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From: vjudeu@gazeta.pl
To: "Corey Haddad <corey3@gmail.com>,
 Bitcoin Protocol Discussion" <bitcoin-dev@lists.linuxfoundation.org>,
 Giuseppe B <beppeben2030@gmail.com>,
 Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
In-Reply-To: <CAK_HAC97sfvtkfs=yTt8Z0pi5ZF91n7OcZbu7k4XhdnMJ_PYnA@mail.gmail.com>
Date: Wed, 06 Jul 2022 13:10:27 +0200
Message-Id: <139633828-26b5fcbad80d1ca7046479237716ace3@pmq8v.m5r2.onet>
Subject: Re: [bitcoin-dev] Bitcoin covenants are inevitable
Precedence: list

> If the only realistic (fair, efficient & proportionate) way to pay for Bi=
tcoin's security was by having some inflation scheme that violated the 21 m=
illion cap, then agreeing to break the limit would probably be what makes s=
ense, and in the economic interest of its users and holders.

So, Paul Sztorc was right again, there are three options: Enormous Block Si=
ze Increases, Violate 21M Coin Limit, or >50% Miner Fee-Revenues Come From =
Merged Mining: https://www.truthcoin.info/images/sb-trilemma.png. And I thi=
nk using Merged Mining is the best option. More about that: https://www.tru=
thcoin.info/blog/security-budget-ii-mm/

> Another option, if we were to decide we are over-secured in the short ter=
m, would be to soft-fork in a reduction in the current and near-future mini=
ng rewards, by somehow locking the coins in a contract that deprived the mi=
ner of the full reward, and then using that contract to pay the rewards out=
 far in the future, should at some point we feel the security budget was in=
sufficient.

Yes, that's also possible, RSK uses that. And making some kind of soft-fork=
 for that is also possible, but I don't know if miners will agree to send s=
ome coinbase reward to "<futureBlockNumber> OP_CHECKLOCKTIMEVERIFY OP_DROP =
OP_TRUE".

On 2022-07-06 06:29:18 user Corey Haddad via bitcoin-dev <bitcoin-dev@lists=
.linuxfoundation.org> wrote:
>Bitcoin's finite supply is the main argument for people investing in it, t=
he whole narrative around bitcoin is based on its finite supply. While it h=
as its flaws and basically condemns bitcoin to be only used as a store >of =
value (and not as a currency), I don't think it's worth questioning it at t=
his point.=C2=A0
>
>Just my 2 sats.=C2=A0
>
>Giuseppe.=C2=A0


A finite=C2=A0supply alone is not enough to give something value, as it mus=
t also be useful in some way. In the case of Bitcoin, various=C2=A0forms of=
 cryptographic=C2=A0security=C2=A0must all work - and work together - to ma=
ke Bitcoin useful. If the only realistic (fair, efficient & proportionate) =
way to pay for Bitcoin's security=C2=A0was by having some inflation scheme=
=C2=A0that violated the 21 million cap, then agreeing to break the limit wo=
uld probably be what makes sense, and in the economic interest of its users=
 and holders.

There will always be competitive=C2=A0pressures with respect to efficiency,=
 and both being over-secured and under-secured would be economically ineffi=
cient for a crypto currency, and thereby laving room for a more optimally-s=
ecured competitor to gain ground. Currently there is zero feedback in the B=
itcoin system between what we might think is the optimum amount of security=
 and what actually exists. There is also zero agreement on how much securit=
y would constitute such an optimum. Figuring out how much security is neede=
d, or even better, figuring out a way to have a market mechanism to answer =
that question, will be an important project.

Another option, if we were to decide we are over-secured in the short term,=
 would be to soft-fork in a reduction in the current and near-future mining=
 rewards, by somehow locking the coins in a contract that deprived the mine=
r of the full reward, and then using that contract to pay the rewards out f=
ar in the future, should at some point we feel the security budget was insu=
fficient. Anthony Towns presented a form of this concept in greater detail =
at a Scaling Bitcoin conference some years ago. While this solution, if emp=
loyed, would only work for some finite amount of time, it is possible that =
could give additional decades before the accumulated security budget was ex=
hausted.=C2=A0


Corey