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Looks like DGEX shares will be going for cheap by tomorrow.
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So is it the case that at any time, anyone can move any amount of BTC that they control into any sidechain?
Yes, and in doing so they give up access to those bitcoins. So the amount of total bitcoin-equivalent coins under control by users is conserved. EDIT: What I am getting at is whether there are limits to the number of units on a particular sidechain.
Well there obviously can't be more than 21 million * peg price sidecoins. Other than that, the number of sidecoins in existence is simply determined by current demand. It helps to think of sidecoins and bitcoins being the same thing, as distinctions between the two are mostly implementation details. At any given time there are max 21 million bitcoins in existence, some of them on the main bitcoin chain, some of them on specific side chains. One does not need to find a "seller" or "redeemer" of sidecoins to make a BTC-sidecoin trade, since the sidecoin is not truly a separate unit of currency, so one is not really trading into it, correct?
This is getting into implementation details, so pay close attention to the parts which seem contradictory. Conceptually anyone who wants sidecoins and has bitcoins or vice versa can simply move value from one chain to the other, in essence destroying bitcoins and printing sidecoins albeit in a reversible process. However, this takes a considerable amount of time to clear -- about 3 days -- and blockchain space which requires fees. So in practice we fully expect that someone wanting to trade bitcoins for sidecoins will use a distributed marketplace and atomic cross-chain swaps in order to buy one coin with another, by finding a buyer at the other side. Use of the pegging mechanism will be limited to market makers who arbitrage when the price starts to deviate from the peg. Make sense? Yes, that makes sense. Why will it take 3 days to clear? It will be interesting to see (if this is actually implemented) how the distributed marketplaces will act. They will reserve certain amounts of particular sidechains, so how will they know how much? Will their fees for transacting bitcoins for sidecoins and back depend upon the scarcity of the sidecoins they have allotted/reserved? Will such fees be flexible according to the demands for particular sidecoins? We will see, perhaps. I initially was confused because people were talking about running altcoins as sidechains, and I thought that meant that the same unit limits would be enforced. Now I see that sidechains are simply ways of running your bitcoins as/through specialized protocols that are not available through the primary bitcoin blockchain. Thank you for your detailed responses. And I apologize to the Counterparty regulars. It appears we've used this thread to talk about something that is not specifically about internal Counterparty issues, though it might bear on Counterparty. |
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2-way pegging means that value may be transferred at a pegged (fixed) rate in either direction.
<snip>
This special form output is a script which is able to understand an embedded proof-of-spend from another chain, which validates the accounting rules (you need to spend X bitcoins to claim X sidecoins, and vice versa), and which makes sure that claimed coins go to the indicated recipient.
<snip>
this question related to the red-marked quote: What happens if I moved a BTC to a side chain to be used with a financial instruments such as options or even betting and GAINED an equivalent value to what I moved out. I now have 2 sidecoins but previously moved only 1BTC. can I go 1-way with one of them? Yes, because the 1BTC that you gained through trading had to be originally moved into the sidechain as well, and it can be redeemed in the same way. Where did this gain, this additional sidecoin, come from? Who knows? Trading? Betting? SatoshiSidecoinDice? Either way, that coin didn't come from nowhere. It came from someone who moved it into the sidechain from the mainchain. So is it the case that at any time, anyone can move any amount of BTC that they control into any sidechain? EDIT: What I am getting at is whether there are limits to the number of units on a particular sidechain. One does not need to find a "seller" or "redeemer" of sidecoins to make a BTC-sidecoin trade, since the sidecoin is not truly a separate unit of currency, so one is not really trading into it, correct? (Thank you all for your patience and generosity in responding to my questions. I assume others trying to learn, too. I'm trying to piece things together from here and the two reddit threads.) |
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2-way pegging means that value may be transferred at a pegged (fixed) rate in either direction.
<snip>
This special form output is a script which is able to understand an embedded proof-of-spend from another chain, which validates the accounting rules (you need to spend X bitcoins to claim X sidecoins, and vice versa), and which makes sure that claimed coins go to the indicated recipient.
