Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Good morning ZmnSCPxj, thank you very much for sharing your BCAN idea and thought process in detail. I add some thoughs that very likely occured to you, but not formulated explicitelly: 1. The unique feature of such advertisement network is that it has no owner, just like the Bitcoin network.

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Good morning all, I will attempt to restart my thinking from initial principles regarding my proposed "Bitcoin Classified Ads Network". Nodes behave this way: * Nodes in this network gossip advertisements. * These advertisements refer to a UTXO that must be unspent at the chain tip considered

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hi Eric, Your cryproeconomic theories may describe correctly Bitcoin as money, but fall short of describing a Bitcoin that would also offer reliable memory for other uses. In consequence you miss, that: 1. If the reliable memory that enables money would have more uses then even temporary use

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

I have published a summary here: https://github.com/libbitcoin/libbitcoin-system/wiki/Risk-Free-Return-Fallacy Barring any new consequential inputs I’ll refrain from further comment. e ___ bitcoin-dev mailing list

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 6, 2019, at 03:12, Tamas Blummer wrote: > > >> On Jul 6, 2019, at 01:16, ZmnSCPxj wrote: >> >> Good morning Eric, >> >> >> Sent with ProtonMail Secure Email. >> >> ‐‐‐ Original Message ‐‐‐ >> On Saturday, July 6, 2019 3:27 AM, Eric Voskuil wrote: >> On Jul 4,

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 6, 2019, at 06:34, Tamas Blummer wrote: > > Hi Eric, > >> On Jul 6, 2019, at 03:28, Eric Voskuil wrote: >> >> >> >>> On Jul 5, 2019, at 17:17, ZmnSCPxj wrote: >>> >>> Good morning Eric, >>> But it’s worth noting that early recovery of the UTXO entirely eliminates the

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hi Eric, > On Jul 6, 2019, at 03:28, Eric Voskuil wrote: > > > >> On Jul 5, 2019, at 17:17, ZmnSCPxj wrote: >> >> Good morning Eric, >> >>> But it’s worth noting that early recovery of the UTXO entirely eliminates >>> the value of the time lock cost to the ad market. The most obvious

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 6, 2019, at 01:16, ZmnSCPxj wrote: > > Good morning Eric, > > > Sent with ProtonMail Secure Email. > > ‐‐‐ Original Message ‐‐‐ > On Saturday, July 6, 2019 3:27 AM, Eric Voskuil > wrote: > >>> On Jul 4, 2019, at 21:05, ZmnSCPxj

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 5, 2019, at 18:28, Eric Voskuil wrote: > > > >> On Jul 5, 2019, at 17:17, ZmnSCPxj wrote: >> >> Good morning Eric, >> >>> But it’s worth noting that early recovery of the UTXO entirely eliminates >>> the value of the time lock cost to the ad market. The most obvious example >>>

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 5, 2019, at 17:17, ZmnSCPxj wrote: > > Good morning Eric, > >> But it’s worth noting that early recovery of the UTXO entirely eliminates >> 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

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Good morning Eric, > But it’s worth noting that early recovery of the UTXO entirely eliminates 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 own two > signatures whenever he wants. In other

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 5, 2019, at 16:16, ZmnSCPxj wrote: > > Good morning Eric, > > > Sent with ProtonMail Secure Email. > > ‐‐‐ Original Message ‐‐‐ > On Saturday, July 6, 2019 3:27 AM, Eric Voskuil wrote: > >>> On Jul 4, 2019, at 21:05, ZmnSCPxj zmnsc...@protonmail.com wrote: >>> Good

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 5, 2019, at 12:27, Eric Voskuil wrote: > > >> On Jul 4, 2019, at 21:05, ZmnSCPxj wrote: >> >> Good morning Eric, >> >>> As with Bitcoin mining, it is the consumed cost that matters in this >>> scenario, (i.e., not the hash rate, or in this case the encumbered coin >>> face

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Good morning Eric, Sent with ProtonMail Secure Email. ‐‐‐ Original Message ‐‐‐ On Saturday, July 6, 2019 3:27 AM, Eric Voskuil wrote: > > On Jul 4, 2019, at 21:05, ZmnSCPxj zmnsc...@protonmail.com wrote: > > Good morning Eric, > > > > > As with Bitcoin mining, it is the consumed cost

