I think the most interesting part is that it forces alt-coin developers to have a good answer to: "Why do you need a new completely independent new unit?" Altcoins are 4% of the market. Why are people so obsessed with them? My guess: gambling in case an alt ever takes off. If it's a little bit you don't lose much but if it goes crazy you could make money. I think a lot of money in alts is not for actual use but hoarding in case it becomes popular. They want to be first like the people who were first for bitcoin. I think he was asking why sidechains as a replacement for alts (or really anything about alts at all) is so compelling. I don't think it is. Fiat is 99+% of the market. Look that direction, and stop being distracted by the 4% in the other direction. how is an anonymous (monero-type) sidechain backed by BTC not interesting? This was asked and answered before (credits to smooth). In the wake of http://www.blockstream.com/ essentially making sidechains an inevitability - what is the point of holding XMR now? Wont all of the privacy Monero offers be available within the bitcoin blockchain? I think the answer is no. First of all it is questionable whether you would really want to hold wealth long term on a sidechain. The security assumptions (even when it comes to things like network hash rate, but in other more fundamental respects as well) are questionable. It is more plausible you might want to use services or features on a side chain by moving your bitcoins there and then, relatively quickly, moving them back to the more secure main chain. For example, this might be be used for mixing, by moving your coins to a sidechain with ring signatures, transacting and then moving them back. But this ends up being a lot like using a Bitcoin mixer, with many of the same issues such as simultaneity. For example, imagine you are making a donation to some controversial organization and you want to delink the bitcoins you are donating. So you go ahead and move your coins to a ring-sig sidechain, move them around a few times, and then move them back. Unless other people are doing this at the same time, when you move your coins back to the main chain, you will get the same coins back that you started with. Alternately, perhaps the organization wants to be all anonymous and stuff, so it publishes an address on the sidechain, and you donate to them there. They then withdraw the coins back to the main chain, and they get the exact Bitcoins you sent to the side chain. Obviously if there are a few other people doing the transfers at the same time, there is a degree of mixing, but it is fairly limited. I don't think a side chain with a specialized purpose can achieve the same degree of anonymity as a coin designed for that purpose, where the entire chain is being mixed and remixed continually. That is an emperical question though. It is possible that a Bitcoin side chain could get more usage and greater trust of its security for long term holdings than Monero will have. More usage would address the mixing issue to a some extent and trust in the security would address the need to constantly move coins back and forth (though there still may be a loss of network effect here). None of this is clear at all. I also think it is possible the market may simply reject the notion of adopting the Bitcoin currency for everything. It will be an interesting experiment to decouple new features from using a different currency. We may well find that the reason for altcoins is not the features! Yeah I didnt take the time to respond out of the respect for the developers of Monero, but this is a pretty flimsy answer. Unless other people are doing this at the same time, when you move your coins back to the main chain, you will get the same coins back that you started with. -- this assumes a very low volume on the sidechain. It also assumes that they will keep the block processing length short enough for something like this to occur. This is not smart and therefore will not happen, especially immediately after release. They can short the block times down once enough volume has been achieved. I also think it is possible the market may simply reject the notion of adopting the Bitcoin currency for everything. -- The entire history of network effects says otherwise. This is totally baseless logic. We may well find that the reason for altcoins is not the features! -- This is equivalent to saying there is no reason to use Monero in the first place. Everyone there was there because they believed in a pure anonymous coin and the market it served. However now with that possibility achieved via sidechains, there remains no reason to be in Monero any longer (imo). |
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As scarcity increases, so does the price.... Mtgox was an exchange... that has nothing to do with a protocol and its security. You should rethink a bit of what you just said here.
I agree scarcity drives price when demand exists. It is why I speculatively hold bitcoin right now. What will drive the demand for bitcoin if everyone moves to a bitcoin 2.0 chain? We arent talking about 2.0 chains (like ethereum) we are talking about sidechains. They exist on the bitcoin blockchain. |
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I don't doubt that side chains offer some exciting possibilities. But I am still not sure this is the right thing for bitcoin. Perhaps this if implemented into bitcoin core it will herald the end of the alt's in the future and a proliferation of side chains offering discrete services, all fully or partially backed by bitcoin.
I am not against the idea overall. But these new chains are really just alt coins initially backed to some degree by bitcoin. Perhaps that is the leverage the bitcoin 2.0 coins need to succeed in correcting some of the (perceived or real) deficiencies in bitcoin right now. Perhaps we need a static reliable bitcoin blockchain to act as a store of value, in essence like a digital gold reservoir which backs future alt digital currencies. However I suspect this is likely to be wishful thinking. I say alt currencies because these alt chains will not run on the bitcoin chain or protocol, but will simply be linked to it by this 'two way peg' system. If the last five years has shown anything, it is that 'there can be only one' is true really with bitcoin market cap being gigantic and all the rest of the alts being a tiny afterthought.