<snip>
this question related to the red-marked quote: What happens if I moved a BTC to a side chain to be used with a financial instruments such as options or even betting and GAINED an equivalent value to what I moved out. I now have 2 sidecoins but previously moved only 1BTC. can I go 1-way with one of them? Yes, because the 1BTC that you gained through trading had to be originally moved into the sidechain as well, and it can be redeemed in the same way. Where did this gain, this additional sidecoin, come from? |
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This is interesting! "To address the dearth of nodes in the Bitcoin network, the Counterparty Team will be launching the Nodeshares initiative. Nodeshares is a
non-profit that collects donations for the setup and maintenance of full bitcoin nodes."<snip> "To kick-start the Nodeshares initiative, Counterparty will be donating 100 full nodes to Nodeshares, which is approximately 1.1% of the total nodes in the Bitcoin network. For comparison, Counterparty data currently makes up approximately 0.03% of the data in the blockchain."https://www.counterparty.co/full-bitcoin-nodes... and ... http://nodeshares.comThe pope just rang me up to tell me you guys have just been granted Aureoles. Wash them separately at 30 degrees. But really, this is incredible. After paying a 2000+ dividend to all holders of BTC rather than keeping it for yourselves you step up once more and do this. May the haters forever be silent, and may all the initiatives in the community share this spirit. I salute you. What's just as incredible is that in the hour or so that this post has been up on reddit, 8 comments have been made, and none of them is hating on Counterparty. This is some kind of record, I think. |
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any comments on how side chains make counter party redundant?
Theoretically, a side-chain can be created to do the same things as Counterparty, Mastercoin, or any true altcoin. However, I wonder at the financial incentive to create an altcoin or XCP as a side-chain. Since the side-chain "currency" (not a true coin) will have to be created by burning/suspending/reserving BTC, and the second peg will unburn/unsuspend/redeem at most the same total amount of BTC, isn't the total value of the side-chain "currency" forever limited by the amount of BTC that was reserved for creation? Let's say someone develops a really cool side-chain currency that does wonderful things, and everyone is using it and wants it. How is the value of any unit of that currency going to increase if it can only ever be redeemed for the same amount of BTC that was reserved to create it? I don't see how it's possible for the side-chain currency to have its own ecosystem and be, in a sense, detached from the original BTC reserve amount. (But I didn't major in math or economics, so maybe I'm missing something.) Please see some of the questions posed by taariqlewis in this reddit thread for more: http://www.reddit.com/r/Bitcoin/comments/22p0ch/eli5_side_chains/ |
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Mike Hearn on upcoming Bitcoin protocol updates: https://www.youtube.com/watch?v=-XxB03SfGbUDoes anyone know more about the payment protocol part that he is referring to here at 5:40? It sounds like it is relevant to the OP_RETURN data size issue. |
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Can you ask PP to update page 1? It still has the link to testnet and not this link. |
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Article about ANC and Zerocoin implementation at CryptocoinsNews.com. http://www.cryptocoinsnews.com/news/anoncoin-release-zerocoin-implementation-testnet-this-week/2014/04/07It's a strange article that is more about the relationship of Bitcoin to altcoins, which Torpey, the author, says are merely experiments of features that might eventually make it into Bitcoin. Would someone more competent than I am like to respond? I think Torpey is wrong about whether Bitcoin will eventually add in the functionality experiments of altcoins, particularly the Zerocoin implementation of ANC. ANC will have its own user base and will be, I think, a necessary alternative to Bitcoin, since the Bitcoin core developers don't seem to be very interested in thinking beyond the single application: a streamlined currency with mass adoption.
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I have a major problem with this: Fictitious names may result in loss or forfeiture of your physical assets and digital tokens. I will never trust anyone who makes a statement like this with my money for anything other than very short pass-through. What it amounts to is that you are reserving the right to steal someone's property. If you decide you don't want to do business with someone, you should just return their assets to them in full. Ah. Good catch td services. I think there may be some confusion which we need to address. This "real name" requirement is for the AML/KYC requirements at redemption where we deliver physical gold to a contact. For example, we cannot redeem physical gold to Santa Clause residing at 85 Broad Street, 2nd Floor, New York, NY, 1004. If the gold being redeemed is 100 Oz or $130,000 USD, then we will need correct contact information of the person taking the gold. If they provide false information, we do not personally take the gold, but we may have to report suspicious activity and alert authorities that Santa Clause tried to make a withdrawal. We BTT cannot be seen or perceived to be an avenue for money launering or withdrawal of stolen coins. We would gladly consider rewording that answer if you have any recommendations that better communicate our risk management approach above. Lastly, we cannot enrich ourselves on fraudulent activity or take precious metals that are rightfully owned by our customers. That would be fraud as well. BTT EDIT: Updated the Policy to clarify that we're targeting fraudulent contact information. "Fraudulent contact information used for redemption of physical precious metals may result in loss or forfeiture of your physical assets and digital tokens."BTT, phrasing is everything. You might simply say that your policy is in accord with the laws of <insert jurisdiction here> and that the intent is to protect your customers from bad actors. Phrase it so that you position yourself as advocates for your clients' interests. You don't want to appear to be agents of a "Big Brother" surveillance program, or the "precious metals police," determined to exploit your customers' desire for privacy, right? And connect your statement with the mission of your business, which is about relying on the security of the blockchain, the reputation of your custodians (along with appropriate auditing), and universal access afforded by Bitcoin and Counterparty. Your policies are meant to make it difficult or impossible for bad actors to violate the "Circle of Trust," right? |
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have you considered issuing pxgold asset later ?
