Quote from: iamnotback on November 27, 2016, 12:53:43 AM

Quote from: ArticMine on November 26, 2016, 05:16:16 AM

Quote from: iamnotback on November 25, 2016, 11:57:20 PM

...

ArticMine here you are again posting your inkblots. Slow down and try to understand your mistakes. Go take some quiet time and think for a while before you respond, so you don't fill up thread with useless noise.

I am saying that is as the "transaction-related costs" approach the minted block reward, then the Tragedy of the Commons in transaction fees results. This has nothing to do with a fixed per KB transaction fee, but rather the costs of actually processing the transactions. You have to factor in that costs include the fact in proof-of-work mining, that a 0.1% hashrate miner must propagate and validate 100% of the systemic transaction volume (yet he is only paid 0.1% portion of the total systemic rewards, and probably even paid less because of selfish mining and asymmetric propagation costs due to mining on the wrong chain part of time).

And any way, the entire discussion is irrelevant, because regardless, the economies-of-scale in proof-of-work dictate that it is a winner-take-all power vacuum. So you are just wasting your time any way arguing about the transaction fee aspect.

The inevitable mining cartel (presuming Monero becomes economically relevant) will dictate transaction fees in Monero as well, and also control the mining and all the bad impacts (censorship, deanonymization, etc) that come with it.

Sorry. Better luck next time.

Again a false assumption bold since there is no explanation how this is supposed to happen in the presence of a fixed tail emission. This assumption is up against:
1) The Equation of Exchange in economics. https://en.wikipedia.org/wiki/Equation_of_exchange MV = PQ. What is being assumed here is to increase Q without a corresponding decrease in P. Or to put it in simpler terms one cannot expect a 100x increase in the number of transactions (Q) in Monero without a corresponding increase in 1/P (purchasing power) of the tail emission in Monero.
2) The fall in real terms of the unit cost of the "transaction related costs". The best example of the latter is the credit card industry. The transaction throughput of the VISA network today would not be possible with the technology of 1949 (punched cards, tabulating machines telegraph lines etc. ) This is relevant because the business model that was conceived in 1949 for Diner's Club, retail payments of high margin luxury goods and services (Tiffany & Co.). fails today when it is applied to very low margin retail purchases of commodity items (Walmart). We do not see American Express at war with Tiffany & Co but we sure see VISA ar war with Walmart. I wonder why.

Edit 1: The only other variable in the equation of exchange that can change is V (The velocity) and changing V would require a change in use of the coin. M is set by the protocol and cannot be changed. One time changes in V and the slight increase in M due to inflation are more than compensated by the drop in real terms of the unit cost of the "transaction related costs".

Edit 2: One cannot simply extrapolate what are valid assumptions in Bitcoin to Monero without running into some very serious problems.

I expect V to be on the order of 10 - 100 for a microtransaction coin for use on all the activities we do on the Internet. So a minted block reward in the realm of ~1% would require transaction-related costs that are less than 0.01 - 0.1%. Yet microtransaction values may be so small that actual costs may be higher than that. Most damning is my additional point which you did not respond to:

Quote from: iamnotback on November 25, 2016, 11:57:20 PM

You have to factor in that costs include the fact in proof-of-work mining, that a 0.1% hashrate miner must propagate and validate 100% of the systemic transaction volume (yet he is only paid 0.1% portion of the total systemic rewards, and probably even paid less because of selfish mining and asymmetric propagation costs due to mining on the wrong chain part of time).

So for the control over mining to remain decentralized and for their to be a viable fee market, this means the 0.1% hashrate miner has to have transaction-related costs in the realm of 0.0001 - 0.001% of the tiny microtransaction values of transactions. You may argue that Monero will be a coin for high valued transactions and you don't think microtransactions are important, and I will rebut by arguing that it will not survive then as a system of money:

https://bitcointalk.org/index.php?topic=1319681.msg16969596#msg16969596
https://bitcointalk.org/index.php?topic=1693466.msg16993233#msg16993233
https://bitcointalk.org/index.php?topic=1685115.msg16993524#msg16993524

Also although costs will decline over the decades, transaction volumes can also increase at that rate or faster than Moore's law.