With each alt side chain presumably there will be an IPO type event where a portion of btc coins go into a black hole of being 'locked'. This will dwindle available supply of btc and instead of being sold off on exchange (ethereum) and depressing the price could actually support it. If lots of popular side chains exist the actual use of bitcoin could become reduced or even minimal. What will keep bitcoin from losing it's value? Nothing I suspect.
What happens if one of these side chain alts becomes very successful (for example is supported by the banking system) and begins to draw a large number of bitcoins in circulation into lockdown. Will bitcoin value suddenly evaporate as all the coins sublime into the new chain in a mad rush? One can imagine some amazing pump and dump opportunities for clever side chain developers to acquire an awful lot of bitcoins through this 'two way peg' mechanism. (Early adopters again wahey!) Or to actually kill bitcoin with if a superior chain emerges.
What happens when a side chain is insecure and is 51%'d if decentralised or is simply hacked if centralised. It isn't hard to imagine a massive gox style disaster with hundreds of thousands of coins getting stolen or lost?
Interesting times.
As scarcity increases, so does the price.... Mtgox was an exchange... that has nothing to do with a protocol and its security. You should rethink a bit of what you just said here. |
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Why is this a problem if the code is all open source?
actually, this is very true. for all my ranting, in the end, i think they fail spectacularly. i could be wrong. but given Bitcoin's future price projections due to its fixed supply and liquidity as a new form of money, why on earth would anyone move BTC to a high risk, low security Sidechain? Besides true anonymity or stupidity, we dont know because we arent psychic. But the point is that this development addresses future unknowns in a really amazing way. |
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not sure where you're going with this.
if the faster tx is made more useful for certain type of transactions, people will be transferring an according amount of BTC they want to use for this purpose from their hot wallet.
if related SC offers faster tx without compromising security why then would the feature not be integrated to BTC core?
your first question seem contradictory with the second. assuming the value proposition of Bitcoin is fine as is right now, why then would "people from all over the world" want to transfer all the BTC from their cold wallet to a faster TX SC.
I generally appreciate your contribution to BTC related matter but I can't shake off this strange feeling of dishonesty that I get from reading some of your comments since yesterday. It seems as if you're trying too hard to attach ill intentions to a group of people that have generally served us well in the past.
you're missing the overall pt. it doesn't matter what the feature is that gives the SC an advantage. first off, the advantage could be gained b/c the Blockstream core devs have preferentially worked on that feature for the SC as opposed to the main chain. then if that SC takes off, as JR said, they might block that feature from being incorporated into the main chain. the problem is that there are too many of them working under the same roof. the scenario where that might happen is if that SC has its own altcoin that they've invested in that's riding along with the transferred BTC. anything i say has bias as i'm invested in Bitcoin just like most everyone else around here. the difference being, that i'm not the one recommending changes. i invested under one set of assumptions and imo, this changes things potentially. Why is this a problem if the code is all open source? So long as the community can vet a change far before it becomes adopted into core, I see no issue with this. It would take an evil genius on steroids to pull off a trojan horse in this community of tin foil paranoid freaks (I say that in the most lovingly way possible!). |
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- private sidechains
- sidechain what lives only 1 working day(any duation) - no need to store full transaction history because bitcoins are transfered back to main chain
So essentially, they want to move towards using the bitcoin blockchain as a timestamping service? You publish block header hashes and bitcoin timestamps them. If a court ever needs the records, they can prove that they are unaltered. Thats just one of potentially thousands of use cases, yes. |
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Is that dear NotPorkChops? I don't know what to believe any more...  Oh, the burn... lol |
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http://www.reddit.com/r/IAmA/comments/2k3u97/we_are_bitcoin_sidechain_paper_authors_adam_back/clhoo7dWe think there is a tremendous business potential in building and supporting infrastructure in this space, some connected to Bitcoin and some not. E.g. by acting as a technology and services provider for other businesses in helping them migrate to a more Bitcoin-like way of doing business.I got chills reading this. I have been thinking about this idea for awhile but didn't have a clear idea for how to implement. I am so excited to see such a solid team working on this.
