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On anyone-can-spend Pay-to-Taproot outputs before activation

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Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#31

Post by user-the-name »

px43 wrote: post #21
stickac wrote: post #11

Earlier quoted context omitted.

The real artistry is to deploy updates without doing a hard fork. Taproot is one of these and it is very, very important.

It's not artistry, it's overly complex hackery to satiate some weird technological obsession. Even with a soft fork, everyone still needs to update their nodes to maintain consensus. BIP100 signalling would have fixed everything and avoided so much drama.

It's very important to maintain the illusion that the block size can't be changed.

Or the mining reward.

Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#32

Post by [deleted] »

rogueSkib wrote: post #27
arcticbull wrote: post #24

Earlier quoted context omitted.

That definition of inflation is old and discredited. Austrian economics is roughly speaking tinfoil hat economics. The modern definition is a change in purchasing power of a unit of currency, not solely of its supply. The reason is simple: if you have the treasury mint a $1T coin and give it to me, then I throw it in a vault, and do not spend it then prices do not change. As such, the Austrian model is obviously inco…

Your thought experiment is assuming that $1T is permanently locked "in a vault", therefore it is not actually part of the monetary supply, since it can't be spent without violating your assumption.

[deleted]

Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#33

Post by throwaway2048 »

rogueSkib wrote: post #27
arcticbull wrote: post #24

Earlier quoted context omitted.

That definition of inflation is old and discredited. Austrian economics is roughly speaking tinfoil hat economics. The modern definition is a change in purchasing power of a unit of currency, not solely of its supply. The reason is simple: if you have the treasury mint a $1T coin and give it to me, then I throw it in a vault, and do not spend it then prices do not change. As such, the Austrian model is obviously inco…

Your thought experiment is assuming that $1T is permanently locked "in a vault", therefore it is not actually part of the monetary supply, since it can't be spent without violating your assumption.

That's the point though, inflation depends a great deal on the velocity of money, as much or even more so than the total amount printed.

Money in a vault has zero velocity, money being spent dozens of times a day has a very high velocity, most situations lie between, we need a meaningful way of discussing this that "monetary supply" does not capture.

Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#34

Post by arcticbull »

rogueSkib wrote: post #27
arcticbull wrote: post #24

Earlier quoted context omitted.

That definition of inflation is old and discredited. Austrian economics is roughly speaking tinfoil hat economics. The modern definition is a change in purchasing power of a unit of currency, not solely of its supply. The reason is simple: if you have the treasury mint a $1T coin and give it to me, then I throw it in a vault, and do not spend it then prices do not change. As such, the Austrian model is obviously inco…

Your thought experiment is assuming that $1T is permanently locked "in a vault", therefore it is not actually part of the monetary supply, since it can't be spent without violating your assumption.

Not quite, it's not permanently locked, I have just decided not to spend it. Ditto money people squirrel away in mattresses or vaults. It is an analogy for a change in behavior of market participants over time which must by necessity be included in any complete model of an economic and monetary system. Broadly speaking, "velocity."

This system remains at equilibrium because supply went up, and velocity went down leading to neutral price action.

It analogizes this graph: https://fred.stlouisfed.org/series/PSAVERT

Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#35

Post by xiphias2 »

vecio wrote: post #18

The miner can include some non-standard transactions makes Bitcoin not so perfect, and once that non-standard transactions included in a block, other miners won't validate its script at all, that make it worse.

Nodes don't relay non standard transactions to be mined, but blocks with non standard transactions are relayed and accepted by all nodes. These rules together make soft forks possible.

Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#36

Post by samatman »

arcticbull wrote: post #5
chejazi wrote: post #4

Ah, a soft fork focused on SegWit transactions. Every time I try and follow along with the latest in Bitcoin I just don't get that excited. I think that's part of the point, though. "Hard money" and all.

Hard money doesn't exhibit 15000% annualized inflation in a one-month period. That Weimar Republic behavior. Don't get me wrong, I'm not mad about that - it's made me tons of money on the short side. I'm just saying, it's bad money.

No one has ever tried to take a ledger from the unit of account representing no value to representing value on a global scale. Every historical money has come from a cultural context where the token was valuable, beautiful, or frequently both.

