I agree with the premise that fungibility is important to Bitcoin's success, but I disagree that Bitcoin is 'flawed' or has in some way lost to Monero.
On a related note, I am happy about the conservative and careful pace of development of Bitcoin. I don't want my store of value to undergo risky development.
Bitcoin may not be dead but it is certainly being destroyed on its original purpose (being money).
The only reason to hold Bitcoin is the naive hope that more suckers (not even a better word for them) pay you to hold something they think will go higher (again: suckers)
There are networks that are faster / more secure than Bitcoin and therefore more valuable as usable money (which is what Bitcoin was supposed to be)
Bitcoin may be worth something, but it certainly isn't worth $11k in my opinion since it is just a community-decided value-store currently.
The same could be said for USD but at least USD is backed by the United States.
sure not being back by one is a value prop, but not being backed by any is a miss in my opinion. I think the decentralized is great, but it's so decentralized it's basically thin ice.
The futures market is coming in a few weeks, so if you ar so sure, you can short Bitcoin, but I wouldn't bet against the best store of value ever created.
I tx no where near the opportunity cost of a double spend on bitcoin.
I take your point, but it honestly seems a little much to assume that multiple players will act as one because they live in the same country. I haven't seen any evidence that the chinese govt controls what blocks are minted. A great counter example would be slower conf times from tx going to anti communist party groups. Does Ai weiwei have a bitcoin address?
The hash power that left BTC for BCC momentarily around early November was conveniently 60%.
One can imagine the ability of China to mobilize capital infrastructure to dominate mining space, especially when they're manufacturing all the bitcoin ASIC hardware.
It seemed like there were grave concerns once ASIC hardware hit BTC, locking normal people out and introducing an attack vector disproportionately favoring existing capital to take over the network.
If someone is willing to speculate (let's say suspecting BTC will burst, but not for a while yet), and that person is using spare money and cashing out after a week or two even, how are they a sucker?
Any person who's asked me about getting some Bitcoin has seemed perfectly aware of what could happen.
I got BTC at $900 (now approaching $12k). First got Monero at $70, and it's close to $250. Maybe I'll pick the wrong time to sell, but it's a risk I'm aware of. I've lost much more money on speculative stocks (backed by actual businesses with real assets) than I have put into this.
For anyone throwing in $100 just to be part of the adventure, I'd bet they've spent more than that on a single night getting drunk at the bar.
store of value adds very little value to the rest of the world yet to adopt it. buying bitcoin/sending it is more expensive than a wire transfer. this isn't what bitcoin was meant to be.
I no longer use bitcoin for anything other than HODLing, LTC has completely displaced it for as a means of exchange. That seems like the more important problem to solve for mass adoption. Can't have people paying for food/goods with bitcoin, it just won't work for that any more.
Bitcoin has a flat transaction rate for moving any amount of value. So yes, more expensive if the amount being transferred is low, and I mean really low.
Bitcoin's transaction fees are more complex than flat per transaction. It depends on the size of transaction which then in turn depends on how many incoming payments you have to combine into the amount of BTC you want to send. This has somewhat surprising and unfortunate high-level effect that the smaller transactions you do, the higher are fees for your future ones. The same is true for all cryptocurrencies where you spend transaction outputs (all bitcoin derived ones) instead of moving abstract numbers between "accounts" (ethereum), where the transaction fee is essentially flat and often insignificant. I'm not sure how Monero and Zcash works in this regard.
Edit: tl;dr: problem with bitcoin's transaction fees is that they are not flat, but instead depend on non-obvious technical details of the protocol.
While it is true that Bitcoin transaction sizes* vary depending on the coins available in your wallet (vs Ethereum only depends on the account), most of the volatility is based on the pricing of gas or bytes, not coin selection.
Also, pertaining to the original article, it's unclear if either ring signatures or bullet proofs can be made to work with an account model. Is there any examples of this?
*Bitcoin now measures transactions in weight, not size, a similar concept to Ethereum's gas (though much simpler)
You're close, since fungibility affects spendability.
In terms of currency, fungibility essentially means that money of the same denomination is indistinguishable.
So if I had a $5 bill that I got from a marijuana dispensary, and another $5 bill that came from the Treasury, at the register both of them would be equally treated as $5.