And lastly, as I said arguing about your tail reward is pointless, because it can't stop the economies-of-scale which cause proof-of-work (in Monero, Bitcoin, etc) to be a power vacuum which is a winner-take-all economic system. You didn't even address this point:

Quote from: iamnotback on November 25, 2016, 11:57:20 PM

And any way, the entire discussion is irrelevant, because regardless, the economies-of-scale in proof-of-work dictate that it is a winner-take-all power vacuum. So you are just wasting your time any way arguing about the transaction fee aspect.

The inevitable mining cartel (presuming Monero becomes economically relevant) will dictate transaction fees in Monero as well, and also control the mining and all the bad impacts (censorship, deanonymization, etc) that come with it.

Sorry. Better luck next time.

Edit: apologies about the gloating. I am just letting out some pent up frustration about the way I felt about the way (some or most of the) Monero folk were so sure they were superior to everyone else. That had really alienated me and I admit it one of driving motivations I have. I understand the importance of building a community, but not a community that thinks that no other experimentation from outside can be valuable. Any way talk is cheap. So unless someone demonstrates a better way, then it is useless for me speculate verbally about what sort of community I would like to be a part of.

IANAL

This "refutation" is based upon the concept that if a virtual currency focuses on something other than micro-transactions it will be shut down by the the "state". Furthermore the state that is most likely to do this would be the United States. There is no doubt that when it comes to financial regulation the United States is the most critical jurisdiction largely because the United States dollar is still the de-facto world reserve currency.

The regulatory status of virtual currencies in the United States has been very clear since March 2013 after the release of the guidance by FinCEN https://www.fincen.gov/sites/default/files/shared/FIN-2013-G001.pdf. There are two critical questions here:

1) Does the virtual currency qualify as a "De-Centralized Virtual Currency" under the guidance?

2) Have the developers / creators etc., of the virtual currency engaged in money transmission?

These questions are addressed in the guidance.

Quote

A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may obtain by their own computing or manufacturing effort.

My personal comfort level with Monero is based on the following:

1) Proof of work crypto-currencies can meet this requirement provided there is no pre mine, post mine, diversion of block rewards to fund development, marketing, repayment of angel investors, etc.

2) A requirement for the creators, developers etc., to not be classified as money transmitters is that they "keep their hands out of the till" by not diverting any portion of the block reward towards a pre mine, post mine, development, marketing, repayment of angel investors, etc.

Meeting the above requirements means that the only option for funding the development of the virtual currency is donations in kind, monetary or both in a classic Free Libre Open Source Software model with no mandatory repayments of "intellectual property". This eliminates traditional market based proprietary software models, and make funding via the capital markets effectively impossible.

The reality is that with very few exceptions the vast majority of alt-coins fail the above test, largely because the initial jump-start of a FLOSS project is extremely difficult and at the same time the promised riches of the emission to compensate for the "intellectual property" are just too much of a temptation for most people. The net result of this is that most alt-coins are literally sitting ducks waiting for regulatory enforcement by FinCEN in the United States. There is also a large amount of denial in the crypto currency community over this as exemplified by comments such as "You didn't even address this point". Seriously just perform a search for "FIN-2013-G001" on BCT to see how many times I have posted a link to the above guidance.

I will leave with the following quote from Jennifer Shasky Calvery, Director of FinCEN https://www.fincen.gov/sites/default/files/2016-08/20130613.pdf

Quote

Those offering virtual currencies must comply with these regulatory requirements, and if they do so, they have nothing to fear from Treasury

This is the reason I sleep soundly at night. I will leave it for the reader to consider what would happen to those who deliberately choose to ignore these regulatory requirements.

Edit: Monero is not even suitable for micro transactions by design, with minimum transaction fees likely to remain around or above 0.01 USD over time in real terms. This is not to say that micro transactions are not a viable market in its own right, but rather than there are likely much better suited solutions for this market. The opportunity for Monero in the micro transactions market may actually be in the on and possible off ramps for these solutions. So for a virtual currency focused on micro transactions Monero is not even a competitor.