Re: [bitcoin-dev] Bitcoin covenants are inevitable

From: Keagan McClelland <keagan.mcclelland@gmail•com>
To: Erik Aronesty <erik@q32•com>,
	 Bitcoin Protocol Discussion
	<bitcoin-dev@lists•linuxfoundation.org>
Subject: Re: [bitcoin-dev] Bitcoin covenants are inevitable
Date: Tue, 21 Jun 2022 13:00:07 -0600	[thread overview]
Message-ID: <CALeFGL0CQC4_swZTt-=sbe=ZiCmRthZghGDtrWFx5bQCBeOJcg@mail.gmail.com> (raw)
In-Reply-To: <CAJowKgL=nVwnUrpSKmnsTxOfk3DEEZL7awG=HypyCXSR3XCLxg@mail.gmail.com>

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> 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.

But also none of this should be reasons we don't improve Bitcoin's value
(and therefore demand)

Keagan

On Mon, Jun 20, 2022 at 2:42 AM Erik Aronesty via bitcoin-dev <
bitcoin-dev@lists•linuxfoundation.org> wrote:

>
>
> On Sun, Jun 19, 2022 at 2:04 PM Manuel Costa via bitcoin-dev <
> bitcoin-dev@lists•linuxfoundation.org> wrote:
>
>>  if we start seeing issues with block rewards being too low to maintain
>> acceptable security, we're going to have multiple solutions being
>> implemented for it, and definitely a hard fork to indefinitely maintain
>> some degree of block subsidy
>>
>
> if we failed to first try increasing block demand with advanced
> transaction support, it would seem like we were just throwing money and
> growth away to support one narrative (simplicty of function), while
> destroying another (finite supply)
>
> if stuff like covenant support and mweb gets us higher fees, with stuff
> like on-chain mixing protocols, vaults, and higher utility, it might be
> more than enough to sustain bitcoin on fees alone forever
>
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