Here is my constructive comment: unless a hard cap limiting the increase over a certain period of time is coupled to this proposal, any such scheme is utterly broken and can be trivially gamed by miners intent on controlling the blocksize.

Any such proposition is not viable given that it provides no consideration for the externalization of the cost to the nodes and our focus on keeping Bitcoin decentralized.

Absolutely not.

Unless I misunderstand this would effectively amount to leaving the transactional capacity up to "the free market" while ignoring the externalization of cost to the node.

The maximum limit should be a function of "the cost of the option to create a full node" : http://www.truthcoin.info/blog/measuring-decentralization/

I'm not here to argue whether or not Monero or other private coins facilitate, by way of technology, more private transactions but only cared to clear the air about Bitcoin's fungibility.

My point being mostly that provided we use americanpegasus criteria, cash and gold could equally be traceable to some extent and therefore that would undermine their fungibility.

Seems to me then we are deriving into the anonymity/privacy problem, are we not?

I frankly fail to see how this is an indictment on Bitcoin's fungibility.   

I understand where you are coming from but, again, it appears to me that you are conflating subjective perception of value (or user preference) with fungibility.

First let us examine the term we are debating and its etymology so that there is no ambiguity:
"New Latin fungibilis, from Latin fungi to perform"

Therefore what we are concerned with is whether or not one satoshi performs the same function as any others. It seems to me that for all practical purpose they do and that Bitcoin makes no distinction between any of them.

In fact, I would suggest an individual would be hard pressed to himself distinguish one satoshi from another. Consider this thought experiment:

Let us pretend I am in control of a wallet which holds a certain number of coins, using your example, stolen from said exchange.

I also happen to own a couple of what you would consider "clean" bitcoins. To illustrate my point I choose two spend two outputs, one "clean" and one "tainted", to the same input.

Looking at said input, can you tell which satoshis are "tainted" and which are not?

I'm sorry but I seemingly cannot wrap my head around this "chasm" you speak of for the simple fact that as Bitcoin adoption grows it is inevitable that satoshis will cross paths with what you call "tainted" coin, so much that at one point one could probably suggest that a majority of bitcoins in circulation have come in contact with "tainted" coins.

Apparently you fucked up your quotes but either way I fail to understand what Bitcoin technology has to do with its fungibility ?

I guess that is an interesting analysis but unfortunately not one I can agree with for the simple reason that bitcoins are absolutely and unequivocally fungible.

May I suggest: http://trilema.com/2014/guidance-there-is-no-such-thing-as-bitcoin-taint/ or http://www.contravex.com/2014/06/21/tell-the-grand-inquisitor-theres-no-fucking-bitcoin-taint/

In short, all bitcoins are obviously created equal and perception of value spawned from traceability concerns is not an indictment on Bitcoin itself.

I didn't learn anything new here...

So you're saying they don't take Bitcoin seriously because what? Satoshi owns a shitload of them?

From my experience a majority of "mainstream investors" have little knowledge of monetary economics. They have very closed minded toward anything that doesn't fit into their box and within the boundaries of what they've learned at whatever Ivy school they went to.

I'm not pretending this is necessarily the case in regard to the "people you converse with" but you have not articulated their opinion particularly well if I may say...

I'm very curious to hear that.

You puzzle me   On one hand you make these very insightful comments and on the other you fall into the most basic of logical traps.

First, if you accept that Monero speculators also happen to only obfuscate the origin of their money then I'm not sure why you brought up the point in the first place. Providing we eventually get a private sidechain goods & services will also be sold directly for these private tokens and therefore be "truly anonymous".

Now as for as breaking down your list of new technologies that supplanted their predecessor one doesn't have to think hard to realize the parallels you attempt to make with Bitcoin do not apply.

The iPhone and automobiles were truly a technological leap over their predecessor. I'm sorry but it is absolutely a stretch to pretend that Monero can claim that. Monero boasts one important additional feature but its technological "superiority" is certainly not on the level of, for example, Bitcoin over fiat.

Other examples you've pulled up are irrelevant since they came at absolutely no cost to the user. It was trivial for users to switch from myspace to Facebook or from netscape to IE. As it relates to money that is absolutely not the case.

I think where we seem to disagree is that you suggest that Monero has "overwhelming technological superiority" where as from where I stand it really only improves on one of the many important features of money.

Interesting. Thank you.

Please do not fall into this mistake of inferring Bitcoin's superiority on the basis of its userbase.

The headstart is much more than a simple number of users. It is a complex history where time, trust and capital growth are much more important than a simple assessment of its userbase. A very organic process which can scarcely be reproduced.

Have you contemplated the idea that by purchasing Monero through either fiat or Bitcoin you are also "starting" from a public asset?  

I'm not sure how that holds. As much as there is value in privacy/anonymity there also is a lot in transparency.

I find myself mostly in agreement with your view that a private ledger could complement a public one but I'm not convinced this is sustainable if we somehow become able to transact privately within the public ledger.

It should be clear by now that even considering some kind of flexible cap scheme is implemented, it will also come with a solid hard cap it cannot surpass before a certain length of time.

My concern for Monero, one I have always expressed, is the likelihood of a sidechain-type service providing equivalent privacy while leveraging Bitcoin's network effect.

I also sat at the privacy related roundtable during last week's Scaling Bitcoin conference and it was mentioned many time that Monero could face the same scaling issues as Bitcoin and possibly worse given the apparent impossibility to prune the chain.

^^ your posts are always a great read. I agree with every single words, it is indeed a fantastic time to be alive. I pity the fact that I have only a little number of real life acquaintance I can share this excitement with 

Bitcoin seemed complicated and theoretical too at first.

I believe it's been said we could have a working implementation by next year.

You might also want to consider www.stashcrypto.com

This is obviously a long term plan but we are in no hurry to increase the limit considering we are now just barely grazing it.

It was first implemented as a spam limit and conventional wisdom suggests any time we approach it it is because of spam. Therefore you should understand why a lot of us don't see how it would be wise to raise it now as it is operating exactly as intended. 

There is no such thing as trustless, even if I find myself using the term often it really is a misnomer.

The more correct term is trust minimizing.

Second layers might involve a bit more trust but will come with order of magnitude more utility.

Do you absolutely need the security of Bitcoin's blockchain for your everyday transaction?

 

LambChop can at least pretend to some intelligence. You're just a noob and have been exposed as so on several occasions

There goes LambChop's cheerleader again... he doesn't need you buddy.