10 sats \ 2 replies \ @orthzar 23 Aug 2023 \ parent \ on: Is Monero's privacy better than BTC's? bitcoin
To add to this, Monero has had to do many hard-forks over the years to change things, most importantly to squash several inflation bugs -- the most recent IIRC was a few years ago. The last time Bitcoin had to hard-fork was 2011, which was also to squash an inflation bug.
There is a very real possibility that future inflation bugs will be discovered in Monero, simply because it's consensus code is very complex. This is a serious problem, because someone (whether Monero devs or anyone else) could find and exploit such an inflation bug.
For all we know, one or more of the Monero devs could have exploited or could be currently exploiting an inflation bug prior to reporting it. The XMR from such a bug would be sent to a fresh address, so it would be impossible for anyone to prove who would be exploiting such an inflation bug. The exploiter would report the bug after selling some or all of that inflated XMR.
This is a serious counterparty risk for Monero. The counterpary is anyone who has the skills to find and quietly exploit an inflation bug in Monero's consensus code. The most likely people who could do that are Monero devs. I am not saying that Monero devs have exploited inflation bugs -- I'm only saying that it's possible and plausibly undetectable. Moreover, there are other people who could exploit an inflation bug in Monero, if they understand zero-knowledge proofs.
Related: FluffyPony urges people to not hold Monero, but only to use it for buying/selling things. I do not suspect he knows of an inflation bug being exploited; he seems to simply be trying to keep people from somehow losing all their wealth.
I should say that there is a possibility that the privacy ideas in Monero could be applied to a second layer atop Bitcoin. Such a project would not have any inflation bugs (because Bitcoin handles final settlement), while giving some of the privacy benefits of Monero to Bitcoin users. But such a project will never begin unless Monero devs can be convinced to jump ship to Bitcoin. Their expertise would be critical for such a project.
There is a very real possibility that future inflation bugs will be discovered in Monero, simply because it's consensus code is very complex. This is a serious problem, because someone (whether Monero devs or anyone else) could find and exploit such an inflation bug.
Not unique to Monero.
Apparently you have never heard of the 2018 Bitcoin bug. A single anon discovered a bug several years old that would've allowed them to inflate the supply without being discovered. Luckily, they were an honest actor and reported it in secret to devs. The devs could have also taken advantage of this in secret. If this anon had exploited this bug, and used fake bitcoin to buy real goods and services, there is no good remedy. You either:
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Hardfork out the fake Bitcoin - screwing over all merchants and users who received this fake bitcoin and gave away real goods and services.
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Or leave it - destroying 21 million meme.
Both are pretty catastrophic for user confidence. Remember, this can always happen again. Avoided by the good samaritan will of a single anon and dumb luck. Attackers have the advantage. Transparent simple auditability doesn't help after the fact.
I should say that there is a possibility that the privacy ideas in Monero could be applied to a second layer atop Bitcoin. Such a project would not have any inflation bugs (because Bitcoin handles final settlement), while giving some of the privacy benefits of Monero to Bitcoin users. But such a project will never begin unless Monero devs can be convinced to jump ship to Bitcoin. Their expertise would be critical for such a project.
You can't have your cake and eat it too, unfortunately.
Major value props of Bitcoin like self-custody, permissionlessness, p2p, or final settlement are sacrificed to gain Monero's level of privacy on L2. Liquid and lightning give up at least one of these and is still inferior privacy vs Monero.
The only thing on par with Monero's privacy right now would probably be Ecash, but you give up self-custody. The mints can also arbitrarily print tokens that are unbacked by Bitcoin.
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