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Cypher, I respect your opinion but am at a loss on this one with where you are. The sidechains, while this will surely be a major change to bitcoin is absolutely necessary to ensure the role of bitcoin as the leader in the space. It also ensures that the fixed supply we seek with an e-currency is actually a possibility. At the moment, "cheap" alts are taking a decent amount of funding that would otherwise be going into bitcoin. What exactly is the issue if some of the bitcoins are lost? Better in that situation than an alt coin simply evaporates. In both situations wealth evaporates, but only in sidechain scenario does wealth increase (of bitcoin holders) irregardless of an evaporation. In regards to coding with a profit model, I think Greg said it best: http://www.reddit.com/r/Bitcoin/comments/2k070h/enabling_blockchain_innovations_with_pegged/clh5wbv |
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The technology can't be effectively separated from the economic and business considerations any more than a coherent analysis of Bitcoin occur without consideration of its economics. The are inseparable. His position is unsound. Yes, I agree. This is a bullshit answer. |
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1. You ignored this part: "both technology-wise and economic/ecosystem-wise." That could include all manner of things that have little to nothing to do with existing code, including mining centralization, bad decisions by core developers, bad influences by existing or new commercial interests, too cozy with regulators, too hostile to regulators, being the target of a deliberate attack simply because it is bigger, etc.
Originally I wrote a much longer response but my browser froze and I got lazy re-writing it. Anyway, I still fail to see why litecoin, Monero or any other coin would be considered a hedge in the event of an issue with bitcoin. If anything a failure in bitcoin would be catastrophic for cryptocurrencies in general and would set the community back years before something else might catch on. The confidence would simply be gone. I have a hard time believing that people spent so much money investing in Litecoin because there might be a failure with bitcoin at some point down the road. That being said, maybe I need to just have less faith in humanity.  |
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In the wake of http://www.blockstream.com/ essentially making sidechains an inevitability - what is the point of holding XMR now? Wont all of the privacy Monero offers be available within the bitcoin blockchain? I think the answer is no. First of all it is questionable whether you would really want to hold wealth long term on a sidechain. The security assumptions (even when it comes to things like network hash rate, but in other more fundamental respects as well) are questionable. It is more plausible you might want to use services or features on a side chain by moving your bitcoins there and then, relatively quickly, moving them back to the more secure main chain. For example, this might be be used for mixing, by moving your coins to a sidechain with ring signatures, transacting and then moving them back. But this ends up being a lot like using a Bitcoin mixer, with many of the same issues such as simultaneity. For example, imagine you are making a donation to some controversial organization and you want to delink the bitcoins you are donating. So you go ahead and move your coins to a ring-sig sidechain, move them around a few times, and then move them back. Unless other people are doing this at the same time, when you move your coins back to the main chain, you will get the same coins back that you started with. Alternately, perhaps the organization wants to be all anonymous and stuff, so it publishes an address on the sidechain, and you donate to them there. They then withdraw the coins back to the main chain, and they get the exact Bitcoins you sent to the side chain. Obviously if there are a few other people doing the transfers at the same time, there is a degree of mixing, but it is fairly limited. I don't think a side chain with a specialized purpose can achieve the same degree of anonymity as a coin designed for that purpose, where the entire chain is being mixed and remixed continually. That is an emperical question though. It is possible that a Bitcoin side chain could get more usage and greater trust of its security for long term holdings than Monero will have. More usage would address the mixing issue to a some extent and trust in the security would address the need to constantly move coins back and forth (though there still may be a loss of network effect here). None of this is clear at all. I also think it is possible the market may simply reject the notion of adopting the Bitcoin currency for everything. It will be an interesting experiment to decouple new features from using a different currency. We may well find that the reason for altcoins is not the features! Thanks Smooth for a proper answer. I have to say though that there are a lot of assumptions and far too many maybes in there for me. Best of luck to you, Risto and the rest of the team. |
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I am quite surprised the altcoin market isnt dumping in droves since the announcement of blockstream. What was once an iffy conceptual idea is now nearly an inevitability.
Perhaps your notion of why altcoins have value is incorrect. For example, one reason Litecoin has been described as having value is as a hedge against something going very wrong with Bitcoin (both technology-wise and economic/ecosystem-wise). Given that side chains are totally unproven, with uncertain effects, it is entirely possible that Litecoin could go rationally go up in value due to side chains. Also, I'm not convinced that the true version of side chains (that requires a hard fork) is inevitable. More likely than yesterday I would agree. Also, let's not forget that this for-profit company has scooped up several of the top Bitcoin developers. That could be good or bad for the rest of Bitcoin. I'm sure they would argue (both individually as a business) it will only be good. I'm not entirely sold on that premise. Yes, lots of linear thinking going on over in the sidechain camp. I keep bringing up the possible negative effects of a sidechain losing 20 to 30% of all btc and all they can say is "that will just make my coin worth more!". 20-30% of all of the bitcoins? Worst case it should be far lower, somewhere closer to 2% if one of the side chains fail. Its the same concept at play now - the larger the cap, the larger the target. If there is an exploit, someone will find it given a sufficient motivation to do so and that will be far less than a billion dollars. |
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I am quite surprised the altcoin market isnt dumping in droves since the announcement of blockstream. What was once an iffy conceptual idea is now nearly an inevitability.
