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30 sats \ 8 replies \ @freetx 7 Jun \ parent \ on: Ecash mints are just like the Fed's Repo Window bitcoin
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....
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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