Why Nostr? What is Njump?
2024-05-27 19:07:46
in reply to

Leo Fernevak on Nostr: He's right, at least on this matter. The reason I say this with confidence is because ...

He's right, at least on this matter.

The reason I say this with confidence is because the Bitcoin protocol that everyone have invested in is precisely what we have, not what someone wants it to become.

Bitcoin's fundamental function is store of value. Privacy tools are added over the base layer on an opt-in basis.

A vital function of Bitcoin is the game theory level. Bitcoin has a design that allows it to pressure jurisdictions towards liberty-oriented policies *because* it is the best store of value.

If we consider the tradeoffs that Monero makes, we can understand why Monero is not aiming for a store of value. As a result, Monero cannot leverage a pressure against jurisdictions in any comparable way.

Those who want Bitcoin to become more like Monero, while the privacy side benefits are tempting, such a move would undermine Bitcoin's function as store of value and several of its game theory benefits.

On a related subject, I wrote recently about why tainted bitcoin/sats is a losing strategy by the jurisdiction implementing it. If Bitcoin became more Monero-like, then the game theory involved will have different outcomes. The assumptions are based on Bitcoin being a superior store of value and therefore desirable by nation states, which gives it powers to pressure jurisdictions.

Why tainted coins is a losing strategy:
A few thoughts on the game theory of tainted bitcoin.

TLDR; taint cannot work over time.

Let's visualize a possible scenario where a jurisdiction, for example the EU, decides to classify certain bitcoin addresses as tainted.

A few expected outcomes:

1. Many entrepreneurs would likely leave the EU in reaction, either because they own bitcoin or because they consider the regulatory move to be a red flag indicating more coming authoritarian measures. If A happens, then a logical B can be expected to follow.

These entrepreneurs won't take their bitcoin *with them* because all bitcoin exists globally without borders and their bitcoin are already waiting for them in the new jurisdiction. Their bitcoin does not move when they move, but their spending is now relocated outside of the backwards jurisdiction.

2. Let's then assume that some entrepreneurs have had their bitcoins classified as tainted by the EU. As they settle in a new jurisduction - which doesn't care about the EU:s taint decisions - these "EU-tainted" coins are soon entering the economy and switching hands. Nobody in a free economy has any reason to care about the dictatorial phantasmas of the EU.

3. After these coins/sats spread in the free market economy, they will eventually end up in contact with the EU again. At that point, the coins are now integrated in the economy and the "EU-taint" will be considered obsolete.

If the EU decides to keep rejecting the "EU-tainted" coins/sats, the EU will lose out on more and more commerce due to self-quarantine. The number of tainted coins will grow over time and the EU will have to eliminate themselves from an in increasing amount of valuable trade.

Over time the taint policy will become so ridiculous and economically harmful for the EU that there won't be any public support to keep the taint regulations.

Besides, as the coins/sats have moved through the free, prosperous and just jurisdictions of the world where property rights are respected, the laggard economies that issued the taint will have little incentive to remain laggards. Or Lagarde's, as they may end up being called.

Don't be a Laggarde!

#Bitcoin #Taint #GameTheory #PropertyRights #Property #Rights #IndividualRights #Individual #FreeMarkets #Free #Markets #Voluntarism #Libertarian
Author Public Key
npub1y02f89rpykzhqmrjjz99uwgyl9gh06sg0vpjmklu62rzxpx8mxps7zfvpl