I don't know if it is a new problem or not, but the explanations and creation of understandings in the minds of the broader public may be made more difficult by the "one ledger only" notions. EmptyGox very clearly had its own ledger which at some point became irreconcilable with the Bitcoin block chain. If it were a side chain company that had monkeyed with its code to do these shenanigans, it would possibly been more noticeable (if it were being openly mined by folks that examine source changes), but if they managed to keep it hidden, or were privately mining (like Ripple?) it may also be more difficult to explain to the "one ledger only" believers how this is possible.
In the earlier example where scBTC1 failed and scBTC2 became an altcoin, at some point in this process there are very clearly (at least) two separate ledgers.
I would suggest that at the inception of each of the side chain's block chain, there and then emerges a new ledger, which are each potentially merge-able. Others might suggest some other time. Maybe at one of the many changes that resulted in the failure of scBTC1, or maybe after it fails, or maybe never and the scBTC2 altcoin and Bitcoin are still just one ledger. In that case, when the ledger of scBTC1 failed, some might get confused and say the Bitcoin ledger failed. (Since they have been told that there is only one ledger, and something failed, so it must be that.)
It seems simpler and more sensible to me to consider each side chain its own potentially merge-able ledger. It is hard enough to try to explain how a ledger is merged with "something" when there is only one ledger in the first place, with what then is it merged?
I think the notion that there is one main ledger is absolutely accurate In my view, the more accurate definition of sidechains are that they are a sub-ledgers of Bitcoin. I would suggest that at the inception of each of the side chain's block chain, there and then emerges a new ledger, which are each potentially merge-able.
This is the part where I disagree. There are no coins in a sidechain at its inception therefore there is no ledger. The ledger is only created once coins derived from the main ledger (Bitcoin) are locked into the sidechain. For that reason I believe the best way to describe it is one main ledger equipped with several other sub-ledgers that derive their monetary unit from the main ledger. |
|
|
|
talk about backpedaling.
so now your argument is no longer that this will not happen but instead that fools will be fools, which was my point all along.
You really shouldn't talk about backpedaling, this is really all you've been doing for the last 100 pages. My argument was never that schemes like this wouldn't happen. In fact, please dig up ONE post where I say so. I'll wait Of course, and this actually support my point.
We are going to see MtGoxCHAIN, MoohlahCHAIN *truthcoinCHAIN* but eventually CoinbaseCHAIN, CircleCHAIN or BitstampCHAIN are going to be established and these are the ones "ordinary people" are going to use
|
|
|
|
i've heard the "solution to altcoins" argument at least a dozen times.  And it absolutely might be true but do you really think the guys Blockchain, when developing sidechains, were like : "These damn altcoins! We'll show em!" The "major" argument is that the innovation of sidechain make most altcoins irrelevant but allow us to conserve their original intended purpose which was to innovate on top of Bitcoin. To say "oh well network effect was taking care of that anyway so no need for sidechains" is shortsighted at best. not those exact words. i suspect they were more subtle, like here pg 14:
5.1 Altchain experiments
The first application, already mentioned many times, is simply creating altchains with coins that
derive their scarcity and supply from Bitcoin. By using a sidechain which carries bitcoins rather
than a completely new currency, one can avoid the thorny problems of initial distribution and
market vulnerability, as well as barriers to adoption for new users, who no longer need to locate
a trustworthy marketplace or invest in mining hardware to obtain altcoin assets.Exposing the weaknesses of altcoins to support the advantages of using the sidechain technology.. how dare they do that! |
|
|
|
you're cherry picking old news.
it's changing for the better. for instance, Bitstamp's main investor is Pantera Capital who is not only forcing founders to comply with consumer regs but is also risking equity that can be seized if Bitstamp tries something funny. this is happening across the industry.
Of course, and this actually support my point. We are going to see MtGoxCHAIN, MoohlahCHAIN but eventually CoinbaseCHAIN, CircleCHAIN or BitstampCHAIN are going to be established and these are the ones "ordinary people" are going to use |
|
|
|
look everyone! a Free Lunch! Cashcoin!   looks legit, would invest +1 the point is, there are plenty of ppl who will.  A fool and his money.... yeah you know the rest |
|
|
|
...
There was a miner convention no later than last week that kind of drove this point home : miners are some of the most bullish actors in the BTC scene. It is misguided to assume that they are selling most of their coins.
...
If miners sold every coin that they mined and did not believe in the future of Bitcoin, would you expect them to admit it? That would be a bit like a fishmonger yelling "Fish, not-so-fresh fish! Stinks to high heaven, I can't stand it, buy my fish!" You tried that one in the other thread troll. Please go away you stink rotten fish. Yes it is perfectly reasonable for them to admit they are selling in order to cover the cost of their operations. Some admitted they do so and there are absolutely miners out there who have no problem admitting they sell a large quantity of their coin so that kind of defeats your argument, doesn't it? Troll Faggot isolated actors =! the majority, troll |
|
|
|
Confusion between "did Bitcoin fail me and lose my coins or did a Sidecoin fail me and lose my coins" is a very legitimate issue. I'm worried about this also.