Absolutely. If you could also consider stopping your daily spam / scam ... Oh, Bellebite, you used to occasionally provide some needed critique, albeit inelegantly expressed. Your poor etiquette and childish tantrums were at least redeemed by your humor. Now you're just an unfunny, drunk heckler. Please excuse yourself and slip out the back. |
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Some of my favorite quotes from this must-read paper: "Along these same lines, we instrumented a 3-day long trace disproving that our methodology is unfounded. We use our previously analyzed results as a basis for all of these assumptions. This may or may not actually hold in reality." (p.2) "Glad, our new application for local area networks, is the solution to all of these obstacles." (p.1) and "Next, we present our model for confirming that Glad is impossible. Of course, this is not always the case." (p.2) "We plan to release all of this code under write-only." (p.2) "Our logic follows a new model: performance really matters only as long as performance takes a back seat to expected seek time. We hope that this section illuminates the work of Japanese mad scientist J. Williams." (p. 3) |
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CFB, is this an Aprils Fools Joke?
Where, geographically, is April Fools Day celebrated? |
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Regarding the dust-up over whether to stay on Bitcoin and PoW or move to something else/create something else that is PoS... etc.
Right now XCP is in the "proof of concept" stage. An incredible amount has been done, but much is still under development, not only in terms of code, but in terms of gaining traction in any markets for which XCP can potentially be a solution. Until the concept is "proven," it has much to lose and little to gain by creating its own blockchain, or hitching a ride on a less secure and less trusted blockchain. When creating a new product or service, you don't want too many variables in play at a time; you need something stable, and Bitcoin provides that stability. I agree with Matt Y; if XCP needs to migrate to another chain for whatever reason, there will be a time to do so. But moving now just adds another element of "unproven-ness" to this proof of concept.
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Possible April Fools' joke...
While the "no funding" thing is in some ways a disadvantage, mostly due to the lack of funding, in other ways it's been advantageous. Counterparty is about five months old as a project and we have the first functioning DEx as well as a fully functioning deterministic web wallet that was created in a few months, drastically increasing usability and it will be live shortly. That is great progress. Burning bitcoins into a black hole is never going to be the most "productive model" because you are destroying value. You are trading monetary value in order to ensure risk and reward are both distributed as evenly as possible. It also immediately aligns developer priorities with every person who burnt a bitcoin. The Counterparty developers are developing at an incredibly fast pace. Compare Counterparty's development timeline to other second generation projects. Five months in, I have no complaints. In fact, no funding appears to have had no effect on the project's development. The same can be said for other unfunded projects, such as Linux. Furthermore, too much money, too soon, can easily destroy a project. Nontechnical people likely "only care about the price" when an altcoin does not have significant utility behind it. There are no apples to apples comparison for Counterparty because of the utility that the protocol provides. When Counterparty is easier to use, people will be buying and selling XCP to do various actions within the Counterparty ecosystem, not because of the price. Also, the recent downturn in market caps has largely been "industry" wide, from bitcoin on down. Well said, sir. We have traded onerous corporate governance for rapid software execution. I can go into how fast BTT has setup a business atop of Counterparty, but that would encourage competitors and I'd prefer we have less. Counterparty has made the ridiculously impossible, possible in just 3 months. More to is yet to come! I would show up two hours early to the party just to talk to you, BTT. And I'd bring investor friends. |
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Let me ask a really basic question, since I can't figure it out by reading all of the posts about the 80-->40 OP_Return change and what this means for data stored on the blockchain.
Q: Why does someone run a node?
I understand why miners mine; they earn fees. Nodes do not. So why does someone do it?
