Subject: Re: [bitcoin-dev] Bitcoin covenants are inevitable

From: Peter Todd <[email-masked]>
Date: Tue, 28 Jun 2022 19:20:27 -0400

On Mon, Jun 27, 2022 at 10:55:56PM -0500, Billy Tetrud 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?

Notice how people frequenty bring up the fact that if you divide the total
block reward by the number of transactions, the cost per transaction is fairly
high - on the order of tens of dollars.

This makes much more sense when you realize that the average value moved per
transaction is also very high - thousands of dollars - making the cost due to
inflation of those tens of dollars transactions low enough to be affordable.

-- 
https://petertodd.org 'peter'[:-1]@petertodd.org