From: Tamas Blummer <tamas.blummer@gmail.com>
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Date: Sun, 30 Jun 2019 22:26:29 +0200
In-Reply-To: <063D7C06-F5D8-425B-80CE-CAE03A1AAD0C@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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My argument does not need the comparison with ICOs.

They were just an example that people pay for the utility of register =
even though others think the tokens they keep track of are worthless.

Tamas Blummer


> On Jun 30, 2019, at 22:13, Eric Voskuil <eric@voskuil.org> wrote:
>=20
> ICO tokens can be traded (indefinitely) for other things of value, so =
the comparison isn=E2=80=99t valid. I think we=E2=80=99ve both made our =
points clearly, so I=E2=80=99ll leave it at that.
>=20
> Best,
> Eric
>=20
>> 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=9Cunforgeab=
le register=E2=80=9D as it pertains to such encumbered coins?
>>=20
>> I guess we agree that some way of keeping track of ownership is =
prerequisite for something to aquire value.
>> We likely also agree that the security of that ownership register has =
great 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 whatever reason, even for reasons you find bogus.
>>=20
>> It was not intentional, but I think I just explained why Ethereum =
aquired higher 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 need them to update that register.
>> Should some people find such a register useful then those coins =
needed to update this register will aquire value.
>> Does not matter if you think the concept of covered debt is just as =
bogus as ICOs.
>>=20
>> Here some good news: If they aquire value then they offer a way to =
generate 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 =
something else) is recorded publicly and, given Bitcoin security =
assumptions, cannot be faked. What is not clear is the utility of a =
record of outputs that cannot be traded for something else. You seem to =
imply that a record is valuable 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> 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.
>>>>=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 we would create other kinds that are while encumbered not =
fungible with the common ones.
>>>>=20
>>>> Units are certainly less desirable if encumbered with a debt =
covenant. You say no one would assign them any value.
>>>>=20
>>>> 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
>>>>>=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
>>>>=20
>>>> You are not explaining an existing market but claim that market =
that is not yet there will follow your arguments.
>>>>=20
>>>>>> 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
>>>>=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.
>>>>=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


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