Topic: Monero Economy - page 23. (Read 43688 times)

I agree with all of your points, for the most part -- with two exceptions:  

Firstly, it is, for the present, more challenging to buy bitcoin anonymously than your text suggests.  Even an easy, effective anonymous currency does not suffice to make it easy to buy bitcoin with reliable and effective anonymity.

Secondly, I think that for quite some time the valid theoretical point of Gresham's Law is largely irrelevant, in practical terms, because the overwhelming barrier to use of crypto as currency is lack of infrastructure and vendor support, next to which all other considerations are secondary. (And which renders crypto useful only for a very special class of typically very high value or else crucially private transaction, where Gresham's Law doesn't really apply.)

Both of these conditions are accidents of history, and will hopefully change in the future, but while they pertain, they do bear strongly on the desirability of an anonymous coin as a value store.

The biggest reason why it would be well for Monero not to commit to a perpetual debasement just yet is that the decision may have irreversible impact detrimental to the establishment of the coin.  Gresham's Law works in favor of the increased adoption of a deflationary currency during times such as we are presently in, times when infrastructure does not allow the quotidian use of crypto.  It only works against the purpose of facilitating anonymous transactions when, in the hypothetical future, infrastructure is sufficient to allow reliance on Monero for general transactions.  

Hoarding is part of the PR, as is price appreciation. If you are debasing early, you tend to lose value early, which turns people away from the coin.  BTC is much more usable than DOGE, presently, for example, which is in serious decline and unlikely to recover a growth trajectory, whereas BTC has never lost its exponential growth momentum despite a price collapse, in part because it is deflationary.  I.e. the empirical evidence at present is contradictory to Gresham's Law, and I claim this is because of the immaturity of infrastructure, but will change eventually, to bear out Gresham.

For these reasons, I would suggest that any persistent debasement be tied to the number of active transactors in the ecosystem, e.g. a 7-day moving average.  If the number is stable or declines over time, debasement should be nil.  If the number is increasing, debasement should kick in.  If the number is accelerating, debasement should accelerate.  But even that is premature until infrastructure exists to support an economy, so I would suggest another factor, to threshold at some level of activity indicative of a working bootstrap. 

The result of such a policy should be enhanced price stability:  The value of a currency scales as the square of the number of transactors in the economy.  Price deviates from value due to exogenous factors, but converges to a mean which approximates the value increasingly well over time.  If you adjust issuance in accordance with value, price will tend to adjust along with it.

I should clarify... what I meant to say is:

High volume trade is certainly possible with a long-term value storage vehicle, but very unlikely because the properties of such an entity actively discourage it. This is why bitcoin has such a small circulating supply relative to the total available coins... nobody wants to spend their bitcoins when they can just accumulate them and watch the price go up. This is why I don't think bitcoin will ever be a "spending currency" so to speak.

A great currency for trade is one that is both easy to get and easy to spend, and this quality is acheived by deteriorating its long-term value integrity. Bitcoins are neither easy to get nor easy to spend, as the PoW increasingly favors the privileged, and the coin's deflationary qualities force you to fight logic to spend it.

Gold certificates are actually a great example of deteriorating value to achieve volume. Goldsmiths learned very early that they could print many more certificates than they actually had gold to back up, because such few people ever bothered to redeem them. This kind of debasement was an early form of fractional reserve banking, and one of the first steps toward ultra-high volume trade.

Regarding anonymous value storage, I'm saying it's useless because all you really need is anonymous currency. You can use that currency to purchase bitcoins or anything you want with anonymity. "Unnecessary" is probably a much better choice of word.

Yes, my promise has a value.



Excuse me, I'm Dagobert Duck and want to change my Gold into certificates. Where can I do this?

I have nothing useful on side-chains yet.  It is in my todo queue.