Perhaps your notion of why altcoins have value is incorrect. For example, one reason Litecoin has been described as having value is as a hedge against something going very wrong with Bitcoin (both technology-wise and economic/ecosystem-wise). Given that side chains are totally unproven, with uncertain effects, it is entirely possible that Litecoin could go rationally go up in value due to side chains. Also, I'm not convinced that the true version of side chains (that requires a hard fork) is inevitable. More likely than yesterday I would agree. Also, let's not forget that this for-profit company has scooped up several of the top Bitcoin developers. That could be good or bad for the rest of Bitcoin. I'm sure they would argue (both individually as a business) it will only be good. I'm not entirely sold on that premise. one reason Litecoin has been described as having value is as a hedge against something going very wrong with Bitcoin -- I never understood the hedge argument for litecoin. If something goes wrong with bitcoin, why wouldn't it also go wrong with litecoin? After all they share the majority of their code. let's not forget that this for-profit company has scooped up several of the top Bitcoin developers. -- We don't know who scooped up who - though I guess we could ask in the AMA tomorrow. The point I was making is that they are a part of this project, which to me is a major indicator of the probability of the success of this project getting incorporated into the code. |
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Side-Chains wouldnt matter. You can already build entire currencies ontop the Bitcoin protocol. All side chains do, as another user suggests, is create a monopoly within Bitcoin, and would stop future innovation in cryptocurrencies. That's why I believe side chains wouldn't be popular, people buy alts for a reason, and that's either for p/d, or the belief that their altcoin will eventually overthrow Bitcoin one day given it improves upon Bitcoins many faults.
You can already build entire currencies ontop the Bitcoin protocol -- Currently, no you cannot do that. In order to change something you would need a fork. All side chains do, as another user suggests, is create a monopoly within Bitcoin, and would stop future innovation in cryptocurrencies. -- Side chains allow for all of the innovation of an alt while remaining within the blockchain, so the only thing that is monopolized is the finite number of bitcoins (which is a defining feature of crypto imo). The innovation can still happen just as it would in a pure alt. |
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In the wake of http://www.blockstream.com/ essentially making sidechains an inevitability - what is the point of holding XMR now? Wont all of the privacy Monero offers be available within the bitcoin blockchain? how? As I understand sidechains, you can essentially utilize all of the functionality of an alt while remaining on the bitcoin blockchain. This therefore removes the need for any alt, including Monero. i see. it is done by hand-waving. it is a familiar technique, which accomplishes much - but it does not accomplish what you suggest. Expecting a serious response to a serious question, but I get trolled. If you are looking to instill confidence in Monero this is not the way to go about it. |
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In the wake of http://www.blockstream.com/ essentially making sidechains an inevitability - what is the point of holding XMR now? Wont all of the privacy Monero offers be available within the bitcoin blockchain? how? As I understand sidechains, you can essentially utilize all of the functionality of an alt while remaining on the bitcoin blockchain. This therefore removes the need for any alt, including Monero. |
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I am quite surprised the altcoin market isnt dumping in droves since the announcement of blockstream. What was once an iffy conceptual idea is now nearly an inevitability.
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In the wake of http://www.blockstream.com/ essentially making sidechains an inevitability - what is the point of holding XMR now? Wont all of the privacy Monero offers be available within the bitcoin blockchain? |
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Bitstamp 1HR Time IntervalPrice managed to breach the first hurdles of 50MA and 100MA resistances to the upside. Now Bumping exactly @ the 200day Middle Bollinger Band Resistance. Must Break Above to Enter Long Trade.  Our setup has been issued 4hrs ago @twitter : Long: On a strong break above $387 (1HR 200MA) – Max Target $405 | Probability: 30% (has not triggered yet) © 2014 – Cryptoalerts.net Yeah cool, but hey why dont you make your own thread. This is a decent analysis but also a good way to find yourself on some ignore lists if it wasn't what people came here for. Its only for Luc. |
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