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

From: Peter Todd <[email-masked]>
Date: Sun, 3 Jul 2022 05:43:53 -0400

On Wed, Jun 29, 2022 at 12:44:11PM +0200, Kate Salazar via bitcoin-dev wrote:
> > 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.
> >
> 
> Pool operators are free to request larger fees from older utxos, or from
> all utxos, or from newer utxos, at their judgement, looking at the
> blockspace demand census and at what the other pool operators are doing.
> This is not consensus, it's policy. It's not a technology problem, it's
> solved above in the social layer.

If pool operators can easily collude like you are proposing, we have a serious
problem with pool centralization.

What you would actually expect in a healthy Bitcoin ecosystem is for some pool
operators to defect, and them winding up mining those transactions for
market-based fees, eventually forcing the pool operators who are trying to
charge a discriminatory premium to give up.

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