It is economically naive to fail to consider that a feature that adds value in one economic condition, may subtract it in another, and that movement of money may follow this with a lag, sometimes a very significant lag due to practical constraints.
Further naivete would be in imaging that this is not happening all the time, and that this effect is commonly exploited. "Economists" here are contemplating only static ideal cases, and implementing regulatory changes in spite of these concerns. Changing the code is changing what ultimately regulates Bitcoin.
With this particular change, it is not so easy to undo it if it turns out to be a mistake. Many Bitcoin may be destroyed. People will make mistakes of trust.
There are many new risks with SC. Lets address them rather than pretend that they don't exist.
You make many sensible comments and let me insist I am not trying to downplay the potential risks of sidechains. My problem is that most of sidechains opponents in this thread are justifying their risk-case with a proposition that involves the creation of coins booted on sidechains. To my knowledge, coins booted on sidechains are the economic equivalent of altcoins and in no way are sidecoins advantaged over altcoins. So in essence, sidecoins are not responsible for that problem and it is misguided to suggest that they are. |
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SC does not allow inflation. Altcoins allow inflation. SC does not enable altcoin.
Why is it so hard for you people to understand this
irrelevant quote  I know that you can create altcoins on top of sidechains. My argument is they don't enable them to succeed any more than traditional altcoin. And please don't bring up the "yes they will be merged mined" argument.... I would be very disappointed. |
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that's not but what is: is failing to understanding that a feature that is more valuable will have an impact. what if that value is laundering stolen coins? the arb opportunity will be 0ver 10% and there are about 1,000,000 stolen BTC out there. what if some nation state: whats to use blockchain technology, and invests a failing fiat system or there gold reserves in a SC that is inflationary but comes with demurrage if saving in a private wallet and interest when held with a CB or some other feature that appeals to the 99% that is not Bitcoin. it is a great opportunity for Bitcoiners to arb initially until the arb gap is closed. the goale here is to make Bitcoin attractive to Nation-State's note there isn't a Nation-State that should feel safe with bitcoin growing as it is. What if ? Well 1,000,000 in, laundry time, 1,000,000 laundered coin out to the main chain. Are you serious when asking these questions? Do you seriously believe that there are an incentive for someone to leave their coins on a potentially less secure Sidechain when it's only feature is to launder coin and that somehow this feature is more valuable than the whole Bitcoin mainchain? Here you go again with your GOVcoin argument  You know what's the problem with this paranoiac idea, other than paranoia itself, is that GOVcoin is... guess what? An altcoin! And altcoin, well... they already exist. Sidechains did not create altcoinsSidechains do not enable altcoins |
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and that would be to ignore what Odalv has said all along. he envisions billions. there certainly will be a lot as they are costless to implement. and why not if you can attract valuable BTC to scBTC while possibly securing MM?
Did you read through my comment or just skim through it? I'm interested in the money function of Bitcoin and its subset in sidechains. "Why not create a billion altcoins if you can attract valuable BTC to altchain while possibly securing MM". Well what do you know? We've seen that already and not much damage was caused to Bitcoin afaik. we would hope not. except with lots of miners losing money at this point, if SC's were implemented tomorrow even with a questionable innovation, speculative miners could be expected to support a speculative SC.
you really can't get it through your head heh. I will repeat it again in hope that you eventually get it. Miners can decide to merge mine any altcoin already RIGHT NOW if they find it profitable. There exists plenty of speculative ALTcoins. Evidently miners do not find any value in these speculative altcoins because they are NOT merge mining them. Now, by what kind of strech of the imagination do you propose that if SC's were implemented tomorrow, a gang of sidecoins would be created that would create any incentive for the miners to merge mine them. What is the sidecoins' value proposition for the miners that doesn't exist in current altcoins? Answer me that. a sidecoin exacerbates the problem as i see it by introducing a block reward on the SC in addition to the tx fees paid. as Bitcoin's mining reward dwindles, the inequity in payout becomes even more stark in favor of the SC. we've been through this already, why ignore us?
