It's obviously way more than enough to prevent double spends.  But the inflation schedule is not debatable, and the exchange rate is not controllable, so go be windbags about something else.

I think it's a great idea.  It's been called "fidelity bonds" and "bitcoin passports" previously, and has been discussed here https://bitcointalk.org/index.php?topic=134827.0 and here https://bitcointalk.org/index.php?topic=140711.0.

If I didn't think my blacklist providers or their investigators were abusing their authority, then I'd participate in this, and I probably wouldn't even feel like I was "compromising" in doing so.  If it proved effective, then I'd continue to participate.  At the very least it shows a good faith effort by the community, and helps build political capital.  And maybe it even helps to track down some legitimately shitty people.

Whoa, ease off on the hyperbole.  I don't think you're giving our modern fiat currencies nearly enough credit (especially where physical cash will be phased out).  For example, how do you freeze an account under this proposal?  Can you still keep the existence of bitcoins you own secret?  Is (worldwide) coin mixing still a (potential) option when necessary?  Are anonymous, off-blockchain transactions still a (potential) option?

I also think you're underestimating how much serious coordination among all the governments of the world it would take to force a non-voluntary, repressive version of this that's actually effective.  This is not to say a voluntarily used version couldn't be effective - or at least more effective than the current tracking systems in place, whatever that's saying.  But it would at least be harder to abuse, and police would have to actually make phone calls and knock on doors, rather than simply scrape a database without any meaningful consent.

And all the while, as adoption spreads, the human component of the network expands, along with awareness of monetary privacy issues and the political capital required to actually resist, rather than simply hide from, such abuses of power.  I believe people would be much more willing to make a fuss about something that affects them directly, like being enlisted as spies to their fellow citizens, than the current situation where they never actually see the abuse of privacy.  I also believe more aware people will be more willing to adopt better solutions as they may arise.

But clearly appeasing the authorities to a reasonable extent can also lead to Bitcoin being more freely traded.  It's pretty hard to freely trade an outlaw currency.  Let's face reality like adults.

Haha, I know where that's from

Not starting fresh at all though.  Cryptocurrency would have already made a big name for itself.  The UTXO set (current spendable coins) can be forked, so use is incentivized, and there's no speculative risk of being "on the wrong chain".  The weaknesses and proper countermeasures would be much clearer.  I'm sure there's more.

Thanks for the thoughtful post.

Edit: Though I hope it wouldn't ever come to having to create a separate underground chain, it's nice to have a contingency plan in mind.

What I find kind of ironic about all of this is that the first time I'd heard a proposal similar to yours for using a linkable digital currency for decentralized crime fighting was from a prominent anarcho-capitalist named Stefan Molyneux.  I guess they're just more receptive when these ideas are coming from one of their own.  Not to mention yours is vastly superior due to the cryptographic privacy guarantees.

That seems disingenuous.  What do small blocks do to prevent coin blacklists from being enforced by governments?

I heard Jacob Applebaum (from the Tor Project) say once that "the architecture defines the political situation", and like it or not, Bitcoin's architecture easily permits this, regardless of Mike's opinion about it.

I'm curious about how people here would react if it became clear that a government ban on Bitcoin was being considered for the reasons Mike mentioned, and your political action wasn't likely to change this outcome.  Would you be willing to compromise and participate in such a self-policing proposal?  Would you thumb your nose at the authorities, and let them ban it?  Or would you perhaps go along with this for Bitcoin, but while participating in an underground fork (which avoids the chaos of transactions being valid on both chains somehow) whose focus was on extreme technical countermeasures to censorship and surveillance?  Or some other option?

With large blocks supporting say 2000 tps, if 20% of transactors "do their part" and pay an economically insignificant $0.01 fee - way more than enough to cover the microcent cost of the actual transaction - then this would add up to $2400 per block in mining fees.  Currently we've got about a $1500 block reward.

So if the optimal hash rate scales sub-linearly with the transaction rate, then it strikes me that if demand permits scaling up of block sizes, then relying on social pressure and client software defaults to yield lots of individually economically insignificant fees is also a solution to the problem of funding of network security.

It's about the law going forward.  Nobody had any certainty about that before.  Jesus, you're such a fucking buzzkill

You're not happy about having legal certainty, finally?

The 'De-Centralized Virtual Currencies' section was obviously written with Bitcoin as the prototypical example, and it's pretty clear what the spirit of the law is there IMO.

Yeah, I've been jumping with joy for the past 10 minutes

That's unsurprising
But it only limits the kinds of transactions we want to regulate in the first place...  Same as a block size limit makes it difficult to reliably get big, space wasting transactions confirmed.  It's up to miners and users to conform to economically optimal usage patterns of scarce block space, so why shouldn't the same apply to scarce UTXO space?
Cool, I know you agree that buying time seems to be the name of the game

That's true, it's not the rationale that was given before.  So if this is to be the current one (to be clear, it's just been my rationale), then it does bring the legitimacy of the pledges into question.  And you're right that it's not needed to prove any of these cases of fraud.

Excuse me while I think out loud for a minute...  On the one hand, having a trustworthy up-to-date commitment of the authenticated UTXO set - trustworthy because you haven't received any fraud proofs for it, and you assume you have at least one honest peer - would let you know for sure that a UTXO that you've received in a transaction hasn't been spent yet.  But on the other hand, it technically only requires one honest peer in the current arrangement to send you proof that such such a UTXO has been spent more recently than you've been led to believe.  So this proposed benefit seems kind of dubious...

The partial verification stuff is becoming less clear the more I think about it too...  But that's a far-in-a-hypothetical-future optimization anyway, to be made only if the number of full nodes becomes too low for comfort.  More important things to be funding currently IMHO.

I guess I'll have to eat my hat on this

Some txouts are bigger than others, so maybe the sum of the sizes of the txouts created minus the sum of the sizes of the txouts spent would be more appropriate?

This.

The argument that a block size limit is necessary to prevent excessive centralization applies equally well to a limit on the per block expansion of the utxo set.  So I think this justifies the creation of such a limit, if a block size limit is to be maintained.

Also, I don't see why we would need to have a single metric to describe usage of the two scarce resources, block space and utxo set space.  Wouldn't it be simpler to just have separate limits for both?  They consume distinct physical resources - bandwidth and storage, respectively - and so these parameters should be somewhat orthogonal.

Upon rereading this, a better response would have been to say that this new trust model is "trust what you haven't seen a valid fraud proof disputing".  So if no false updates in the authenticated UTXO set have been proved to you, you assume it to be valid.

It's okay to base a fraud proof on the assumption of validity of the authenticated UTXO set because one could simply construct a proof that it was invalidly updated in order to prove any fraud that followed from this assumption being false.  This is the same as for the other fraud proofs, which all rely on the assumption that previous blocks upon which it was built have been valid.

The partial verification stuff I mentioned in the first response is just icing on the cake that helps ensure that fraud proofs are very likely to be found, even in the event that few full nodes are looking for them.

Mike Hearn, Pieter Wuille, Jeff Garzik, and Gregory Maxwell all seem very capable.  I've ordered them from less to more conservative (in my view).

I find myself more in line with Mike Hearn, who seems more willing to push the boundaries of this experiment.  But Pieter Wuille seems very thoughtful, and I'd be happy with him taking the reigns as well.  Jeff Garzik and Gregory Maxwell are brilliant, but maybe a bit too conservative for my tastes.  No offense

That said, I think Gavin is doing an outstanding job, and I hope he lives 1000 years.

Edit: Though I'd be perfectly happy with any of these people leading development in the event that Gavin steps down.