By garbage collecting the chain I mean eliminating all of the historical transaction data, and distilling the information content down to the minimum that is required to operate the coin:  The association between controllers and the summed outputs which they control.  Currently, almost no one is mixing, and the chain is growing about 2.3 gb/year.  If it were transacting actively and mixing was in heavy use,  I can see Moore's law running out of runway long before Monero ceased to be important.  Definitely in my lifetime.

a botnet has i.p. addresses.   a whitelist has i.p. addresses.  as long as the two do not overlap, the botnet cannot connect to the chain.

Please explain your thoughts on this, because it is not obvious to me.  I consider anonymous value storage to be an extremely high priority.  Without it, you are unlikely to be able to retain wealth during a sovereign crisis.

Some promises have value, while others do not.  Which are which will vary over time.  The same is true of other commodities, although promises are typically more volatile.  Gold certificates have been successfully used as a long-term store of value and as an exchange medium for high-volume trade -- for suitable values of "long-term" and "high-volume".

Physical metals have persisted in storing value longer than anything else, and were used for essentially all trading worldwide for centuries.  Arguably, some of the features of gold certificates which make them more usable for larger volumes of trade (in excess of say, a million dollars in value, pick a number, corresponding to the strength of your back) also contribute to their inferiority as a value store, relative to physical metal.  That does not mean that they are not suitable for both uses, within their actual limitations.  Gold or silver certificates which are fully backed by deposits and have the full faith and credit of their issuer are a pretty darn good value store.

That would be quite the promotion!

Gold certificates have no value, only a promise.

You must be the BDFL.  I'm surprised that you are so friendly to botnets.

I actively disbelieve you.  Gold certificates are a counter-example.

Anonymous value storage is useless. You could use MRO to purchase bitcoins anonymously (or any other crypto-commodity), and nobody would know you own it. What the world needs is an anonymous medium of exchange.

It seems like what you want is more out of convenience, but you cannot have both. A long-term value store does not have the properties to allow high volume trade.

As I said, you can't "identify" the botnet. It doesn't have an IP address of its own and it doesn't behave any differently from a normal miner.

But if you think this is a good idea, I suggest you go and design it, including all the implementation details you are glossing over, because it isn't anything like the crypto coins that exist today.

This is not going to happen in Monero. In AminorexCoin, maybe.

Nor would I seek to do so, because, as you say, it would be futile.  The whitelist is a control.  A control requires an operator in order to effect the will of the operator.  The only way to prevent an operational botnet from being beneficial to its controller is to deny access to the chain.  The whitelist will in fact deny access to the chain.  When a botnet connects, after it is identified, it can be disconnected by removing that address from the whitelist.

This will not work. They just need one node on the whitelist. How will you know its a botnet? I have a bunch of computers. Or do I? Maybe I just have a botnet proxied behind my IP address. You can't tell the difference.

Alternately, the botnet itself may spread until it reaches one node on your whitelist, then p2p its own node and proxy everything through the whilelist node.

In a sense any p2p coin network itself resembles a botnet. The only real difference is the intent of the owners and you won't be able to reduce that to code.

It still has to connect in order to mine on the main chain.  I'm not saying it will be easy, but it is certainly possible to deny connectivity to botnets.  The easiest way being a whitelist.

We don't have to make it impossible to mine with a botnet.  We just have to make it hard enough so that it is better for the botnet owner to mine another coin.

Can't a botnet tunnel all of the traffic through one ip? 

Also, now we have pool software so botnets will be able to mine on a pool. Even if the public pools reject botnets, a botnet owner can set up a private pool.

Botnets.

In order to mine coins you need connectivity to peers.  If we whitelist peers, then botnets will be excluded.  I suggest this as a temporary measure.  It is good for miners because they don't have to compete with botnets.  It is good for monero because it does not suffer reputation damage as a botnet coin.  It is good for botnet victims because it is one less criminal purpose for their systems. 

I think this works well if it is incorporated into the daemon as an optional feature.  That way it is easy to use.  Any comments?

there are no crypto vehicles for storing value which provide a usable and robust level of anonymization.  mro has that potential, and that is why it is interesting.  if that potential is removed, it will be useless to me.  there are better ways to spend money.

if blockchain size is key to eliminating botnet appeal just make it bigger with a large random block. problem solved.