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> The range proofs are verified by monero nodes or the transaction is invalid, so it is sort of like asking to audit that all bitcoin transactions are correctly

by npoc 2y ago

> The range proofs are verified by monero nodes or the transaction is invalid, so it is sort of like asking to audit that all bitcoin transactions are correctly signed. The cryptography for Bulletproofs and its implementations are audited by cryptographers, which you can read. Just run a monero node and count up all the inputs from the block reward, which are public. That's the supply. Thanks - I'll investigate this further > The low block size and resulting high fees aren't an intentional design decision. It's not "optimized" for anything except the network conditions of 2010, because that's the last time satoshi changed it. Satoshi clearly intended for the block size to be raised[0][1] Bitcoin is what it is. It makes no difference what Satoshi had envisioned for it. It turns out that it's an excellent savings tool/reserve asset - an (ideal?) store of value. It's optimised for large size and long duration because the transaction fees are independent of size, and it has a capped supply with predefined issuance curve. > The difference between gold and bitcoin is that gold doesn't require a constant value transfer to miners (in the form of inflation or fees) in order to be secure, gold can just sit in a vault. In 10 years down the line if the mining reward is too low (coinbase keeps getting cut in half, transaction fees will need to increase to accommodate), miners will sell off equipment and attackers can buy them up. It's not true that bitcoin requires continuous fees to remain secure. Any transactions more than a few blocks deep in the current blockchain will remain secure forever - even if the network shuts down. If it doesn't shut down, there will be transactions, and the small blocks (~7 txn/sec cap) see to it that transaction fees increase with demand for transactions. The more new transactions there are, the more secure those new transactions are - a positive feedback loop. The only way the transaction fees would be too low is if bitcoin has already failed and there is no demand for it as a store of value. The incentives will actually be for the wealthy (individuals, companies, countries) to use it all the time, as the fees become insignificant for large transactions. > it recreates money printing unless you are using lightning. If it is just some payment processor you don't have a payment channel with (like PayPal as you suggested) there is nothing stopping them from doing fractional reserve banking on the other side and giving out loans. Correct, but they will run the risk of an old-fashioned bank run, so there will be a lower limit to the reserve fraction, unlike with fiat central banking where there is no reserve requirement (infinite money supply) > People can self custody now because fees are low. If more people use bitcoin, the fees go up and it becomes impractical. Using bitcoin for everyday transactions is the whole point bitcoin was created in the first place. Again it makes no difference why it was created. It is what it is, right now. If regular people can't afford to onboard, so be it. Rich people, large companies and countries will be able to, and it's this large injection of wealth that will make it extremely valuable, rather than piggy banks etc. In fact the banks used by the masses would likely store those people's wealth in bitcoin behind the scenes, even if they don't offer bitcoin accounts to the customers themselves. The reality is that if banks don't provide on-boarding, higher-level networks like Lightning (with channel factories), fedimint (https://river.com/learn/terms/f/fedimint/ https://river.com/learn/terms/f/fedimint/) will offer a path for the masses to onboard in the future. > This will just give you proof that the custodian hasn't moved the outputs, which is sort of flawed. It doesn't tell you anything about ownership. It tells you a lot about ownership - you would be able to see your own transactions on chain. You can't transfer ownership of bitcoin without a transaction and that would be visible to the legal owner (the customer) and would immediately trigger a run on the custodian - likely putting them out of business, never mind the legal consequences, which is a great incentive for custodians not to rehypothecate it (understatement...)

