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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1805160 times)
rocks
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May 18, 2015, 10:45:01 PM
 #24261

Am debating what are the innate properties that constitute money. For the reasons stated in prior posts I do not consider privacy to be applicable to what makes good or bad money and do not see that as a factor towards driving adoption.

Privacy is not necessarily a property of money. Fungibility is a property of money though, and without strong legal guarantees of fungibility, it likely does require privacy because if you can trace "bad" or "good" coins then fungibility isn't there. Bitcoin currently doesn't have whitelisting/blacklisting, etc. (for the most part; there do seem to be some exceptions involving Coinbase, etc.) but as long as that concept is in play fungibility is a question.

Fully agree. But as HeliKopterBen and dEBRUYNE pointed out a few posts ago, a fully private currency such as Monero could just as easily be outlawed in it's entirety. Which puts Monero in the same position as a Bitcoin where blacklist coins are outlawed.

Legally yes, but in terms of fungibility no. If I'm a fully compliant Bitcoin user I may -- purely as a practical matter -- have to check on coins I'm receiving to see if they are "bad", and because coins may be added to a blacklist (or removed from a whitelist) after I receive them, it means I'm left with performing my own KYC to convince myself that the counterparty is unlikely to be passing off "bad" coins.

I'm not doing this because the law requires it but because I'm worried about being left holding the bag with "bad" coins, even if the transaction itself is entirely legal. This is fundamentally incompatible with the concept of fungibility (again, which is distinct from legality).

The risk of this is fungibility concerns is far less to nonexistent with a private coin, where tagging coins as "good" or "bad" is technologically less feasible or impossible (Monero is not as private as say zerocash, so some issues remain there, but far less so than Bitcoin).

The only reason you would ever be worried about receiving "bad" coins would be because of some legal framework that makes such coins possibility "bad". The exact same legal framework could make 100% of Monero's coins "bad". And you're back to square one.

My understanding of your argument is that in order to maintain fungibility, you need privacy or else that fungibility will be attacked. My argument is both a private and a non-private coin can be equally attacked, and in that situation both have to equally resort to being used outside the legal framework in order to maintain fungibility, so I don't see an advantage of one over the other.
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kazuki49
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May 18, 2015, 10:49:10 PM
 #24262

The only reason you would ever be worried about receiving "bad" coins would be because of some legal framework that makes such coins possibility "bad". The exact same legal framework could make 100% of Monero's coins "bad". And you're back to square one.

My understanding of your argument is that in order to maintain fungibility, you need privacy or else that fungibility will be attacked. My argument is both a private and a non-private coin can be equally attacked, and in that situation both can be equally used outside the legal framework (i.e. Bitcoin and Monero will both still process "bad" coins with no discrimination) with fungibility untouched.

man that's some mental gymnastic you do, the math is simple, Bitcoin is not inherently fungible but no one is saying it is not or cannot be used as money because of what, you are free to keep using 1984-tokens in your future.
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May 18, 2015, 10:50:32 PM
 #24263

The only reason you would ever be worried about receiving "bad" coins would be because of some legal framework that makes such coins possibility "bad". The exact same legal framework could make 100% of Monero's coins "bad". And you're back to square one.  

Having to spend contraband coins in a public blockchain would feel awkward, a private chain suits the use case much better.

rocks
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May 18, 2015, 10:55:52 PM
 #24264

The only reason you would ever be worried about receiving "bad" coins would be because of some legal framework that makes such coins possibility "bad". The exact same legal framework could make 100% of Monero's coins "bad". And you're back to square one.  

Having to spend contraband coins in a public blockchain would feel awkward, a private chain suits the use case much better.

Bitcoin plus this (or any number of other extensions)

enables Bitcoin to be used in a completely private manner. I don't see any difference between Bitcoin with these easy extensions in how it is used, and Monero.

That and there is no difference in the level of "contrabandness" between contraband coins in a public blockchain and a private chain that is declared to be entirely contraband.
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May 18, 2015, 10:59:55 PM
 #24265

Am debating what are the innate properties that constitute money. For the reasons stated in prior posts I do not consider privacy to be applicable to what makes good or bad money and do not see that as a factor towards driving adoption.

