On Tue, Jun 28, 2022 at 4:43 AM Billy Tetrud via bitcoin-dev < bitcoin-dev@lists.linuxfoundation.org> wrote:
> @Eric > > People who transact are realizing the benefit of money - the avoidance > of barter costs. > > I'm very confident you're incorrect that holders don't receive any benefit > and you're certainly not correct that every spend is receiving the same > benefit. As I'm sure you're aware, one of the primary components of a > currency's value and purpose is as a store of value. Storing value happens > while you're holding it, not while you're spending it. Consider the > following two scenarios: one person holds onto 10 bitcoin for 10 years and > then spends those 10 bitcoins in some way in 2 transactions. Another person > spends 4 bitcoins to buy something, then sells it for 6 bitcoins, and then > buys something else for that 6 bitcoins and then never acquires any bitcoin > for 10 years. > > Both people spent 10 bitcoins over 2 transactions. Over that 10 year > period, only one of those people utilized bitcoin's utility as a store of > value. Who benefited more from their use of bitcoin? > > The person who obtained greater economic utility from their two transactions. > > Those who never transact, never realize any benefit. > > While that's true, its not relevant and basically a red herring. You need > to compare those who transact often and rarely hold, to those who hold a > lot but rarely transact. Its not helpful to consider those who throw their > bitcoin into a bottomless pit and never retrieve them. > There are legitimate uses for burning bitcoin, speaking of bottomless pits. I would avoid confusing velocity metrics with utility, as these aren't the same thing. > > On an idealistic level, I agree with Keagan that it would make sense to > have "a balance of fees to that effect". I think doing that would be > technically/economically optimal. However, I think there is an enormous > benefit to having a cultural aversion to monetary inflation and the > consequences of convincing the bitcoin community that inflation is ok could > have unintended negative consequences (not to mention how difficult > convincing the community would be in the first place). There's also the > economic distortion that inflation causes that has a negative effect which > should also be considered. The idea of decaying utxo value is interesting > to consider, but it would not solve the economic distortion that > monetary inflation causes, because that distortion is a result of monetary > devaluation (which decaying utxos would be a form of). Then again, maybe in > this case the distortion of inflation would actually be a correction - > correcting for the externality of benefit received by holders. I'm > stream-of-consciousnessing a bit, but anyways, I suspect its not worth the > trouble to perfect the distribution of bitcoin blockchain security costs to > include holders. Tho, if I were to go back in time and influence how > bitcoin was designed, I might advocate for it. > > @Peter > > demurrage and inflation have identical economic properties. > > The distortion of incentives is identical, however there is also the > effect it has on a currency's property as a useful unit of account. > Decaying utxos would mean that it would contribute substantially less to > market prices needing to change. I suspect this effect would be bordering > on negligible tho. > > On Thu, Jun 23, 2022 at 2:17 PM Peter Todd via bitcoin-dev < > bitcoin-dev@lists.linuxfoundation.org> wrote: > >> On Tue, Jun 21, 2022 at 01:00:07PM -0600, Keagan McClelland via >> bitcoin-dev wrote: >> > > The PoW security of Bitcoin benefits all Bitcoin users, proportional >> to >> > the >> > value of BTC they hold; if Bitcoin blocks aren't reliably created the >> value >> > of >> > *all* BTC goes down. It doesn't make sense for the entire cost of that >> > security >> > to be paid for on a per-tx basis. And there's a high chance paying for >> it >> > on a >> > per-tx basis won't work anyway due to lack of consistent demand. >> > >> > FWIW I prefer the demurrage route. Having something with finite supply >> as a >> > means of measuring economic activity is unprecedented and I believe >> deeply >> > important. I'm sympathetic to the argument that the security of the >> chain >> > should not be solely the responsibility of transactors. We realize the >> > value of money on receipt, hold *and* spend and it would be appropriate >> for >> > there to be a balance of fees to that effect. While inflation may be >> > simpler to implement (just chop off the last few halvings), I think it >> > would be superior (on the assumption that such a hodl tax was >> necessary) to >> > keep the supply fixed and have people's utxo balances decay, at least at >> > the level of the UX. >> >> Demurrage makes protocols like Lightning much more complex, and isn't >> compatible with existing implementations. While demurrage could in theory >> be >> implemented in a soft-fork by forcing txs to contain an output with the >> demurrage-taxed amount, spending to a pool of future mining fees, I really >> don't think it's practical to actually do that. >> >> Anyway, demurrage and inflation have identical economic properties. >> They're >> both a tax on savings. The only difference is the way that tax is >> implemented. >> >> -- >> https://petertodd.org 'peter'[:-1]@petertodd.org >> _______________________________________________ >> bitcoin-dev mailing list >> bitcoin-dev@lists.linuxfoundation.org >> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev >> > _______________________________________________ > bitcoin-dev mailing list > bitcoin-dev@lists.linuxfoundation.org > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev >
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