Quote from: PenguinsDancing on July 19, 2015, 01:23:30 PM

Quote from: toknormal on July 19, 2015, 11:48:17 AM

Obscurity - A Bookkeeping Concept
In the case of cryptocurrency, there is no intermediate counterparty holding records on your behalf. (If there was, a system like cryptonote might still be of some use). Cryptocurrency therefore re-orders the priorities of monetary transparency and record keeping privacy such that latter becomes the domain of the holder and not the monetary media itself. This is what allows bitcoin to be defined as base money as opposed to a mere record keeping system.

I'm not sure I understood the point here and I think that is making it more difficult to get the rest of your discussion. Can you elaborate a bit?

It's to do with how you define "base money" as opposed to derivatives of base money. If you are a plumber and offer to do work for me in exchange for my bike, the "bike" forms the base money for the transaction. If then later I give you an IOU for the bike because you wanted to collect it later, the IOU becomes the money instead, but it is not the "base money" - the bike is. It lies at the end of a chain of trust which now comprises paper IOU as well as the bike.

We consider a fiat bank account to be "money" since it can be exchanged for goods. But it is actually just a number in an account which is backed by base money - (ultimately 'debt' which in turn represents some other person's future contribution to the economy). Gold shares that are traded on the stock exchange are not "base money", they are secondary derivatives (like the IOU). The gold is sitting in the vault and doesn't physically change hands but represents the "base money" for the transaction.

When is comes to "privacy" in the traditional world it is a distinct concept from "fungibility". Privacy manifests itself in the accounting for base money (in this respect, I equate a fiat bank account to a bookeeping function which tracks it's holders call on a common pool of debt - the debt which acts as the 'base money' for the economy).

Cryptocurrency portends to re-invent the concept of 'base money'. It is a base monetary medium that is not backed by anything. It is anonymous (because unlike a fiat bank account, it is not directly associated with an individual / legal entity). The way the Satoshi model is designed uses a type of public / private key approach to allow individuals to hold and transfer cryptocurrency without loss of anonymity and - more importantly as far as the 'integrity of base money' argument goes - without impacting on its transparency.

If you're going to design a new form of base money, you would do well to start with the properties of money and implement these as faithfully as possible. There is a broad level of agreement on what they are:

http://contrarianinvestorsjournal.com/?p=391#
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=money+characteristics
http://blog.milesfranklin.com/the-seven-characteristics-of-money
https://en.wikipedia.org/wiki/Money

Note that "privacy" (as in "obscurity") features nowhere amongst them. Even the word privacy barely appears. If you're designing new money therefore, you need to decide if you're building the wallet or the contents. Cruptonote has done the former at the expense of the latter and that's why Dash isn't pursuing this route. Instead it has faithfully supported the public blockchain while at the same time addressing fungibility improvements directly.

Contrary to what Monero proponents like to promote, bitcoin IS a fully anonymous currency. Any information about who happened to be on the other end of a transaction has to be gleaned from OUTSIDE the blockchain. In this sense, it's exactly the same as paper cash - if you hand me a 100 dollar note, I can clearly associate that 100 dollar note with you. The amount of information you can glean about the people controlling the movements is mitigated by maximising the fungibility of the base-monetary media (which, as I've explained, is exactly what Dash is doing).

On the other hand, obfuscation of the blockchain is attaching a priority to the base monetary media that does not belong there - and particularly not in a new digital medium that portends to function as base money.

That type of obfuscation alludes to two incorrect appraisals of what cryptocurrency is:

[1] - a form of money where an address corresponds to a person as a bank account does (it doesn't any more than a lump of gold does)

[2] - a record keeping system backed by some other 'base money'

The 'public blockchain' is therefore an essential element of anthing that portends to act as 'base money' as opposed to a record keeping system which is backed by such.

I described this more fully in this post from earlier this year.