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 4, 2019, at 21:05, ZmnSCPxj wrote: > > Good morning Eric, > >> As with Bitcoin mining, it is the consumed cost that matters in this >> scenario, (i.e., not the hash rate, or in this case the encumbered coin face >> value). Why would the advertiser not simply be required to burn .1

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 4, 2019, at 12:10, Tamas Blummer wrote: > > Hi Eric, > > there are some other ways to impose cost on use without direct billing, e.g.: > > - Burn Bitcoins to use the service, as you mentioned. This could work and > would benefit remaining Bitcoin owner, but is unsustainable. > > -

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 4, 2019, at 12:10, Tamas Blummer wrote: > > Hi Eric, > > there are some other ways to impose cost on use without direct billing, e.g.: > > - Burn Bitcoins to use the service, as you mentioned. This could work and > would benefit remaining Bitcoin owner, but is unsustainable.

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hi Eric, there are some other ways to impose cost on use without direct billing, e.g.: - Burn Bitcoins to use the service, as you mentioned. This could work and would benefit remaining Bitcoin owner, but is unsustainable. - Pay high fees in self dealing transactions. This could work and would

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Good morning Eric, > As with Bitcoin mining, it is the consumed cost that matters in this > scenario, (i.e., not the hash rate, or in this case the encumbered coin face > value). Why would the advertiser not simply be required to burn .1 coin for > the same privilege, just as miners burn

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Good morning Eric, > > and thanks to you and ZmnSCPxj we now have two additional uses cases for > > UTXOs that are only temporarily accessible to their current owner. > > Actually you have a single potentially-valid use case, the one I have > presented. The others I have shown to be invalid

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 2, 2019, at 00:08, Tamas Blummer wrote: > > >> On Jul 1, 2019, at 20:52, Eric Voskuil wrote: >> >> I said that I would make no further comment given the belief that no new >> ideas were surfacing. However, after giving it some more thought on my own, >> I believe I have found the

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hello ZmnSCPxj, > On Jul 2, 2019, at 12:33, ZmnSCPxj wrote: > > ‐‐‐ Original Message ‐‐‐ > On Tuesday, July 2, 2019 5:30 PM, Tamas Blummer > wrote: > >> The advertiser would thereby put the funds of the HODLer on risk of his >> misbehavior, which

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Sent with ProtonMail Secure Email. ‐‐‐ Original Message ‐‐‐ On Tuesday, July 2, 2019 5:30 PM, Tamas Blummer wrote: > Hello ZmnSCPxj, > > > On Jul 2, 2019, at 10:12, ZmnSCPxj zmnsc...@protonmail.com wrote: > > As a counterargument, I observe that committing to the advertisement on the

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hello ZmnSCPxj, To be more precise, the value of the UTXO is severaly damaged that it is governed by rules of a de-facto side chain with different rules. Therefore its value to those renting it from the advertizer is just that of the advertizement, which is not neccesarily following the

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hello ZmnSCPxj, I share your goal to move everything possible off-chain. The discussion of covenant is not an on/off-chain discussion, but if covenant is needed to solve problems we currently can not and which unlock significant innovation. Consensus support of the covenant is only needed if

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hello ZmnSCPxj, > On Jul 2, 2019, at 10:12, ZmnSCPxj wrote: > > As a counterargument, I observe that committing to the advertisement on the > UTXO is similar to committing to a SCRIPT on a UTXO. > And I observe the Graftroot idea, wherein we commit to a public key on the > UTXO, and admit a

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Good morning Tamas, > Note that the advertizing service provider would need temporary access to > UTXOs of signficant value, so opportunity cost and thereby cost of > advertizing becomes significant. > Covenants would allow the separation of the advertizing service from HODLer > funding it

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Good morning Eric and ZmnSCPxj, > On Jul 2, 2019, at 05:45, ZmnSCPxj wrote: > > Good morning Eric, and Tamas, > >> In the case of tracking an asset that becomes worthless at a specific time, >> one could value a record of ownership, and the ability to trade ownership of >> the asset during