Privacy is not necessarily a property of money. Fungibility is a property of money though, and without strong legal guarantees of fungibility, it likely does require privacy because if you can trace "bad" or "good" coins then fungibility isn't there. Bitcoin currently doesn't have whitelisting/blacklisting, etc. (for the most part; there do seem to be some exceptions involving Coinbase, etc.) but as long as that concept is in play fungibility is a question.

Fully agree. But as HeliKopterBen and dEBRUYNE pointed out a few posts ago, a fully private currency such as Monero could just as easily be outlawed in it's entirety. Which puts Monero in the same position as a Bitcoin where blacklist coins are outlawed.

Legally yes, but in terms of fungibility no. If I'm a fully compliant Bitcoin user I may -- purely as a practical matter -- have to check on coins I'm receiving to see if they are "bad", and because coins may be added to a blacklist (or removed from a whitelist) after I receive them, it means I'm left with performing my own KYC to convince myself that the counterparty is unlikely to be passing off "bad" coins.

I'm not doing this because the law requires it but because I'm worried about being left holding the bag with "bad" coins, even if the transaction itself is entirely legal. This is fundamentally incompatible with the concept of fungibility (again, which is distinct from legality).

The risk of this is fungibility concerns is far less to nonexistent with a private coin, where tagging coins as "good" or "bad" is technologically less feasible or impossible (Monero is not as private as say zerocash, so some issues remain there, but far less so than Bitcoin).

The only reason you would ever be worried about receiving "bad" coins would be because of some legal framework that makes such coins possibility "bad". The exact same legal framework could make 100% of Monero's coins "bad". And you're back to square one.

No you're not because if all coins are bad then all coins have the same value. You can't overpay and be left holding the bag.

That is the definition of fungibility. Again, you are confusing privacy with fungibility. Without regard for the merits of either/both.
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May 18, 2015, 11:01:21 PM
 #24266

The only reason you would ever be worried about receiving "bad" coins would be because of some legal framework that makes such coins possibility "bad". The exact same legal framework could make 100% of Monero's coins "bad". And you're back to square one.  

Having to spend contraband coins in a public blockchain would feel awkward, a private chain suits the use case much better.

Bitcoin plus this (or any number of other extensions)

enables Bitcoin to be used in a completely private manner. I don't see any difference between Bitcoin with these easy extensions in how it is used, and Monero.

Far be it from me that I were against Bitcoin! I am one of the few people who even owns a Bitcoin castle!  Grin

But using monero is just soo easy that even if BTC fungibility is fixed and markets would force me to return to it, I would miss the ease of life when it was possible just to click "send" and not care...  Cheesy

smooth
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May 18, 2015, 11:04:09 PM
 #24267

The only reason you would ever be worried about receiving "bad" coins would be because of some legal framework that makes such coins possibility "bad". The exact same legal framework could make 100% of Monero's coins "bad". And you're back to square one.  

Having to spend contraband coins in a public blockchain would feel awkward, a private chain suits the use case much better.

Bitcoin plus this (or any number of other extensions)

enables Bitcoin to be used in a completely private manner. I don't see any difference between Bitcoin with these easy extensions in how it is used, and Monero.

The difference is mixing. Bitcoin doesn't have mixing without using some sort of third party mixing process, and that payment code proposal doesn't provide one either. The coins remain traceable on the blockchain.

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May 18, 2015, 11:10:49 PM
 #24268

We don't know that Coinbase limits their tracking of "bad" activity to "one hop." In fact I'm pretty sure at least one of the reported cases was more than one hop.
Part of the consideration that went into the payment code proposal was finding a way to make analysis of transactions impossible beyond one hop.

Even if they want to do multi-hop analysis, it's possible to make that unfeasible.
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May 18, 2015, 11:12:20 PM
 #24269

The coins remain traceable on the blockchain.


