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17 sats \ 19 replies \ @Coinsreporter 7 Jun \ on: Ecash mints are just like the Fed's Repo Window bitcoin
Definitely right! I hate ecash and other similar products and they are blooming with one objective that they wanna steal our Bitcoin/Sats anyhow...
I urge everyone not to fall in their trap!!
Great Article and you're 100% right about REPO.
"Adoption" doesn't always choose the best technology.
BetaMax vs VHS anyone?
Businesses in a market place organize around value and trust.
It's why supply chains are reliable and valuable.
Private money (ecash) will be organized and layered atop BTC.
Those who choose to use ecash will value the "utility" and "ease of use" at the fee they are willing to pay (Voluntary exchange).
Is this not Value for Value?
To maximize "utility" businesses may organize - Wallmart eCash at Starbucks, and starbuck ecash at Wallmart.
Network effects of private money.
Trust has risk but Trust also has value.
Being Trusted as a brand is not free and takes time.
Any Bank/mint that "behaves badly" will get wrecked so fast in an open digital marketplace.
Silicon Valley Bank was gutted in 48 hours because of its withdrawal API.
If a mint blocks a withdrawal, the brand damage will be irreparable.
Users don't forgive or forget when they lose money.
Trust accrues to those who behave well.
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While i don't think they have objective to steal, some mints that will appear in the future may have such objective.
Ecash is booming due to a very simple reason that hardcore bitcoiners aggressively deny. It's not "simple" to open a self custodial channel.
Imagine you are presenting your friend to bitcoin. You tell him download mutiny, when prompted tell them to select freedom one as a federation, then tell them to use the receive button and immediately send them 100 sats. Then create an invoice and get them to send you 10 sats. Bam, the new user has experienced sending and receiving bitcoin in 1-2 minutes. Good luck doing the same with a pure lightning wallet.
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If you simply tell a noob to select freedom one as a federation, they will think the bitcoin user experience is the freedom one user experience, and it's not. Freedom one is not bitcoin. When you send sats to them, your intended recipient never receives them, freedom one does. So your intended recipient will think "wow, bitcoin works great!" But they haven't actually used bitcoin. They've used a permissioned database, and didn't give informed consent to let that federation hold their funds.
I greatly prefer telling people the truth: bitcoin is sometimes expensive on a per tx basis; lightning is sometimes expensive to set up; and you have to actively manage it or you will lose money. Federations, on the other hand, are cheap and easy, and some of them give you compatibility with bitcoin and lightning, but with this massive tradeoff: you have to trust them not to censor you or shut down and keep your money, and they probably will sooner or later. They are not magical. They are custodial.
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I explained why ecash solutions are "blooming". You are not really contradicting me.
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And you, my friend, are not really contradicting me. Truly we are all members of a great circle of life. Kumbaya, BallLightning, kumbaya.
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This is very much true. Great point!
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I'm sorry to hear you don't think ecash is useful, but I'm happy you agree with my point. I don't think they are a trap at all.
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While eCash may be useful, it is pretty much guaranteed that they will be abused by debasement in the long-term.
The mint issuing an extra 1% back to itself during every transaction would be nearly impossible to detect, yet it would be very profitable for the mint operator. Thus we must conclude that this will not just happen, but also become the norm.
No one has produced a funding model for mints (other than debasement), so why would anyone run them? The notion of kind old Uncle Jim being a bank for his family is naive. Running a mint will be a full time job and will require lots of effort and lots of responsibility. With nothing to stop him, Uncle Jim will soon start issuing an extra few percentage points to himself....
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Well, in my experience with mutiny when you deposit in the mint, you use a bitcoin address, where you can see exactly the amount sent and you can see in the interface that the received esats are exactly the same amount. How would 1% be undetectable? And if the mint wants to debase, why does it need to create 1% in each transaction. It can create as many as it wants without anyone knowing really.
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Couldn't it debase by issuing tokens to itself for free? You would not be able to tell if the mint did this. They could spend them into the mint ecosystem and no one would be the wiser till enough people tried to trade back their ecash to the mint for sats that the mint couldn't cover it.
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Yes it could. It could also just spend the bitcoins in its possession (people won't see it any different than a normal withdrawal). Mints obviously require you to trust them. They have custody over your bitcoin.
On a side note since deposits and withdrawals are completely anonymous, they cannot selectively stop specific participants from doing these things.
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they cannot selectively stop participants from [depositing and withdrawing]
They can. I outline how in this post: #565618
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If mints remain somewhat small, what would be the disadvantage of debasement? At the end of the day, ecash mints are a trusted model. If there were many many mints, competition might constrain their desire to debase.
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Yes, being small would greatly lessen the impact of debasement.
However, successful projects tend to coalesce into a 2 or 3 main providers. I mean just think about opensource in general: How many SMTP projects are there? At best there may be 3 or 4 major projects, but not dozens/hundreds.
To that end, how will you evaluate the 100 mint providers? When you see a long list of unknown random names...forget about debasement, which ones do you even trust not to rug you completely?
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Thanks for describing my point. I totally agree with you.
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I have a feeling a ratings system could work pretty well. I think this is why we actually want mint operators to charge a fee: if they are earning money for running the mint it is in their interest to keep it going. The faintest whiff of a person not being able to trade their ecash back for sats and everyone will be running for the doors.
In this sense, fees are the antidote to debasement.
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As I said if Ecash is run by a corporate thing, I despise it. But it can be used at for small groups. No objection to it...
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In that case you may want to say that mints are indeed unlicensed money transmitters so they all have a strong incentive to remain small and avoid the notice of the Man.
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I just want that Ecash shouldn't be a thing for stealing Bitcoin.
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