beeflet 2y ago
>Thanks - I'll investigate this further I'll give you a couple of references if you are interested. "Zero to Monero" (https://web.getmonero.org/library/Zero-to-Monero-2-0-0.pdf https://web.getmonero.org/library/Zero-to-Monero-2-0-0.pdf) is a good guide, but it may become outdated with the upcoming "FCMP++" upgrade. You might also be interested in Ring signatures and confidential transactions (CT) which were the original privacy improvements suggested for bitcoin. >Any transactions more than a few blocks deep in the current blockchain will remain secure forever - even if the network shuts down. No it won't. You get 51% attacks if the hash power of an attacker is high relative to miners. Bitcoin's security assumes that there are always miners so an attacker can't catch up. Monero (and a couple other cryptocurrencies) use a tail emission: The emission rate is constant, which sounds bad until you realize that it still means that inflation is always decreasing asymptotically as a % of the total supply. At the same time, you get a constant subsidy for miners. >the transaction fees are independent of size Every cryptocurrency I'm aware of uses this model. It's because the actual computational cost for a cryptocurrency network to process a transaction is independent of the amount of cryptocurrency transacted. >the small blocks (~7 txn/sec cap) see to it that transaction fees increase with demand for transactions You are assuming that there will be demand for bitcoin transactions. But if the purpose of bitcoin is to be a store of value and not a medium of exchange then this will not be the case. Not to mention you have all these layers like the lightning network that are ultimately designed to decrease the amount paid out to miners and redirect them to intermediaries instead. Clearly the total mining reward from fees increases as the transaction throughput increases, and vice versa: eventually fees just get so high that they are prohibitive to certain classes of commerce. Why is bitcoin a store of value, is it a useful instrument for trade? No, in fact the high fees are somewhat prohibitive to its use as a store of value. Bitcoin's value as a "store of value" is predicated on circular reasoning. You will eventually learn that self-fulfilling prophecies like these are also self-unfulfilling prophecies by the same manner. Imagine that there is another cryptocurrency that becomes an effective instrument for trade at scale (monero wouldn't work because of its large transaction sizes, but maybe Bitcoin Cash or Litecoin or something) and at the same time is sound enough to provide a "store of value". This new cryptocurrency would out-compete Bitcoin in usefulness, and Bitcoin would no longer be an effective "store of value". >If regular people can't afford to onboard, so be it. Rich people, large companies and countries will be able to, and it's this large injection of wealth that will make it extremely valuable, rather than piggy banks etc. It would represent a wealth transfer to the lower class. These large institutions would be investing in an asset that is ultimately valuable "because it is". As a thought experiment: If one person bought up all the bitcoin in the world and monopolized it, would it be valuable or worthless? The answer is clearly "worthless". It's not the same as gold in this sense. If you monopolized gold somehow, you could set a much higher price based on its intrinsic usefulness as a material. Cryptocurrencies, like real currencies are only useful insofar as you can use them as an instrument of trade. There is a network effect involved.

by npoc 2y ago

beeflet 2y ago

>Thanks - I'll investigate this further I'll give you a couple of references if you are interested. "Zero to Monero" (https://web.getmonero.org/library/Zero-to-Monero-2-0-0.pdf https://web.getmonero.org/library/Zero-to-Monero-2-0-0.pdf) is a good guide, but it may become outdated with the upcoming "FCMP++" upgrade. You might also be interested in Ring signatures and confidential transactions (CT) which were the original privacy improvements suggested for bitcoin. >Any transactions more than a few blocks deep in the current blockchain will remain secure forever - even if the network shuts down. No it won't. You get 51% attacks if the hash power of an attacker is high relative to miners. Bitcoin's security assumes that there are always miners so an attacker can't catch up. Monero (and a couple other cryptocurrencies) use a tail emission: The emission rate is constant, which sounds bad until you realize that it still means that inflation is always decreasing asymptotically as a % of the total supply. At the same time, you get a constant subsidy for miners. >the transaction fees are independent of size Every cryptocurrency I'm aware of uses this model. It's because the actual computational cost for a cryptocurrency network to process a transaction is independent of the amount of cryptocurrency transacted. >the small blocks (~7 txn/sec cap) see to it that transaction fees increase with demand for transactions You are assuming that there will be demand for bitcoin transactions. But if the purpose of bitcoin is to be a store of value and not a medium of exchange then this will not be the case. Not to mention you have all these layers like the lightning network that are ultimately designed to decrease the amount paid out to miners and redirect them to intermediaries instead. Clearly the total mining reward from fees increases as the transaction throughput increases, and vice versa: eventually fees just get so high that they are prohibitive to certain classes of commerce. Why is bitcoin a store of value, is it a useful instrument for trade? No, in fact the high fees are somewhat prohibitive to its use as a store of value. Bitcoin's value as a "store of value" is predicated on circular reasoning. You will eventually learn that self-fulfilling prophecies like these are also self-unfulfilling prophecies by the same manner. Imagine that there is another cryptocurrency that becomes an effective instrument for trade at scale (monero wouldn't work because of its large transaction sizes, but maybe Bitcoin Cash or Litecoin or something) and at the same time is sound enough to provide a "store of value". This new cryptocurrency would out-compete Bitcoin in usefulness, and Bitcoin would no longer be an effective "store of value". >If regular people can't afford to onboard, so be it. Rich people, large companies and countries will be able to, and it's this large injection of wealth that will make it extremely valuable, rather than piggy banks etc. It would represent a wealth transfer to the lower class. These large institutions would be investing in an asset that is ultimately valuable "because it is". As a thought experiment: If one person bought up all the bitcoin in the world and monopolized it, would it be valuable or worthless? The answer is clearly "worthless". It's not the same as gold in this sense. If you monopolized gold somehow, you could set a much higher price based on its intrinsic usefulness as a material. Cryptocurrencies, like real currencies are only useful insofar as you can use them as an instrument of trade. There is a network effect involved.