The coins are traceable, but the link between the coins and to whom they belong is less so.
smooth
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May 18, 2015, 11:16:11 PM
 #24270

The coins remain traceable on the blockchain.


The coins are traceable, but the link between the coins and to whom they belong is less so.

That's irrelevant to the extent that blacklisting or whitelisting (or the prospect of such) impair the value of those coins.

rocks
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May 18, 2015, 11:20:20 PM
 #24271

Am debating what are the innate properties that constitute money. For the reasons stated in prior posts I do not consider privacy to be applicable to what makes good or bad money and do not see that as a factor towards driving adoption.

Privacy is not necessarily a property of money. Fungibility is a property of money though, and without strong legal guarantees of fungibility, it likely does require privacy because if you can trace "bad" or "good" coins then fungibility isn't there. Bitcoin currently doesn't have whitelisting/blacklisting, etc. (for the most part; there do seem to be some exceptions involving Coinbase, etc.) but as long as that concept is in play fungibility is a question.

Fully agree. But as HeliKopterBen and dEBRUYNE pointed out a few posts ago, a fully private currency such as Monero could just as easily be outlawed in it's entirety. Which puts Monero in the same position as a Bitcoin where blacklist coins are outlawed.

Legally yes, but in terms of fungibility no. If I'm a fully compliant Bitcoin user I may -- purely as a practical matter -- have to check on coins I'm receiving to see if they are "bad", and because coins may be added to a blacklist (or removed from a whitelist) after I receive them, it means I'm left with performing my own KYC to convince myself that the counterparty is unlikely to be passing off "bad" coins.

I'm not doing this because the law requires it but because I'm worried about being left holding the bag with "bad" coins, even if the transaction itself is entirely legal. This is fundamentally incompatible with the concept of fungibility (again, which is distinct from legality).

The risk of this is fungibility concerns is far less to nonexistent with a private coin, where tagging coins as "good" or "bad" is technologically less feasible or impossible (Monero is not as private as say zerocash, so some issues remain there, but far less so than Bitcoin).

The only reason you would ever be worried about receiving "bad" coins would be because of some legal framework that makes such coins possibility "bad". The exact same legal framework could make 100% of Monero's coins "bad". And you're back to square one.

No you're not because if all coins are bad then all coins have the same value. You can't overpay and be left holding the bag.

That is the definition of fungibility. Again, you are confusing privacy with fungibility. Without regard for the merits of either/both.

I don't think so, it seems to be that you've confused them. I think my prior posts (that weren't quoted) explained why. Fungibility is an innate property, privacy is a question of usage. You're free to disagree but I'll still think that these arguments that a coin needs privacy to be built in or off the mark.

Fungibility also doesn't mean how I think you are using it. Even in your black/white coin scenario, Bitcoin coins are still 100% fungible, the bitcoin network will treat 1 BTC as 1 unit and 0.5 BTC as half a unit in all cases (i.e. to the network 1 BTC blacklist = 1 BTC whitelist), that is perfect fungibility.

Things such as dimonds are not fungible, different people will value 2 different one caret diamonds differently. That is an example of something not fungible. Not black/white market coins where a government might try to force different values for them, but the network would treat them identically.
smooth
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May 18, 2015, 11:21:52 PM
 #24272

We don't know that Coinbase limits their tracking of "bad" activity to "one hop." In fact I'm pretty sure at least one of the reported cases was more than one hop.
Part of the consideration that went into the payment code proposal was finding a way to make analysis of transactions impossible beyond one hop.

Even if they want to do multi-hop analysis, it's possible to make that unfeasible.

I don't think you understand what Coinbase is doing. For example, even with non-reused addresses, compliant participants may report their addresses to a risk-scoring service. If you go outside that "system", boom your coins risk score goes way up.

As long as these things remain associated with the coins themselves, fungibility is impaired.
rocks
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May 18, 2015, 11:25:06 PM
 #24273

We don't know that Coinbase limits their tracking of "bad" activity to "one hop." In fact I'm pretty sure at least one of the reported cases was more than one hop.
Part of the consideration that went into the payment code proposal was finding a way to make analysis of transactions impossible beyond one hop.