In the case of Bitcoin, fungibility is a bit harder to have since any merchant can parse the block history and find where a Bitcoin came from.
Tangentially, this also relates to the notion of privacy, since if you gave me a Bitcoin, I could also find the address of your wallet, and see outgoing or processed transactions -- like, this is pretty bad if you used the same wallet to buy drugs.
Bitcoin will eventually pull in the fungibility of Monero. Monero will stick around only as long as it remains relevant in point out that flaw in Bitcoin.
Privacy for cryptocurrencies is in its infancy. So no one has lost yet. Moreover there's space for more than one private coin. It's not zero sum. And yes, Bitcoin should probably take the most cautious path.
But one of the things we need to get past is people pointing to technical progress, usually involving better performance or some clever trick, and casting it as providing privacy.
This isn't a race to win on privacy, its a race to get real privacy. By default everything is totally exposed in a blockchain. It's far closer to twitter for your bank account then anonymous internet cash.
There are very real differences between the types of attacks the various technologies out there protect against and it's important people understand that because right now they are totally exposed. CT, which was what you pointed to in Bitcoin, hides payment values. CT doesn't directly do anything to hide the transaction graph. It can be combined with coinjoin to partially do that, but thats not whats implied here nor does faster CT really effect that. And anyone reading certainly wouldn't ask how well either of these actually protect the transaction graph. Which is a very real question.
Why does this matter? It's the difference between hiding if you overpaid for a car vs hiding if you made a controversial political donation, if you got an abortion, or your identity when purchasing controversial books or movies.
What are the current crop of cryptocurrencies that are truly anonymous? The list I have so far is: Aeon, DASH, Komodo, Monero , NAV Coin, PIVX, Verge, Zcash, Zcoin, and ZenCash.
This article feels like a puff piece for Monero, as opposed to a true discussion on the merits of anonymous cryptocurrency, which would minimally mention a subset of what you have listed above.
These coin all employ some anonymity features. Some real shallow (such a Verge only routing traffic over TOR) and some more elaborate (such as ZCash with zero knowledge proofs).
If you define truly anonymous as having no way to see transaction addresses and amounts, no way to check balances and history and these features all active by default... it would leave you with Monero and Aeon.
Of course other differences exist, such as vulnerable crytography (Zcoin), a potentially flawed "trusted setup" (ZCash, ZenCash), etc
Truly anonymous would mean if you bought $100 worth of anoncoin under your own name from an exchange and then played two hands of poker at an online casino, there would be no way for the casino and the exchange to collude and identifier you. Is that the case for any of the systems you listed?
Exchange gives you coin, and then have no way of telling what you did with it. Exchange just knows you are given 300 coins at the time of transaction, nothing more.
SafeCoin would be if it were actually implemented. As it currently stands, there is just a MaidSafeCoin token with a promise of a 1:1 exchange when SafeCoin gets implemented. Still, the concept is interesting. It's not blockchain-based, and a coin's data structure only contains the current and previous owner signatures.
Bitcoin is always fine. And the solution to bitcoin is always bitcoin. And in bitcoin, we'll bitcoin that bitcoin will be just bitcoin. Bitcoin and see.
> How would you feel if you were required to print, in legible block letters, your full name on every dollar bill before you spent it?
I already do this with 99% of my purchases. I almost solely purchase through credit card, which is a contractual obligation that my clearly identified person will allow a financial institution to pay for this coffee on my behalf, on promise I will pay that institution back at a later time.
I fully expect that institution to carry a full record of my purchases, and these days I expect them to share some subset of that data with whoever they see fit. It's just the world we live in.
I never carry cash with me, except for the rare occasions I know I'll be going to a cashless enterprise, which is becoming exceedingly rare where I live.
I have been looking into Monero for a few months. As a Bitcoin enthousiast I find the Monero community very friendly, hard working and seemingly disinterested.
If the argument is ever "the government could force X to do Y" then you need to finish your thinking.
If the government taxes mixed coins they will extend that tax to coins where it is impossible to detect. "Prove me they weren't mixed" is just as easy for the IRS to say as "prove to me that you bought at $500/BTC".