I think a lot of side chains will be seen as services beyond the main chain. For example today if one wants to anonymize coins they need to go use some sort of mixing service, if they lose their coins in the process the service takes the blame though, not bitcoin. I think sidechains will be the same, people have bitcoins and then decided to use some anonymous sidechain service, if they lose their coins I think it will be clear it was the sidechain / service at fault.
If a sidechain is integrated into Bitcoin-qt or blockchain.info to the extent that you're not even aware of the sidechain being used, then I can see the scenario you're describing as being confusing and damaging to Bitcoin. But I think SC's will be implemented in a manner that it is clear when they are being used.
At least that is my expectation / hope.
Sidechains are like Bitcoin companies/services. If you decide to trust some shady one because it promises unconvential returns or features then you expose yourself to the underlying risk that they disappear with your money. When we get to "ordinary people" using Bitcoin, established sidechains that have been carefully reviewed and vetted by the community will be available and should serve any conventional need that a consumer might want. My guess is that at this point they are not even referred to as "sidechains" but Bitcoin "applications" or services. If one decides to step outside of this "safe" environment and experience more obscure services/sidechains then he should proceed with caution much like he should be doing when dealing with less renowned companies. I can always blame Bitcoin companies/service, but how do you hold a decentralized P2P MM SC responsible, when you are entrusting your coins to a decentralized protocol run on p2p network, not a Bitcoin companies/service, in this scenario SC failure is a Bitcoin Failure. if you are introducing billions of these SC, companies will try to reduce liability by issuing a SC MM independent prototypical - "they dont make mistakes it was a fault of the protocol", the risk of failure grows exponentially as more SC come on board. Alts are not a treat anyway, the goal is may the best money win, and bitcoin is such a quantum jump from what we had, Alts are an incremental improvement. I understand where you're coming from but I didn't see "blame" putting the cash back in the pocket of MtGox, Moolah, etc customers. At the end of the day the money is lost and most of the blame is on the user for not properly assessing the risks. |
|
|
|
look everyone! a Free Lunch! Cashcoin! looks legit, would invest +1 |
|
|
|
i've heard the "solution to altcoins" argument at least a dozen times. And it absolutely might be true but do you really think the guys Blockchain, when developing sidechains, were like : "These damn altcoins! We'll show em!" The "major" argument is that the innovation of sidechain make most altcoins irrelevant but allow us to conserve their original intended purpose which was to innovate on top of Bitcoin. To say "oh well network effect was taking care of that anyway so no need for sidechains" is shortsighted at best. |
|
|
|
we've been told that one of the benefits of SC's is in crushing altcoins. if the current network effects are already doing that, and i agree that they are, that takes away a major argument to implement them.
NL's point is that this severing of the path back to BTC will create losers and thus destroy confidence, not only for the loser's themselves, but for the rest of us potentially.
 please don't be so shallow. SC's were absolutely not created in order to "crush" altcoins. neither is it a "major" argument to implement them. the reasoning is that once implemented it should discourage the creation of alt-scams and refocus the energy of developers on innovation within Bitcoin's ecosystem. lol, i guess i'm hearing things. You're not, you just need to be a little more honest in your arguments. |
|
|
|
Right now low bitcoin price causes larger and larger bitcoin numbers to be dumped by miners to compensate for their costs. This is a vicious cycle that, in my opinion, will be broken only when higher cost producers are eliminated from mining OR there is a sudden increase in buying with the latter being unlikely.
Miners dumping all dumping a majority of their coin is a myth that I have repeatedly proven to be wrong. Economically, mining is a different business than holding. If a person wants to hold BTC, it is not relevant if the value to be held was created with mining BTC or anything else. IF mining profitability is down, and consequently miners don't make profit, this could practically be bad for bitcoin IF it is so that miners tend to hold a high % in bitcoin (which is plausible). I agree but my opinion is that the price situation would need to be catastrophic for large scale miners to resort to dumping their reserve. As I have mentioned in another post related to this, most of them have other revenue stream atm that certainly generate enough money to cover their operational cost. |
|
|
|
...
There was a miner convention no later than last week that kind of drove this point home : miners are some of the most bullish actors in the BTC scene. It is misguided to assume that they are selling most of their coins.
...