Even if they want to do multi-hop analysis, it's possible to make that unfeasible.

I don't think you understand what Coinbase is doing. For example, even with non-reused addresses, compliant participants may report their addresses to a risk-scoring service. If you go outside that "system", boom your coins risk score goes way up.

As long as these things remain associated with the coins themselves, fungibility is impaired.

This is where we are disagreeing then.

To the bitcoin network 1 BTC blacklist or low score coin = 1 BTC whitelist coin. They are perfectly the same to the network itself, that is fungibility. This is very different from the diamond example a post up.

You can argue that for gold you could melt it down and recast in new coins to recover all privacy, but I'd argue that advanced mixing could do the same in time.
smooth
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May 18, 2015, 11:26:02 PM
 #24274

Am debating what are the innate properties that constitute money. For the reasons stated in prior posts I do not consider privacy to be applicable to what makes good or bad money and do not see that as a factor towards driving adoption.

Privacy is not necessarily a property of money. Fungibility is a property of money though, and without strong legal guarantees of fungibility, it likely does require privacy because if you can trace "bad" or "good" coins then fungibility isn't there. Bitcoin currently doesn't have whitelisting/blacklisting, etc. (for the most part; there do seem to be some exceptions involving Coinbase, etc.) but as long as that concept is in play fungibility is a question.

Fully agree. But as HeliKopterBen and dEBRUYNE pointed out a few posts ago, a fully private currency such as Monero could just as easily be outlawed in it's entirety. Which puts Monero in the same position as a Bitcoin where blacklist coins are outlawed.

Legally yes, but in terms of fungibility no. If I'm a fully compliant Bitcoin user I may -- purely as a practical matter -- have to check on coins I'm receiving to see if they are "bad", and because coins may be added to a blacklist (or removed from a whitelist) after I receive them, it means I'm left with performing my own KYC to convince myself that the counterparty is unlikely to be passing off "bad" coins.

I'm not doing this because the law requires it but because I'm worried about being left holding the bag with "bad" coins, even if the transaction itself is entirely legal. This is fundamentally incompatible with the concept of fungibility (again, which is distinct from legality).

The risk of this is fungibility concerns is far less to nonexistent with a private coin, where tagging coins as "good" or "bad" is technologically less feasible or impossible (Monero is not as private as say zerocash, so some issues remain there, but far less so than Bitcoin).

The only reason you would ever be worried about receiving "bad" coins would be because of some legal framework that makes such coins possibility "bad". The exact same legal framework could make 100% of Monero's coins "bad". And you're back to square one.

No you're not because if all coins are bad then all coins have the same value. You can't overpay and be left holding the bag.

That is the definition of fungibility. Again, you are confusing privacy with fungibility. Without regard for the merits of either/both.

I don't think so, it seems to be that you've confused them. I think my prior posts (that weren't quoted) explained why. Fungibility is an innate property, privacy is a question of usage. You're free to disagree but I'll still think that these arguments that a coin needs privacy to be built in or off the mark.

Fungibility also doesn't mean how I think you are using it. Even in your black/white coin scenario, Bitcoin coins are still 100% fungible, the bitcoin network will treat 1 BTC as 1 unit and 0.5 BTC as half a unit in all cases, that is perfect fungibility.

Things such as dimonds are not fungible, different people will value 2 different one caret diamonds differently. That is an example of something not fungible. Not black/white market coins where a government might try to force different values for them, but the network would treat them identically.

Correct about diamonds. Incorrect about cryptocurrncies. Fungibility means that units are interchangeable. Bitcoins are not interchangeable as long as they have an identifiable history. And in practice participants such as Coinbase are taking that history into account in evaluating coins and users.

Take a look at that post from a long time ago about "Bitcoin Island". If Bitcoins (really satoshis) are plots of land, which is in many ways a reasonable analogy, then they are not interchangeable. They become interchangeable with a pervasive mixing process, but at present in Bitcoin that doesn't exist, and may or may not ever exist (the greater the role of participants who are invested in AML/KYC processes, the less likely it is that will ever exist).