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jul 1, 2019, at 20:52, Eric Voskuil wrote: > > I said that I would make no further comment given the belief that no new > ideas were surfacing. However, after giving it some more thought on my own, I > believe I have found the one case in which a person could value such > encumbered

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Good morning Eric, and Tamas, > In the case of tracking an asset that becomes worthless at a specific time, > one could value a record of ownership, and the ability to trade ownership of > the asset during the period. Consider colored coin type tracking of a theater > ticket for a specific

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

It’s an exceedingly poor example. First, value is subjective. It matters not what other people may consider, only those who act. Given that people trade them (ICO tokens), they have value to those people. Second, the scenario would not function given that the value, as with money, is based on

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

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 wrote: > > ICO tokens can be traded

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

ICO tokens can be traded (indefinitely) for other things of value, so the comparison isn’t valid. I think we’ve both made our points clearly, so I’ll leave it at that. Best, Eric > On Jun 30, 2019, at 12:55, Tamas Blummer wrote: > > >> On Jun 30, 2019, at 20:54, Eric Voskuil wrote: >> >>

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jun 30, 2019, at 20:54, Eric Voskuil wrote: > > Could you please explain the meaning and utility of “unforgeable register” as > it pertains to such encumbered coins? I guess we agree that some way of keeping track of ownership is prerequisite for something to aquire value. We likely

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Could you please explain the meaning and utility of “unforgeable register” as it pertains to such encumbered coins? The meaning in terms of Bitcoin is clear - the “owner” of outputs that represent value (i.e. in the ability to trade them for something else) is recorded publicly and, given

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jun 30, 2019, at 19:41, Eric Voskuil wrote: > > >> On Jun 30, 2019, at 03:56, Tamas Blummer wrote: >> >> Hi Eric, >> >>> On Jun 29, 2019, at 23:21, Eric Voskuil wrote: >>> >>> What loan? Alice has paid Bob for something of no possible utility to her, >>> or anyone else. >>> >> >>

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jun 30, 2019, at 03:56, Tamas Blummer wrote: > > Hi Eric, > >> On Jun 29, 2019, at 23:21, Eric Voskuil wrote: >> >> What loan? Alice has paid Bob for something of no possible utility to her, >> or anyone else. >> > > Coins encumbered with the described covenant represent temporary

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hi Eric, > On Jun 29, 2019, at 23:21, Eric Voskuil wrote: > > What loan? Alice has paid Bob for something of no possible utility to her, or > anyone else. > Coins encumbered with the described covenant represent temporary control of a scarce resource. Can this obtain value? That depends on

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

> On Jun 28, 2019, at 12:21, Tamas Blummer wrote: > > Hi Eric, > > Thank you for your questions as they show what concepts need further > explanation, so you understand the potential of this proposal and how it is > helpful to the ecosystem. > > Riskless zero bond is in fact the most basic

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

On Fri, Jun 28, 2019 at 10:27:16AM +0200, Tamas Blummer via bitcoin-dev wrote: > The value of these outputs to Charlie is the proof that he has > exclusive control of the coins until maturity. > > Alice can not issue promissory notes in excess of own capital or > capital that she was able to

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hi Eric, Thank you for your questions as they show what concepts need further explanation, so you understand the potential of this proposal and how it is helpful to the ecosystem. Riskless zero bond is in fact the most basic concept of financial engineering. Yes, there are engineers of

Re: [bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

Hi Tamas, There are a number of economic assumptions contained herein. While I understand you would like to focus on implementation, the worst bugs are requirements bugs. IMO these should be addressed first. I’ve addressed some possible issues inline. > On Jun 28, 2019, at 01:27, Tamas

[bitcoin-dev] Generalized covenants with taproot enable riskless or risky lending, prevent credit inflation through fractional reserve

I start with a formalisation of loans as common in finance: A zero bond is a contract between two parties Alice and Bob whereby Alice receives an amount less than P and has to pay back P at a later time point called maturity. The difference between the amount received and P is the interest