If miners sold every coin that they mined and did not believe in the future of Bitcoin, would you expect them to admit it? That would be a bit like a fishmonger yelling "Fish, not-so-fresh fish! Stinks to high heaven, I can't stand it, buy my fish!" You tried that one in the other thread troll. Please go away you stink rotten fish. Yes it is perfectly reasonable for them to admit they are selling in order to cover the cost of their operations. Some admitted they do so and there are absolutely miners out there who have no problem admitting they sell a large quantity of their coin so that kind of defeats your argument, doesn't it? Troll |
|
|
|
we've been told that one of the benefits of SC's is in crushing altcoins. if the current network effects are already doing that, and i agree that they are, that takes away a major argument to implement them.
NL's point is that this severing of the path back to BTC will create losers and thus destroy confidence, not only for the loser's themselves, but for the rest of us potentially.
please don't be so shallow. SC's were absolutely not created in order to "crush" altcoins. neither is it a "major" argument to implement them. the reasoning is that once implemented it should discourage the creation of alt-scams and refocus the energy of developers on innovation within Bitcoin's ecosystem. |
|
|
|
Confusion between "did Bitcoin fail me and lose my coins or did a Sidecoin fail me and lose my coins" is a very legitimate issue. I'm worried about this also.
I think a lot of side chains will be seen as services beyond the main chain. For example today if one wants to anonymize coins they need to go use some sort of mixing service, if they lose their coins in the process the service takes the blame though, not bitcoin. I think sidechains will be the same, people have bitcoins and then decided to use some anonymous sidechain service, if they lose their coins I think it will be clear it was the sidechain / service at fault.
If a sidechain is integrated into Bitcoin-qt or blockchain.info to the extent that you're not even aware of the sidechain being used, then I can see the scenario you're describing as being confusing and damaging to Bitcoin. But I think SC's will be implemented in a manner that it is clear when they are being used.
At least that is my expectation / hope.
Sidechains are like Bitcoin companies/services. If you decide to trust some shady one because it promises unconvential returns or features then you expose yourself to the underlying risk that they disappear with your money. When we get to "ordinary people" using Bitcoin, established sidechains that have been carefully reviewed and vetted by the community will be available and should serve any conventional need that a consumer might want. My guess is that at this point they are not even referred to as "sidechains" but Bitcoin "applications" or services. If one decides to step outside of this "safe" environment and experience more obscure services/sidechains then he should proceed with caution much like he should be doing when dealing with less renowned companies. |
|
|
|
no i don't agree. i think NL's example is a good one showing increased risk.
ordinary ppl won't necessarily understand the bolded statement as you presume.
The risk is the same : to trust your money elsewhere than on the blockchain. The schemes to deceive people into doing so might increase in numbers with sidechain but the risk is the same. As for your second comment, I'm sorry but they absolutely should understand it. It is the very principle of Bitcoin : creating a trustless environment. It took a long time for Bitcoin to establish this status and it should be obvious that any step outside of its circle exposes you to risk that should be accounted for. Also, I have some difficulty with your proposition that "ordinary people" will be trusting their money to all kind of obscure sidechains. Ordinary people only trust mainstream and established platforms. It is very unlikely the majority of them will fall victim to overlycomplicated schemes. |
|
|
|
If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.
Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.
1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.
(Yes, you can create a side chain from a side chain.)
complexity risks...
Edit: Is there a way to have such an event without sidechains, or is this a "new" risk?
well essentially you're suggesting the coins were initially transferred to a non-secure scheme without proper due diligence from the owner so my answer is no, this is not a "new" risk. Can you help me understand how do we do this without the side chains? For example, using an alt coin does something quite different: If I sell bitcoin for an alt coin which turns out to be a long con scam, but before the scam was sprung, I had traded them to a different alt coin, I could still trade that second alt coin for BTC, and the BTC I initially traded away are not essentially "burned" they are still being exchanged on MC by whomever got them from me. It doesn't matter if you transfer it to a second, third or fourth sidechain. The onus of your decision is in validating the security of your initial transfer off the Bitcoin mainchain. Either you keep your Bitcoin on chain or you take the risk of trusting some other scheme with your coins. What is the incentive? What are the risks? Any ensuing event will be a consequence of that decision. Once you leave the mainchain you forego your position in the only established trustless crypto environment. we're worried about ordinary ppl who in the future might want to get into Bitcoin. they won't have the technical expertise or knowledge to know what's going on. as we've seen from altcoins, they can always attract a crowd be it with deception or true value. to think that SC's changes this is to be determined. you did see my post from earlier today? So do I understand that you agree with me that a new risk is not introduced? There is always an inherent risk when trusting your Bitcoins to be somewhere else than on the blockchain. Now to be completely fair, does Sidechain offer new schemes that could potentially abuse and profit from this risk? Probably. But from my point of view this is the nature of the beast : as the technology evolves so does the potential for more elaborate scams. |
|
|
|
Right now low bitcoin price causes larger and larger bitcoin numbers to be dumped by miners to compensate for their costs. This is a vicious cycle that, in my opinion, will be broken only when higher cost producers are eliminated from mining OR there is a sudden increase in buying with the latter being unlikely.