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I just wanted to point out Vtalik Buterin's gold nugget of a comment concerning 'smart fees' being implemented into the Bitcoin Protocol.
“It’s the protocol’s fault the OPRETURN battle is such an issue. In an ideal world, the concept of ‘abuse’ would not even exist; fees would be mandatory, and carefully structured to closely match the actual cost that a given transaction imposes on the network,” he says. “If you can pay the fees for what you’re doing then you should be able to do it, no questions asked.”
And from one of the Bitcoin core devs, a less optimistic outlook, as quoted by freedomfighter yesterday: ...
Mark Friedenbach • 5 minutes ago
...
This is a fundamental incentive problem with bitcoin today, and the parasitic use of the block chain as a publication system for Counterparty, Mastercoin, etc. is exacerbating the problem without any attempt to provide a solution. If and until the incentive problem is fixed (it's not clear it can be!) these groups should be doing their transactions on a separately validated side-chain, so only those users who opt-in to running the side chain incur the cost. Hopefully using 2-way pegging so their currency can be bitcoins, if they want to avoid the scummy currency issuance investment model.
...
Mark Friedenbach
Bitcoin Core developer
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What about requiring the issuer to put collateral (xcp) into the system. For example: I issue LTC within Counterparty and have to put up xcp worth the amount of LTC that is bought from me. This would make the system more safe/reliable and boost the demand for xcp.
Funnily enough, I just posted a similar idea in the main Counterparty forums. +1  @xnova, thanks for your post above. Any comment form developers on the collateral idea? Ad- and disadvantages? Posibility of implementation? I like this idea a lot. It's almost like a margin call, where the issuer needs to keep putting up collateral as the value changes. Maybe the details about max funding amount, duration, etc. could be specified in new asset fields? If the issuer didn’t want to be long XCP vs. the other asset they could also raise money on the DEX, buy LTC (or whatever) with the XCP they raise and keep that as side collateral so that they are never better or worse off as the asset changes in value. There is nothing to stop people from issuing LTC (or whatever) trading derivatives, similar to how XBTC has been created on Counterparty as essentially a proxy for BTC. We encourage folks in the community to come up with and enact these kinds of use-cases (in a thoughtful, responsible manner, not unlike how XBTC was created and is operated). What I meant was to (medium/long term option) hardcode the need for collateral (xcp as collateral)... Does any sort of collateralization requirement denominated in XCP limit the total amount of assets that can be traded on the exchange to the market cap of XCP? How do you work out the margin requirement? Or is the idea that any asset in one's possession can be used as collateral, but represented as an XCP equivalent? |
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One of the primary arguments against POS - that one doesn't need to spend/invest in order to earn money through fees - is also an argument against saving to earn interest.
Certainly there will be people who hoard in order to earn fees, but no entrepreneur will be satisfied with such low returns. They will spend/invest their money to develop useful products and services for the prospect of significantly greater returns than through collecting tolls. And other users will want to buy those products or services, since the product or service is worth more to them than the little income they earn from the POS transaction fees.
There will always be hoarders, as I say, but the hoarders provide ballast and stability to the currency. Most savers will use the currency because it only has value when it is spent to create or consume real-world products and services.
Hey, luizchen, I notice that you copied my entire post from yesterday word-for-word, and represented my words as if they are yours.  What are you doing? https://bitcointalk.org/index.php?topic=395761.msg5894437#msg5894437One of the primary arguments against POS - that one doesn't need to spend/invest in order to earn money through fees - is also an argument against saving to earn interest.
Certainly there will be people who hoard in order to earn fees, but no entrepreneur will be satisfied with such low returns. They will spend/invest their money to develop useful products and services for the prospect of significantly greater returns than through collecting tolls. And other users will want to buy those products or services, since the product or service is worth more to them than the little income they earn from the POS transaction fees.
There will always be hoarders, as I say, but the hoarders provide ballast and stability to the currency. Most savers will use the currency because it only has value when it is spent to create or consume real-world products and services.
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Open question:
What are the chances that entrepreneurs and investors (like those at the CoinSummit right now) will put pressure on the Bitcoin core developers to cooperate with innovative technologies like Counterparty and Mastercoin? The investors that I have in mind are aware of the potential of Bitcoin and other cryptocurrencies to do things that current financial and commercial products and systems cannot do, and they see this space as a vast, untapped reservoir. Will they be able to sway the core developers to be more cooperative in order to develop the many supplemental products and services that can run on top of Bitcoin? What's your guess?
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