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

From: ZmnSCPxj <[email-masked]>
Date: Thu, 04 Jul 2019 04:57:03 +0000

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 (apart from scamming) and no additional information to demonstrate errors in my conclusions have been offered.

I presented another use case, that of the "Bitcoin Classified Ads Network".
https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2019-July/017083.html

Advertisements are "backed" by an unspent TXO.
In order to limit their local resource consumption, nodes of this network will preferentially keep advertisements that are backed by higher UTXO values divided by advertisement size, and drop those with too low UTXO value divided by advertisement size.

Thus, spammers will either need to rent larger UTXO values for their spam, paying for the higher rent involved, or fall back to pre-Bitcoin spamming methods.
Thus I think I have presented a use-case that is viable for this and does not simply devolve to "just burn a 1-satoshi output".

I still do not quite support generalized covenants as the use-case is already possible on current Bitcoin (and given that with just a little more transaction introspection this enables Turing-completeness), but the basic concept of "renting a UTXO of substantial value" appears sound to me.

Regards,
ZmnSCPxj