Atomic swaps don't remove it, but they are a different sort of exchange entirely.  They are a sort of middle ground, in between in terms of time and autonomy.  
They are p2p and negotiated (rather than something I can do on my own via exchange or SPV)
They also have a time requirement, just not as long.  
They could be somewhat automated with a hosted order book, so they may end up being closer to the exchange model, which would give them a bit of a premium over the SPV method.
The SPV folks (presumably the slowest of these three, each are more or less unused) pay in time and save in money.

Atomic swaps don't involve BTC, they involve scBTC and an altcoin that also exists on the sidechain along with the scBTC.

Appendix C Atomic swaps
Once a sidechain is operational, it is possible for users to exchange coins atomically between chains,
without using the peg. In fact, this is possible with altcoins today, though the independent prices
make it harder to organise. This is important, because as we have seen, direct use of the peg requires
fairly large transactions (with correspondingly large fees) and long wait periods. To contrast, atomic
swaps can be done using only two transactions on each network, each of size similar to ordinary
pay-to-address transactions

Correct.  I think its worth clarifying that the peg is algorithmic, because its seems from the thread that some people may not understand that.  You, personally, can ask the network automatically to swap unlimited quantities of BTC on the sidechain for BTC on the main bitcoin chain.

The only reason to swap with users using atomic swaps or trades is to do that faster.  No one is going to take anything other than a negligible price difference because they can click a button and move the coins between chains themselves.

Further because that 2wp backstop is there, and anyone and his dog can do arbitrage, with full confidence that they'll be able to exercise the 2wp and capitalise on the small time-preference, the will be small.  It seems just as likely that the sidechain coins sell at a small premium for the time-preference access to side-chain features.  (Time-preference means someones preference to gain access to something sooner rather than waiting eg 24hrs, and they'll sometimes be willing to pay a small fee to get it earlier, eg check advances or such things).

I dont think it realistic that we would see anyone willing to sell sidechain BTC at anything significantly below par in either direction, to do so is to burn money needlessly.  People will arbitrage it and its open to anyone to arbitrage.  So unless someone wants to burn money (and bitcoin already supports proof of burn or pay to miners if you're into burning money or donating to miners), no one will be offering to swap sidechain BTC for BTC at anything far below or above $350 (assuming current market price of $350).  eg $349.50 to $350.50 might be an example which is 15 basis points, that'd give someone a 15% return on an annual basis with steady arbitrage for a 2 day clearance time on the peg.  They can maybe get a higher return (and hence be willing to offer even lower margins) by holding a float on both sides and cancelling some trades against others as those happen faster so they get more than one arbitrage fee per exercise of the 2wp.

Obviously no one is encouraging anyone to put real money into untested or buggy sidechains.  I dont think there will be lots of sidechains and the main sidechains will be extremely well tested and coded to the same rigor as bitcoin itself.

Adam

Here is where you are flatly wrong.  There clearly is an incentive, the time incentive.
To change BTC to scBTC, you will have to wait for 100 blocks or so, whatever the confirmation time may be.
If you buy them at exchange, there is no wait.

This confirmation exchange value is created in both ways in the transaction.  People will pay a premium for time, localbitcoin pricing is evidence enough of this.

I would feel far more comfortable if over the next 2 years we cleaned up the code we had, commenting it, and reconciling it with projects like btcd addressing the bug for bug issues that propagate over time. before introducing more financial complexity.  I empathize with the community as a whole to add features they think will increase their investment, however, i would rather see the code base fare more secure - and a stable foundation before adding new dependencies.

In the current model, the specification *is* the protocol, and the
Bitcoin Core team is scared to death of changing anything; they've got
very little real power. Soft-forks are the minimum-viable way of making
changes to the protocol, and it's very clear how they get adopted:
minerr consensus. They're also a fundemental way of changing the
protocol that is impossible to prevent, so you might as well use it.

You know, the smartest thing the Bitcoin Foundation could do if they
wanted to cement their place in the Bitcoin ecosystem as a power broker
would be to setup a program of periodic hard-forks, say every year or
two, and then manage the committees that decide what goes into those
hard-forks. That they haven't suggested that yet is a sign that they're
either not evil, or they don't understand Bitcoin very well.

why wouldn't a new investor buy scZC on a fiat exchange?  why wouldn't a miner want to not only mine tx fees for scBTC as well as mine scZC block rewards + scZC tx fees?

don't say there is no one "using" scZC.  Bitcoin's price started out at $0 when no one was "using" it.  look what happened to it.

Surely this has something to do with Sidechains.

KNC plans for BTC domination may have hit a speed bump:
http://bitcoinbrothers.de/press/pr20141103

If side chains are proposed as a solution for Bitcoin scalability, then they must be actual Bitcoin transactions.

If side chains aren't actual Bitcoin transactions, then they are not a solution to the problem of enabling the network to perform more Bitcoin transactions.

In this case, they are solving some other problem entirely.

How do sidechains differ from treechains?

While we noticed many in the community comparing treechains with sidechains as potential competition, the two ideas are largely unrelated.
While treechains is a proposal to further the scaling of blockchain-based systems, the two-way peg is a mechanism for moving assets across
blockchains without a trusted party, furthering the extensibility of the entire system.

this is so blatantly economically naive that i am forced to give brg444 a pass; after all, he's a 24 yo kid with a self admitted shitty job. 

you mean the "sidechain" thread

https://twitter.com/jonmatonis/status/527846975769956352


Something big is brewing.

I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins, in spite of any so-called 2-way peg, or if they were perfectly fungible you would still end up with whatever percentage of the coins that had been mined constituting an inconvertible set of coins.

Interesting idea.

Question : who mines the spin-offs? Can the same concept of merge-mining be applied ?

Can someone ask kindly Jeff to stop stalking NXT and Mr Maxwell his sidechains coding and both have a look at this:

http://t.co/eWNQq2h1Cx

??


WTF ? ? ? ?

About pegging.

To have pegging, there must be an authority that guarantees the peg to the main coin.