Again, let's compare with altcoins shall we? Altcoins introduce blockrewards in addition to tx fees paid. Why are miners not merge mining altcoins right now then? i disagree that these can ever be the only benefits that Bitcoin might ever derive from technological advancements. better security might be one. niche uses not dependent on MM are another huge source. all these have the potential to suck the life out of Bitcoin (decreased tx fees) especially when there exists this theoretical risk free put.
There is NO risk free put in the creation of issued assets on a sidechain (sidecoins). The only "risk free put" is in utility sidechains. you're still ignoring that they could take over the MC especially if the scBTC start to climb in price and we see migration to the SC over time if the innovation appears valid and useful. you've never answered my Q about how and when will the core devs be willing to integrate a new innovation into the MC? maybe the Blockstream core devs don't want that to happen out of conflict of interest?
BTC climbs in price with the realization of added value in a utility sidechain (1:1 peg). That said, if innovation in a utility sidechain appears to gain significant market traction then it will be considered whether or not it should be implemented in the mainchain. It might necessitate a hardfork and the devs might simply decide it should be left as is : a sidechain working in synergy with the mainchain. Remember that we are only considering 1:1 pegged SC. Others are simply altcoins in disguise. it is a risk in the sense that if successive innovative SC's are introduced, which is to be expected, then forcing all BTC hodlers to crack open cold wallets to migrate each time this happens would introduce all sorts of risk which i've already identified.
And that is precisely why it will not happen and sidechain will be used as UTILITY chains where coins will be sent only when their particular feature is necessary. It has been 6 years now since Bitcoin was published. Assuming it was created with sidechains, how many sidechains do your foresee would attract considerable market capital? What are their features? Is there any that would entice you to crack open your cold wallets to migrate all of you coins to it? |
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People keep talking about a peg.
As if there were such a thing.
One of these days there will be an SC with some very useful feature, but the devs used compromised cryptographic primitives, and can factor out SC private keys and run off with all the BTC that moved into that chain.
If this is done as a long enough con, it could become an existential risk to bitcoin, yes? (both the SC and Bitcoin could be essentially destroyed).
 Open source |
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I think Bitcoin proponents who are Side Chane enthusiasts will finally understand when a Side Chane takes over with less desirable qualities than Bitcoin provides its proponents today - or not, the argument that Bitcoin was an experiment due to fail anyway will still be valid.
today: It is SC allow inflation in SC tokens (currency) while backing it with and fixing the value of Bitcoin and by this means Blockstream and their future partners may secretly and unobserved, confiscate the wealth of the Bitcoiners, and not one man in a million will detect the theft. (problem is there arrant that many Bitcoiners)
you just need Fiat money to make this happen, and not a lot either, fractions of that is pumped out in the past QE (more than I have but I am not at risk of a failing Fiat system.)
This makes so little sense I don't know where to begin. A sidechain taking over Bitcoin that has less desirable qualities than Bitcoin provides? I... I just can't SC does not allow inflation. Altcoins allow inflation. SC does not enable altcoin. Why is it so hard for you people to understand this |
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...
I agree with all that you have said. Maybe I need to expand on my thoughts one last time in an effort to have you guys consider where I'm coming from. I believe that Bitcoin, as is, is the closest form of perfect money we have ever seen. Its shortcomings, or areas for improvement, in my opinion are as follow : 1. Long confirmation time 2. Privacy (anonymity) option not native as a user-defined option 3. Block size for scaling 4. Possibility that a better mining algorithm exist that could improve decentralization Aside from the obvious scaling concern, Bitcoin could very well survive as digital gold without seeing any of the improvements I have mentioned. Its fundamentals are THAT strong. For a long time I envisioned that my previous concerns would be addressed in more centralized type of schemes, or, as some would call it, through off-blockchain transactions. Now with sidechains, we are provided with the possibility to create these chains that are attached to BTC's mainchain and function in an interoperable way using BTC as their transacting unit, effectively maintaining the ledger. There, I believe, is our opportunity to create a certain number of sidechains that will work in synergy with the main chain and add considerable value to it. We do NOT need a BILLION of sidechains. I am in agreement with Adam that it is likely only a relatively small number of them will get the proper developer support and most importantly, miners support. In that regard, I think a lot of people fool themselves into thinking that because the security model proposed in the sidechains paper is merged-mining then all of the sidechains will get this benefit. This is a grave mistake and is exactly why I have been adamant in saying that altcoins booted on top of a sidechain are not, in any way whatsoever, a greater risk to Bitcoin than regular alts are. For this reason, ANY concern that has for a premise the creation of a sidecoin is irrelevant to the discussion as it is NOT enabled by the sidechain proposition. What we should be discussing and perhaps trying to poke hole in is the use of sidechains as utility features using a unit that is pegged 1:1 with BTC. This, the two-way peg, is the innovation behind the sidechain concept. Everything else has been possible before. What could these utilities be? Well allow me to return to my list of Bitcoin as money shortcomings : 1. A sidechain allowing for faster transaction times. 