Quote from: rpietila on July 26, 2014, 08:16:21 AM

Quote from: AnonyMint on July 26, 2014, 08:00:43 AM

I already said one-time ring signatures are an improvement, except they come at the cost of defeating the mini-block chain, which is the only way I can see to scale to micro transactions and remain decentralized (assuming you want new mining nodes to be able to pop up, download the block chain, and leave the network at-will to guard against IP blocking by the authorities, etc...).

I would urge you to think of the idea of intentionally living with a rigid or punitively expensive cap of daily transactions.

The transaction cost for physical gold bullion transactions is always 1% or more of the value, typically 2% (not counting all the externalities such as your time).

I am in favor of drastically increasing the price of something that is rare and valuable, and would not even notice paying 1 XMR fees.

High transaction fees for trading and in particular for taking delivery of gold are in fact the major weakness of gold as a form of money and led to the development fractional reserve banking and fiat currencies. The net result of these costs is that gold is worth less not more since it becomes easier to short gold and more importantly maintain the shorts. This is critical to understanding the source of the Rothschilds' wealth. The premise is that owners of gold would deposit their gold with Rothschild and use their promissory notes for gold instead of gold as money in order to avoid the the above mentioned fees and costs. Rothschild would then issue promissory notes for gold in excess of the gold on deposit and profit from the interest rate spread on the notes that were created "out of thin air". This worked because only 10% of the depositors withdrew their gold because of the fees, troubles and costs of taking delivery. Now what happens if these fees and costs were suddenly removed, people would redeem their notes and withdraw their gold from the bank, since there is now no advantage to holding the promissory note for gold rather than the gold itself. This causes the bank to collapse in a massive short squeeze, since there are more notes than gold, and the price of gold to rise sharply.

How does this apply to BTC and XMR? Well with BTC we saw pirateat40 build a massive short position in BTC in late 2011 and early 2012. This had the effect of depressing the price of BTC in 2012 allowing those of us who were buying BTC at the time to benefit from depressed prices. When the short position blew up in August 2012 it set the stage for the sharp rise in 2013. The key advantage of BTC over gold is that with BTC it is trivial in cost and time to take delivery and thereby squeeze the shorts to the wall. Mark Karpelès of MTGox was also likely taught this same lesson. In fact I would not be surprised if there is another sharp rise in the BTC price in the aftermath of this latest short squeeze. So trying to "pull a Rothschild" with BTC is doomed to failure, at least for the time being. This brings me to my next point. The 1MB blocksize limit in BTC. If this is not addressed. this will cause transaction fees to rise sharply, fractional reserve banking to become viable as with gold, and prices to fall. It is for this reason and not privacy that I have purchased a substantial position in XMR as a hedge on my BTC position. XMR does not have this problem, in fact some would argue it has gone somewhat too far in the opposite direction.

The bottom line is that for XMR we need to keep fees at a minimum to cover actual costs, in order to maximize the value of the currency not the other way around.