When people point out Bitcoin's volatility, I wonder how else this could be accomplished on a decentralized and voluntary basis.

Which isn't to say that BTC will achieve that, of course. But unless it does, how could it possibly have a stable value in between? It's either worth $0 or ~$1-10mm per Bitcoin, and the market is having a vigorous argument about which.

Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#37

Post by arcticbull »

samatman wrote: post #36
arcticbull wrote: post #5

Earlier quoted context omitted.

Hard money doesn't exhibit 15000% annualized inflation in a one-month period. That Weimar Republic behavior. Don't get me wrong, I'm not mad about that - it's made me tons of money on the short side. I'm just saying, it's bad money.

No one has ever tried to take a ledger from the unit of account representing no value to representing value on a global scale. Every historical money has come from a cultural context where the token was valuable, beautiful, or frequently both. When people point out Bitcoin's volatility, I wonder how else this could be accomplished on a decentralized and voluntary basis. Which isn't to say that BTC will achieve that,…

Some market participants are. Certainly the wildcat banks and Paolo Ardoino are having an argument with reality.

Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#38

Post by dcolkitt »

arcticbull wrote: post #16
dcolkitt wrote: post #15

Earlier quoted context omitted.

I mean, you're being a little silly by comparing a short-term market gyration to "annualized inflation". The Yen is down 38 basis points against the dollar today. Nobody would describe that as "exhibiting 135% annualized inflation".

True, but there's a big difference between dropping 38 basis points and losing 57% of its purchasing power. [edit] more importantly, the yen may have dropped 38 basis points against the dollar, however that doesn't necessarily represent a drop in domestic purchasing power at all. Just foreign purchasing power. This change makes imports into Japan more expensive and exports of Japanese products denominated in dollars…

Peak-to-trough, the Pound Sterling lost about 25% of its value against the Deutsche Mark during Black Wednesday. It lost about 30% over Brexit. The Aussie dollar fell about 35% against USD during the 2008 financial crisis. The Euro fell approximately 40% against the Swiss franc over the 2011 sovereign debt crisis.

So yes, "real currencies" can and do fluctuate significantly in terms of exchange rates. It simply makes no sense to contextualize exchange rate fluctuations as "annualized inflation".

Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#39

Post by arcticbull »

dcolkitt wrote: post #38
arcticbull wrote: post #16

Earlier quoted context omitted.

True, but there's a big difference between dropping 38 basis points and losing 57% of its purchasing power. [edit] more importantly, the yen may have dropped 38 basis points against the dollar, however that doesn't necessarily represent a drop in domestic purchasing power at all. Just foreign purchasing power. This change makes imports into Japan more expensive and exports of Japanese products denominated in dollars…

Peak-to-trough, the Pound Sterling lost about 25% of its value against the Deutsche Mark during Black Wednesday. It lost about 30% over Brexit. The Aussie dollar fell about 35% against USD during the 2008 financial crisis. The Euro fell approximately 40% against the Swiss franc over the 2011 sovereign debt crisis. So yes, "real currencies" can and do fluctuate significantly in terms of exchange rates. It simply makes…

To be clear, inflation isn't exchange rates. That's a change in how much you can buy in a foreign country with your currency - and how much of your goods they can buy with a unit of their currency, not how much you can buy at home.

Bitcoin's purchasing power fell equivalently the world over and so inflation is a more useful benchmark to compare the loss in purchasing power than foreign exchange is.

Re: On anyone-can-spend Pay-to-Taproot outputs before activation

#40

Post by rogueSkib »

throwaway2048 wrote: post #33
rogueSkib wrote: post #27

Earlier quoted context omitted.

Your thought experiment is assuming that $1T is permanently locked "in a vault", therefore it is not actually part of the monetary supply, since it can't be spent without violating your assumption.

That's the point though, inflation depends a great deal on the velocity of money, as much or even more so than the total amount printed. Money in a vault has zero velocity, money being spent dozens of times a day has a very high velocity, most situations lie between, we need a meaningful way of discussing this that "monetary supply" does not capture.

I think Lyn Alden does a good job separating velocity from inflation in this article: https://www.lynalden.com/inflation/

  There is a common idea that high monetary velocity (GDP divided by broad money supply) is needed for inflation. However, the data show that this is not the case.
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