If anything, Bitcoin's track-ability is likely going to give it some thin veneer of government acceptance, even if I think that people underestimate how careful the truly evil can be.
Is there any particular reason why, assuming that the author is correct and that people will eventually want to migrate to a more anonymous currency, that Monero will be the winner and not some other anonymous currency?
(I don't pay close attention to cryptocurrencies, so this is the first time I've read of Monero.)
The author fails to understand that fungibility is tangential at best to anonymity.
fungibility is based on the equality of a unit of stuff. short selling works with fungibility, you hire some shares of IBM. Once you have them you sell them, when the price drops you buy them back. The hire period ends and you return the same number of shares, but not the same shares. This works because it is agreed that shares of the same time in a company are all agreed to have the same value.
but, this principle works with anything that has uniformity of price. This is determined by the trading environment, and not the thing being traded. Stocks nominally have unique IDs, at least for accounting purposes (otherwise how do you stop unauthorised re-issuing, and distribute dividends)
Gold is fungible, as pointed out, but anonymous gold is worth less than gold with provenance. To prove that gold hasn't been messed with is expensive, so keeping accurate and verifiable chains of custody is required for fast trade of gold.
Sure one can melt down gold and make it anonymous, but thats expensive. You can barter with your local drug lord using physical gold bullion, but you'll need to be damn sure its verifiably pure, so you'd better hope the serial number and foundry stamped on the front checks out.
Its far quicker to just transfer the ownership of bullion in a known vault, and that has certain guarantees about custody, purity and security of product.
In short, the author fundamentally fails to understand basic commerce, let alone post enlightenment stock markets.
one stock is the same as others, but you can have tainted coins that you obtained through legal means (it is just that the source was invalid). With BTC exchanges can block cashing out, for example.
60 comments
[ 4.6 ms ] story [ 116 ms ] threadThere was an update yesterday on the progress being made on privacy features in Bitcoin: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017...
On a related note, I am happy about the conservative and careful pace of development of Bitcoin. I don't want my store of value to undergo risky development.
The only reason to hold Bitcoin is the naive hope that more suckers (not even a better word for them) pay you to hold something they think will go higher (again: suckers)
There are networks that are faster / more secure than Bitcoin and therefore more valuable as usable money (which is what Bitcoin was supposed to be)
Bitcoin may be worth something, but it certainly isn't worth $11k in my opinion since it is just a community-decided value-store currently.
The same could be said for USD but at least USD is backed by the United States.
Absolutely.
But if no one is backing it and it has no purpose that supports its value, it shouldn't be worth a lot.
Monero is underpriced because it is actually useful and can support that price.
Bitcoin is worth something, just not 11k in my opinion.
I take your point, but it honestly seems a little much to assume that multiple players will act as one because they live in the same country. I haven't seen any evidence that the chinese govt controls what blocks are minted. A great counter example would be slower conf times from tx going to anti communist party groups. Does Ai weiwei have a bitcoin address?
One can imagine the ability of China to mobilize capital infrastructure to dominate mining space, especially when they're manufacturing all the bitcoin ASIC hardware.
It seemed like there were grave concerns once ASIC hardware hit BTC, locking normal people out and introducing an attack vector disproportionately favoring existing capital to take over the network.
Any person who's asked me about getting some Bitcoin has seemed perfectly aware of what could happen.
I got BTC at $900 (now approaching $12k). First got Monero at $70, and it's close to $250. Maybe I'll pick the wrong time to sell, but it's a risk I'm aware of. I've lost much more money on speculative stocks (backed by actual businesses with real assets) than I have put into this.
For anyone throwing in $100 just to be part of the adventure, I'd bet they've spent more than that on a single night getting drunk at the bar.
I no longer use bitcoin for anything other than HODLing, LTC has completely displaced it for as a means of exchange. That seems like the more important problem to solve for mass adoption. Can't have people paying for food/goods with bitcoin, it just won't work for that any more.
Edit: tl;dr: problem with bitcoin's transaction fees is that they are not flat, but instead depend on non-obvious technical details of the protocol.
Also, pertaining to the original article, it's unclear if either ring signatures or bullet proofs can be made to work with an account model. Is there any examples of this?