2. A sidechain enabling anonymous transactions My interest in this exercise is Bitcoin as money : store of value, means-of-exchange and unit of account. Traditionally we're looking for these characteristics : scarcity, divisibility, portability, verifiability, recognizability and fungibility. Now, with the proposed sidechains we improve the characteristic of portability (faster transactions) and enable the user-defined additional feature of privacy. Now cypher here argues that the anonymous sidechain creates a risk for it to potentially to take over as the mainchain. I disagree with that as I see anonymity as a niche market in this world's current settings but I can certainly envision a day where this is no longer true and everyone has a need for 100% private transactions but the day is not now and so that point is moot. Meanwhile the two markets, black and white both can work in synergy and create value for each other. The same could be said about faster transactions times. At a certain point we might have the technology to make this happen without any security tradeoff but at the moment I believe sidechains is the best decentralized way to go about it. In this setting, transactions are plentiful in all three chains and miners have an incentive to mine all three of them. The ledger is preserved and there is no dilution or loss of value Having said all of that, what exactly is the "risk created"? If it is that an innovative new sidechain makes Bitcoin obsolete then should we really call that a risk? Is it a risk to create a better form of money? Is Bitcoin a risk? I guess you could say it is but I think all of us here agree that its added value to society is worth the risk. |
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Lawsky is speaking right now, can't find a stream
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No just you having some skin in the game. Just make a big bet your attitude will change blabbing along when you think you know everything changes when you have something at stake.
I'm not trying to create a win lose proposition. Bitcoin is win win, my economic energy has been growing this idea, I've put a lot of savings on the blockchain knowing the only exit is price.
This changes everything that value can now be extracted leaving me with worthless private keys. No thanks.
Let's see you turn this around I'm selling are you buying?
I'm buying every time I have a penny loose my friend. It is tragic that a gross misunderstanding would have you sell your Bitcoins. |
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why? you already said consensus is impossible. what migration % of BTC to scBTC will force the implementation? give me a %. and at what % would it be too late?
The consensus required for a total exodus to a sidechain is the same as a hard fork. Moreover, such an implementation will not necessarily require a hard fork. sigh. then why go thru all the risk and trouble if SC's aren't going to significantly push Bitcoin forward?
They can push Bitcoin forward by enabling features that are not natively available through sidechains that work in synergy with the main one not worth the risk given the potential for SC to destroy the MC it's totally different b/c the MM helps bootstrap any SC, with or w/o altcoin. Any altcoin is able, at this very moment, to be MM with BTC and yet they're not. but you want to create SC's with altcoins which will enable this on a widespread basis? Enable this? Miners decide on whether they merge mine or not. It is not because the model to secure sidechains is merged-mining that subsequently ALL sidechains will be picked up by the miners. They will decide to mine those that are worth their time, exactly like with alts. |
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way more difficult. with fiat at least one has some guarantee and recourse. digging out cold storage wallets to transfer to the SC is inconvenient, risky, and identity revealing. how many times do i have to say this before it registers with you?
And this is exactly why it will be more convenient for the community to agree to fork the main chain with a feature that has been proven successful on a sidechain than incite a mass exodus. Brg444 I don't think you have any skin in this game. I suggests you find someone to lend you a $100K and put your money where your mouth is, buy some Bitcoin it's cheep if you're correct and it's only going up. I've been buying every dip untill the release of this paper my support has switched I'm now a net seller and will be untill there is more clarity. I don't trade on the biggest exchanges but I can tell you it's going down it's not often I see an effect like this. Your support if you can find credit will holed the price for a minute but it will help restore confidence. The gross lack of judgment says to me many Bitcoin proponents have sold out and are thinking this is a trigger. Well it's not. They sold out just in time and are now killing Bitcoin. My economic energy has enabled the wrong people the greedy.  where is this coming from? what would satisfy you? a SS of my wallet ? |
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way more difficult. with fiat at least one has some guarantee and recourse. digging out cold storage wallets to transfer to the SC is inconvenient, risky, and identity revealing. how many times do i have to say this before it registers with you?
