Replying to Avatar Ethan Tuttle

Talking to my co-worker XMR bro, wicked smart guy. Tell him about fedimint. "Oh, it has modules." "Yea, it's transaction in and out at the core protocol" "So it could do swaps for Monero"

Got me thinking a bit. Plebs want sats. Many plebs want more sats. Monero bros wants more XMR. XMR is 'easier' to mine and can be done on CPU by design (last I understood). Plebs have CPUs more than they have ASICs. Plebs min XMR, bring to a fedimint and swap for ecash. Monero bros come to fedimint and swap sats for eash. Plebs get sats. Monero bros get XMR. Monero gets more TX volume and mining. Arbitrage opportunities abound.

Is this shitcoining? What if it unlocks some pleb level arbitrage with just a Fedmint module to swap XMR for ecash? Is the what it's like working on a permissionless protocol?
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Saberhagen The Nameless 2y ago

The problem with Fedimint is that they it is custodial and mints can print ecash unbacked by Bitcoin without anyone knowing. (Although I believe Calle has a partial solution in the works for rehypothecation, but not fully)

On top of those two things, even honest mint runners that collect fees (the whole incentive model) have a problem with being considered money transmitters and targeteable by government (see recent Tornado Cash ruling)

If those mint runners remain anonymous, that would solve the problem above, but bring a new problem. Since they are anons, and fedimints are custodial, they could easily run off with users Bitcoin with little or no consequence.

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Ethan Tuttle 2y ago

security is all tradeoffs. what convenience feature are you willing to trade for sovereignty of a small stack?

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Saberhagen The Nameless 2y ago

Sure, but the whole ethos, goal, purpose of crypto is to use without permission or custody.

Many small stacks = one large rug incentive

That relatively small stack might mean quite a lot to many people using it around the world. Maybe devastatingly so.

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Ethan Tuttle 2y ago

Security is all trade offs. Where are your keys stored? How do you secure those? Do you trust someone else to safeguard them? Not many people live completely alone or trust no one. Community based trust has and will always exist.

That is the scale of focus for Fedimint. If the small stack means a lot to someone, then it would be recommended they not put that in someone else’s trust.

But coming back to the topic at hand, if someone values a swap into XMR more than that stack, a module that enables swaps makes sense.

Nothing is absolute. You trust someone along the path of using bitcoin. It’s how things scale.

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Saberhagen The Nameless 2y ago

True, but ceteris paribus, fedimints will always have additional layers of trust on top of the the aspects of trust that are already present with Bitcoin/Monero.

Fedimints are faster and more convenient for sure. I'm sure many people will use it because most already value that trade off with other things. I'll mess around with it too.

Yea, I agree about the module things. More options is better.

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Ethan Tuttle 2y ago

I think with the modularity, people will use them for a number of reasons.

There will almost certainly be a market for gambling to run atop fedimint. But now the poker chips ARE actually as good as money, and you always know they return to you eventually, or you keep a cut.

Or gaming companies that can embed ecash as data objects in games for players to find or win and immediately reissue for real money.

All redeemable on chain or over lightning with complete privacy.