Miners dumping all dumping a majority of their coin is a myth that I have repeatedly proven to be wrong. Such "proof' or links to such is/are missing from your post. Regardless, if miners DO NOT sell their coins, then this bear market is about to get even worse, because at some point they WILL (when price/cost ratio becomes even more skewed). Don't take me as a bitcoin bear, though. I bought bitcoin, I mine, I am not selling (somewhat irrationally). In my opinion the scenario I outlined is the one that is most likely to occur, but I have no crystal ball. BitFury founder and CEO Valery Vavilov indicated that the new funding will allow the company to complete production of its 28nm ASIC chip without selling the reserve bitcoins it has mined from its three industrial-scale data centres. Vavilov told CoinDesk that it decided not to tap its bitcoin reserves as it remains bullish on the long-term value of bitcoin.
“We believe in the long-term perspective [the price of bitcoin] will grow and we decided to not to sell [our bitcoin] at such a low price,” Vavilov added. http://www.coindesk.com/bitfury-raises-20-million-asic-development-mining-output/This is from the CEO of one of most important industrial scale mining operations. For most of them, the "massive regular expenses" are paid for by massive VC investements. Don't forget that these entities also sell mining rigs at massive profit. Money came easily to startup KnCMiner, which says it made $70 million in revenue in its first year of operations from selling bitcoin mining equipment.
This money is more than enough to cover for expenses. There was a miner convention no later than last week that kind of drove this point home : miners are some of the most bullish actors in the BTC scene. It is misguided to assume that they are selling most of their coins. |
|
|
|
That is breaking the link.
They are taking the Bitcoin brand and applying it to their (and others' but I think they are more concerned with theirs) sidechain coin, which is not Bitcoin but is another coin backed by Bitcoin held in reserve.
If Bitcoin were a defended trademark this appropriation would likely not be allowed. As a practical factual matter it is also untrue. The actual Bitcoin do not and can not leave the Bitcoin blockchain.
They may get away with it though, because as others have pointed out here, the Bitcoin-the-currency/Bitcoin-the-blockchain meme is popular and spreading.
Well it hasn't come to pass yet, that idea atm remains fiction. I'm sorry but you guys are confusing two ideologies for one. Blockstream's idea, whether you support it or not, does not suggest that the Blockchain can be supported without Bitcoin. The meme Peter R was referring to is the one parroted by mainstream media pretending that Blockchain tech does not need its own native currency. "Why not use it to trade USD" |
|
|
|
If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.
Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.
1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.
(Yes, you can create a side chain from a side chain.)
complexity risks...
Edit: Is there a way to have such an event without sidechains, or is this a "new" risk?
well essentially you're suggesting the coins were initially transferred to a non-secure scheme without proper due diligence from the owner so my answer is no, this is not a "new" risk. Can you help me understand how do we do this without the side chains? For example, using an alt coin does something quite different: If I sell bitcoin for an alt coin which turns out to be a long con scam, but before the scam was sprung, I had traded them to a different alt coin, I could still trade that second alt coin for BTC, and the BTC I initially traded away are not essentially "burned" they are still being exchanged on MC by whomever got them from me. It doesn't matter if you transfer it to a second, third or fourth sidechain. The onus of your decision is in validating the security of your initial transfer off the Bitcoin mainchain. Either you keep your Bitcoin on chain or you take the risk of trusting some other scheme with your coins. What is the incentive? What are the risks? Any ensuing event will be a consequence of that decision. Once you leave the mainchain you forego your position in the only established trustless crypto environment. |
|
|
|
That is breaking the link.
They are taking the Bitcoin brand and applying it to their (and others' but I think they are more concerned with theirs) sidechain coin, which is not Bitcoin but is another coin backed by Bitcoin held in reserve.
If Bitcoin were a defended trademark this appropriation would likely not be allowed. As a practical factual matter it is also untrue. The actual Bitcoin do not and can not leave the Bitcoin blockchain.
They may get away with it though, because as others have pointed out here, the Bitcoin-the-currency/Bitcoin-the-blockchain meme is popular and spreading.
Hmm I hope you realise the contradiction in your comment here : if the "actual Bitcoin do not and can not leave the Bitcoin blockchain" then no "that is *not* breaking the link. I do understand your argument though and I don't see any malicious intent in the marketing of their scheme as "Bitcoin moving across" chain. It is simply easier for everyone to understand and if the math are properly implemented making the algorithmic peg safe & sound then while it may be true it is not the actual Bitcoin that is moved to the sidechain, its representing unit is as close to bitcoin as anything can be. |
|
|
|
|
Show Posts