Fungibility isn't totally an inherent property either, there is a social context. Paper currency has serial numbers so in a technical sense it isn't totally fungible. However, the extent to which people pay attention to those serial numbers is every limited. If the social context changed so serial number scanners became widely used, paper currency would not be fungible by its nature.
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May 18, 2015, 11:26:45 PM
 #24275

The 6-7 properties of money were written thousands of years ago, people. Technology, including "anti-money" technology, has come on a little since then. Privacy is a property of money since at least some point in the 20th century.

Furthermore, cryptocurrency brings a whole new set of (so far) necessary properties. There's no need to compartmentalise "classical money" properties from those which have been added during it's subsequent evolution.

Vires in numeris
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May 18, 2015, 11:35:09 PM
 #24276

Paper currency has serial numbers so in a techical sense it isn't totally fungible. However, the extent to which people pay attention to those serial numbers is every limited. If the social context changed so serial number scanners became widely used, paper currency would not be fungible by its nature.

Apparently, the serial numbers on Euro notes dispensed in a given official Euro country can be used to identify which country they were produced for (although they're intended to be equally accepted). Irrational as it may be, some people will ostensibly reject notes thought to come from the PIIGS countries.

Vires in numeris
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May 18, 2015, 11:44:43 PM
 #24277

The 6-7 properties of money were written thousands of years ago, people. Technology, including "anti-money" technology, has come on a little since then. Privacy is a property of money since at least some point in the 20th century.

Furthermore, cryptocurrency brings a whole new set of (so far) necessary properties. There's no need to compartmentalise "classical money" properties from those which have been added during it's subsequent evolution.

I think it is important to determine what you "have" to have in a money instrument vs. what is "nice" to have vs. what "derives" from other properties. When arguments on which altcoin might be better start, the differences in opinion seem to often come down to this. I don't think the properties of ideal money have changed just because we are using a digital medium now. I also think with the right "have to have" properties, that you can layer on top of that the "nice to have" aspects. Anyway the market will decide.
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May 19, 2015, 12:06:06 AM
 #24278

The coins remain traceable on the blockchain.


The coins are traceable, but the link between the coins and to whom they belong is less so.

That's irrelevant to the extent that blacklisting or whitelisting (or the prospect of such) impair the value of those coins.



Not true. There have been numerous attempts to blacklist and track coins from every failed exchange in Bitcoin's history all the way back to MyBitcoin. Yet we all probably have those coins in our wallets to various degrees.
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May 19, 2015, 12:10:29 AM
 #24279

The 6-7 properties of money were written thousands of years ago, people. Technology, including "anti-money" technology, has come on a little since then. Privacy is a property of money since at least some point in the 20th century.

Furthermore, cryptocurrency brings a whole new set of (so far) necessary properties. There's no need to compartmentalise "classical money" properties from those which have been added during it's subsequent evolution.

I think it is important to determine what you "have" to have in a money instrument vs. what is "nice" to have vs. what "derives" from other properties. When arguments on which altcoin might be better start, the differences in opinion seem to often come down to this. I don't think the properties of ideal money have changed just because we are using a digital medium now. I also think with the right "have to have" properties, that you can layer on top of that the "nice to have" aspects. Anyway the market will decide.


So, new innovations in anti-money tools don't change the fundamental characteristics of money itself?

Vires in numeris
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May 19, 2015, 12:31:23 AM
 #24280

The coins remain traceable on the blockchain.


The coins are traceable, but the link between the coins and to whom they belong is less so.

That's irrelevant to the extent that blacklisting or whitelisting (or the prospect of such) impair the value of those coins.



Not true. There have been numerous attempts to blacklist and track coins from every failed exchange in Bitcoin's history all the way back to MyBitcoin. Yet we all probably have those coins in our wallets to various degrees.

Do you live under a rock? Cheesy BTC-e already showed Bitcoin has no fungibility and coins can be blacklisted.
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