*Bitcoin now measures transactions in weight, not size, a similar concept to Ethereum's gas (though much simpler)
In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable
[1]: https://en.m.wikipedia.org/wiki/Fungibility
Am I thinking about liquidity?
In terms of currency, fungibility essentially means that money of the same denomination is indistinguishable.
So if I had a $5 bill that I got from a marijuana dispensary, and another $5 bill that came from the Treasury, at the register both of them would be equally treated as $5.
In the case of Bitcoin, fungibility is a bit harder to have since any merchant can parse the block history and find where a Bitcoin came from.
Tangentially, this also relates to the notion of privacy, since if you gave me a Bitcoin, I could also find the address of your wallet, and see outgoing or processed transactions -- like, this is pretty bad if you used the same wallet to buy drugs.
But one of the things we need to get past is people pointing to technical progress, usually involving better performance or some clever trick, and casting it as providing privacy.
This isn't a race to win on privacy, its a race to get real privacy. By default everything is totally exposed in a blockchain. It's far closer to twitter for your bank account then anonymous internet cash.
There are very real differences between the types of attacks the various technologies out there protect against and it's important people understand that because right now they are totally exposed. CT, which was what you pointed to in Bitcoin, hides payment values. CT doesn't directly do anything to hide the transaction graph. It can be combined with coinjoin to partially do that, but thats not whats implied here nor does faster CT really effect that. And anyone reading certainly wouldn't ask how well either of these actually protect the transaction graph. Which is a very real question.
Why does this matter? It's the difference between hiding if you overpaid for a car vs hiding if you made a controversial political donation, if you got an abortion, or your identity when purchasing controversial books or movies.
Any others?
Edit: Added Aeon
If you define truly anonymous as having no way to see transaction addresses and amounts, no way to check balances and history and these features all active by default... it would leave you with Monero and Aeon.
Of course other differences exist, such as vulnerable crytography (Zcoin), a potentially flawed "trusted setup" (ZCash, ZenCash), etc
https://news.ycombinator.com/item?id=15849236
Plus even without adding anything, bitcoin -> monero -> bitcoin solves the privacy problem.
I already do this with 99% of my purchases. I almost solely purchase through credit card, which is a contractual obligation that my clearly identified person will allow a financial institution to pay for this coffee on my behalf, on promise I will pay that institution back at a later time.
I fully expect that institution to carry a full record of my purchases, and these days I expect them to share some subset of that data with whoever they see fit. It's just the world we live in.
I never carry cash with me, except for the rare occasions I know I'll be going to a cashless enterprise, which is becoming exceedingly rare where I live.
If the government taxes mixed coins they will extend that tax to coins where it is impossible to detect. "Prove me they weren't mixed" is just as easy for the IRS to say as "prove to me that you bought at $500/BTC".
If anything, Bitcoin's track-ability is likely going to give it some thin veneer of government acceptance, even if I think that people underestimate how careful the truly evil can be.
(I don't pay close attention to cryptocurrencies, so this is the first time I've read of Monero.)
fungibility is based on the equality of a unit of stuff. short selling works with fungibility, you hire some shares of IBM. Once you have them you sell them, when the price drops you buy them back. The hire period ends and you return the same number of shares, but not the same shares. This works because it is agreed that shares of the same time in a company are all agreed to have the same value.
but, this principle works with anything that has uniformity of price. This is determined by the trading environment, and not the thing being traded. Stocks nominally have unique IDs, at least for accounting purposes (otherwise how do you stop unauthorised re-issuing, and distribute dividends)
Gold is fungible, as pointed out, but anonymous gold is worth less than gold with provenance. To prove that gold hasn't been messed with is expensive, so keeping accurate and verifiable chains of custody is required for fast trade of gold.
Sure one can melt down gold and make it anonymous, but thats expensive. You can barter with your local drug lord using physical gold bullion, but you'll need to be damn sure its verifiably pure, so you'd better hope the serial number and foundry stamped on the front checks out.
Its far quicker to just transfer the ownership of bullion in a known vault, and that has certain guarantees about custody, purity and security of product.
In short, the author fundamentally fails to understand basic commerce, let alone post enlightenment stock markets.