is that it uses covenants in an irrati= onal manner. The ability to release the covenant at any time eliminates the c= ost it would otherwise represent. One could either simply burn or spend coin= outright, or use an actual encumbrance (as you propose) to =E2=80=9Cburn=E2= =80=9D (provably destroy) the opportunity, but a non-encumbrance adds nothin= g except complexity. >>> Your advertisement exists only as long as the UTXO is unspent. >>=20 >> Exactly, which implies *any* UTXO is sufficient. All that the ad network r= equires is proof of ownership of any UTXO. >>=20 > Not any, but one with significant value, so a service with limited bandwit= h can prioritize by that. Not significant, which is arbitrary, but sufficient - a result of supply and= demand. Clearly my intent here is that no covenant on the UTXO is required i= n the scenario. As the preceding discussions conclude, without disagreement,= all that is required is that the (sufficient) output remains unspent, not t= hat it be encumbered. >> Best, >> Eric >>=20 >>> Regards. >>> ZmnSCPxj >=20 > Best, >=20 > Tamas Blummer