10 sats \ 3 replies \ @0260378aef 29 Jun 2022 \ parent \ on: Privacy on Monero vs Bitcoin with Seth for Privacy — What Bitcoin Did bitcoin
It would be much easier to claim this if both of the well known, serious attempts at implementing cryptographic privacy over transfers in a cryptocurrency (Monero, Zcash), hadn't suffered from inflation-creating bugs, already (only years after both being created). In one case, this (potential) inflation was invisible, which can reasonably be argued to be the worst bug imaginable in a cryptocurrency (even worse than arbitrary spend/stealability .. it's arguable, but you can make that argument!).
If fungibility is binary and Bitcoin isn't fungible, then you are wasting your time with Monero, since it does not eliminate the transaction graph, it only obfuscates it, and does so with non-trivial tradeoffs. If a binary 1 for fungibility is what matters, you shouldn't look at anything with a lower privacy bar than Zcash in this case (and even that doesn't quite get there, though it's extremely close ... again with unacceptable tradeoffs imo).
In my opinion the accumulation of state over time, extra expense of space/computation, and by far the most important - the danger expressed in my first paragraph above, is why we never got any energy behind creating some form of blinding or obfuscation of amounts and tx graph in base layer bitcoin. Even the experts who proposed it admitted there is a tradeoff, in implementation risk, cryptographic risk, and scalability. That's why higher layers are going to be the more effective way, long term. I do not support Monero or Zcash or other similar projects, because an endless fracture of Bitcoin into other coins to fix limitations just leads to a failure of the cryptocurrency project overall.
With a little bit more cohesive effort we can get much better effects at higher layers.
I spent a good bit of time in the podcast walking through these tradeoffs, I am both aware and honest about them.
But the advantage of gaining strong privacy for every user of a tool far outweighs the minor risk of implementation bugs leading to inflation (a risk that Bitcoin also has, it's just always detectable there). You can read more of my thoughts on auditability here: https://sethforprivacy.com/posts/dispelling-monero-fud/#you-cant-audit-the-monero-supply
As for fungibility, what matters is fungibility in practice -- in practice Monero's holistic approach to privacy has provided perfect fungibility to date with no signs of that changing. People confuse ring signatures as the only aspect of privacy on Monero, which they are absolutely not (as, again, I walked through in-depth in the podcast episode). Yes, Zcash has a slight edge to potential privacy, but far worse real-world privacy due to allowing transparent transaction (and thus 95%+ of transactions being non-private).
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A global reserve currency isn't a discrete payment network. It's money economies hedge with, money governments use, money businesses use, money everything is settled in. It's not just for the pleb buying lunch. A global reserve currency that is DECENTRALIZED won't work without a transparent L1. If transparency of the financial system's base layer (fiat/debt) existed today, governments would have the minority data. They'd be screwed and couldn't survive the free market dynamic that creates. Their manipulation that targets stable fiat pricing wouldn't work.
You're standing way too close to the protocol and code like most devs do.
For example, when I ask most devs by what mechanism their protocol creates an overabundance of goods and services outside the money, they don't know what that means, because they've never considered the fact that if money is separated from state, then there's no government left to incentivize energy production, to subsidize it, and enable an overabundance of it. You can't have an overabundance of goods and services outside the money without an overabundance of energy. And since energy and energy efficiency are how we can directly measure the prosperity of a nation...My point is, without this, deflation is an absolute nightmare. So, like the first question I ask any aspiring politician: what's your energy policy? If you haven't got one on a massive industrial scale, your money and payment network will never be anything more than a discrete payment network, which is fine. Chucky 🍕Cheese has one of these with their tokens. I can buy pizza with them. This isn't a world reserve currency though. Only bitcoin possesses this property, which is what attracted me to it.
Lastly, what's Monero's plan to scale the velocity of money to the velocity of information the internet achieved?
Privacy doesn't fix the money or world. We already have plenty of privacy with paper money.
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By the way, found your podcast with Peter excellent and quite informative. Some good points, regardless of our disagreement here.
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