fnietom @[email protected]

"State recognition of a commodity as money may give it the character of money in the legal sense, but not in the economic sense" - Carl Menger.

5. Unless you don't think a trust-minimal asset will always be demanded by the market, why would you want to go through all these shenanigans?

P.S. While this is an extreme case for clarity, much smaller levels of DC fee revenue may affect Bitcoin incentives and represent a damage to bitcoin owners.

3. This split can be expected to spread to Bitcoin. If DC fees dominate, the race would otherwise be won by the fork with more valuable DC transactions, regardless of whether it maximizes bitcoin value or not.

Bitcoin transaction demand ≠ bitcoin demand.

4. I tend to believe Bitcoin would likely split in 3 in such scenario, as some holders may prefer to remove DC induced risk altogether and disallow Drivechains (potentially dominant hashrate escrows in general).

Why would Bitcoin become incentive incompatible if Drivechains are allowed?

Because coin value maximization (i.e. risk/trust minimization) may stop being the main driver of tx fees.

1. Let's say over 2/3 of Bitcoin miner fees end up coming from DC transaction fees, through BMM.

2. Then, for some reason, the DC splits in two forks with similar hashpower, making unclear what side would win a race to withdraw coins to the main chain.

9/ Putting the misconceptions aside, I really enjoyed some of the anecdotes in the second half of the paper, where he also makes some valid points. He just seems sore to have missed some of the "wealth transfer to the cartel of early bitcoin adopters".

8/ It is a common mistake to think that a medium of exchange must be commonly accepted (CAMOE), i.e. money, in order to have monetary value (apart of its use value). Most economists would benefit from a careful reading of Menger's Theory of Commodities.

7/ The rational consequence of his statement about bitcoin being worth 0 can only be that he owns a load of put options.

Is he trying to shift what "we expect that we will expect", so bitcoin loses its appeal to us and "then the value must be zero now"? Good luck with that!

6/ Taleb seems also unaware of the fact that bitcoin provides much greater assurances for the preservation of wealth without trust requirements than any other asset available, including precious metals. And that is something useful for many who feel their wealth threatened.

5/ He seems to ignore the cost of carry that dilution represents for gold holders.

Bitcoin is a fixed set of units, so that cost will become zero.

Technology is just there to enable the command of them with minimal trust requirements, or need for TTP to enforce property rights.

4/ Asserting that "The value will be zero when miners are extinct" can only be considered Labour Theory of Value. Don't worry about miners. If bitcoin is *subjectively* useful to someone, they will be there to help securing new transactions. Bitcoin is not just its technology.

3/ Bitcoin depends no more "on the existence of miners for perpetuity" in order to secure new transactions than gold does on vaults, guarded convoys or trusted third parties to transfer its ownership.

2/ I agree that price appreciation implies volatility and volatility prevents is from becoming a "currency without government". Not sure what "BTC Capitalization Volatility" has to do with this, though. Or how he boldly jumps from there to set a zero target price.

1/ I just found about @nntaleb's new (draft) paper on bitcoin. It reveals how easy it is to miss the whole point of bitcoin even if you get to understand some of its most complex features. https://www.docdroid.net/1aMGDoN/bitcoin-currencies-and-bubbles-pdf

Bitcoin consensus is a market consensus, like the consensus on the price of a company. It is not about network participants discussing rule changes until they all agree, but about them acknowledging the subjective value of a certain change for both actual and potential owners.