I don’t disagree. Bitcoin that isn’t cash has no purpose though. It’s why I left that space, despite having made some pretty fundamental contributions.

« The “electronic cash” envisioned by Satoshi is cash; it is not notes, scrip or bank credits. We have come to think of bank notes as cash, but they are actually contracts for debt. The note holder is owed something by the issuer. Cash is a commodity with certain properties that make it useful as money. Cash is largely gone from the world, and people cannot return to physical commodity money, as it cannot be moved online. Bitcoin is really our only option to guard against inflation, counterfeit, capital controls and high costs in general. Some might take issue with this vision, but that's because they imagine existing banks, financial institutions, and – most importantly – censorship. A global censorship-resistant settlement network is not like anything we've ever seen before. It is, indeed, the goal many people are working towards.

That system will allow people to buy their coffee with electronic cash, but Bitcoin will never carry every coffee purchase on-chain. Those who make the Visa-analogy either don’t understand how Visa works, or don’t understand how Bitcoin works.»

Modern day paper currency are not debt instruments. They are very much cash.

Whether bitcoin is used for direct payments or payment channel settlements is irrelevant. What is important is self-custody. Cash works and has the properties it does because it is a (mostly) fungible bearer bond. Bitcoin is also a (mostly) fungible bearer bond regardless of whether you transact on chain or through lightning.

They are debt instruments. Liabilities of the central bank that issued them.

Cash was the gold that you used to be able to redeem said liabilities for. These days, you can simply transfer the bank's liability to you to someone else, as a way to offset your own liability.

Just because the bank has no intention of ever paying cash at this point ever since Nixon left behind specie payments doesn't change the fact that these notes are still issued as liabilities.

And when I say issued by the central bank, I do mean only the paper bills that are issued. Most money that exists in bank accounts is issued by the various commercial banks that operate within the banking system (when they issue you a loan, they don't go out and find other money; they simply credit your account with the amount of the loan, and that money was simply loaned into existence as a liability of that bank).

By going off the gold standard paper currency is no longer a debt instrument.

There is intrinsically no difference between deciding gold is the scarce thing that we all accept as money, or some specific hard to duplicate paper money. They both serve th same purpose.

I like the tech. I even paid for my coffee with the Lightning network in El Salvador and went to BTC Miami. The things I'm still not sure about are:

1. When will the value become relatively stable? This flies in the face of the store of value argument.

2. How is Monero-like fungibility going to be added? Good cash needs to be fungible.

As to '2' I don't think that can be done without losing some other desirable properties.

You can significantly improve privacy without harming scalability (in fact improving scalability at the same time) [1]. Admittedly you still lose full supply auditability [2].

[1] https://forum.grin.mw/t/scalability-vs-privacy-chart

[2] https://phyro.github.io/grinvestigation/why_grin.html

You know that’s not true, tromp. All CT approaches incur an intrinsic 10-30x validation cost and similar (though decreasing) witness cost.

It's true in terms of historical chainsize growth rate as I use it in [1].

Are you assuming MW aggregation, and that’s how you’re amortizing CT cost?

No, I'm just using the fact that in a Mimmblewimble blockchain, the initial block download doesn't include any data about spent outputs. Neither the outputs themselves nor their rangeproofs. That's the beauty of MW.

You could call that historical aggregation, but normally when people talk about aggregation (as I assume you do) it refers to aggregating transactions before they're included in a block.

In other CT blockchains, that data stays around forever, hurting scalability.

Initial block download isn’t the bottleneck for scalability though. You can quite safely import a year-old utxo set, especially if there are utxo set commitments or if you already have access to a running node somewhere.

In my experience when people talk about on-chain scalability, they mean transactions per second of real-time validation. Maybe I’m wrong but I don’t think anyone in this thread was talking about IBD / validation of historical data.

> Initial block download isn’t the bottleneck for scalability though.

It is for full nodes (fully verifying nodes). They don't trust the UTXO set to be correct just because miners keep building on it.

Huge chain size is exactly the reason why there are so few Ethereum full nodes, which makes it less decentralized.

But even right now in bitcoin you can initialize a node with -assumeutxo to avoid IBD costs. You either get the UTXO set from a node you already control (and its turtles all the way down), or if bitcoin supported UTXO set commitments you simply pick a committed UTXO set from N blocks back, for some sufficiently large N. All block headers are downloaded, but full blocks back to the Nth block commitment are validated.

While technically SPV, this ends up being exactly the same security model overall, since an attacker that can invent (say) a full year's worth of alternate history to fool you can already perform arbitrary double-spends on main net. In addition, although this is not required, for most of bitcoin's history the last year or two of mining represents almost all of the proof of work anyway, so someone who serve you a more-work forked off false chain with a false UTXO set commitment could have also rewritten the block chain since genesis.

Bitcoin's security model already assumes this is not possible. So with UTXO set commitments (which bitcoin will eventually get in some form), you only need to IBD a few months worth of blocks, or maybe a year or so if you are truly paranoid.

Monero-like fungibility will never be added to bitcoin. The core devs are specifically against it.

> Bitcoin is really our only option to guard against inflation, counterfeit, capital controls and high costs in general.

Cash (and Bitcoin) are just as vulnerable to inflation as traditional currencies. If oil is more scarce, the cost of all oil-based goods will increase, regardless of whether you can mint more BTC or not. Not that it would be any serious difficulty to increase the supply of BTC either - it's ultimately just a number in some program.

Counterfeiting is fixed by all digital payment systems protect against it. Visa cards are just as secure from counterfeiting as BTC wallets.

Capital controls are much more easily enforced when you have a public ledger.

High costs are inherent to BTC, at least as the community exists today. And the network itself is completely impossible to scale to anything like a full payments system, as you yourself admit.

Also, censorship is easy to implement on top of BTC: just require miners to be licensed, require licensed miners not to validate transactions from certain wallets, and to ignore blocks proposed by non-licensed miners. Since mining is an extremely centralized and high-capex + high-opex operation, it's easy for a a powerful government to shut down any significant miners who aren't licensed. So, if BTC payments ever become a significant way of circumventing sanctions and censorship, the ban hammer will come down swiftly. Of course, so far BTC is both too low in scale for major governments to care, and too convenient as a honeypot to find sanctions breakers.

Bitcoin is immune to hyperinflation. Can you refute that?

You are talking about monetary inflation. He is talking about price inflation. Totally different.