And this is exactly why it will be more convenient for the community to agree to fork the main chain with a feature that has been proven successful on a sidechain than incite a mass exodus. |
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why? you already said consensus is impossible. what migration % of BTC to scBTC will force the implementation? give me a %. and at what % would it be too late?
The consensus required for a total exodus to a sidechain is the same as a hard fork. Moreover, such an implementation will not necessarily require a hard fork. sigh. then why go thru all the risk and trouble if SC's aren't going to significantly push Bitcoin forward?
They can push Bitcoin forward by enabling features that are not natively available through sidechains that work in synergy with the main one it's totally different b/c the MM helps bootstrap any SC, with or w/o altcoin. Any altcoin is able, at this very moment, to be MM with BTC |
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and these 1 Billion SC's will move all tx's off the MC making mining failure almost guaranteed.
how can you say that with such certainty. |
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Maybe you mean there should not necessarily be a peg? Sure, but then it becomes just another altcoin.
There simply is no peg. The SC contains bitcoin. This is not a peg, it is a conveyance. These are different things, and you ought not confuse people by equating them. It runs counter to your goals. Not true. The unit used in the SC is technically not the BTC. The BTC is not moving around the sidechain, the scBTC unit it represents is. |
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People would be buying btc and sending them to different side chains, taking btc off the market and price should go up not down because of this? What am I missing?
This is how I see it but apparently there are greater risks this is not how this will unfold... I'm not certain anymore what the concerns are since they have mutated considerably since their first incarnation |
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you are seriously twisting your argument to support your claim. who knows the future? to assume there will never be any innovation that gets added to a SC on top of a MC clone that won't make it more attractive to migrate to is asinine. that's what SC are for! and your security argument is a logical fallacy in that it is perfectly reasonable to expect that faster tx times will be achieved in the future that doesn't effect network security, point being SC's coupled with that innovation will obsolete Bitcoin.
and the whitepaper even acknowledges this migratory effect. why won't you?
I never said never. So it appears we agree on most of this. Indeed, this is in part what SC are for. So worst case scenario is new and improved Bitcoin creates a migration from the original Bitcoin blockchain. What exactly should I be concerned about here? |
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like i said above, user anonymity should be a widely sought after feature. and your security argument is a logical fallacy in that it is perfectly reasonable to expect that faster tx times will be achieved in the future that doesn't effect network security, point being SC's coupled with that innovation will obsolete Bitcoin
If it is so then it will be implemented in the mainchain you should. but how inconvenient, insecure, along with identity compromise from having to move all your BTC to a SC every few years.
As inconvenient, insecure as it was to move your fiat to BTC. Every few years? the scenario I'm proposing would need to be, in my mind, a paradigm shift of the order of fiat money/Bitcoin. I wouldn't bet on such innovation pace because as I have said previously, Bitcoin is close to as good as it gets as is. if a SC employs sidecoins/altcoins, the risk for Bitcoin is even greater than that of a simple SC alone just paying fees. miners who defect would now be getting paid not only tx fees but also block rewards on a SC that everybody has migrated to b/c of the innovation.
That's not what I'm saying. My point is the sidecoin scenario is no different than any altcoin ie. the sidechains does not enable them in any significant way. |
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Really, you ought to stop.
It is as though you are trying to convince people to hate Side Chains by making inaccurate statements one after another.
1) altscams can and do decrease BTC prices in more ways than one.
2) Consider a scan....If I introduce a SC with a hole in it, that lets me collect all the SC coin and then sell all the BTC connected to them?
There are many possible scams, only a failed one (that is an ineffective scam) might increase scarcity.
If you will allow me I will take back what I said. Foolishly I did not consider the scammer selling off the acquired BTC... I wouldn't  |
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That isn't what begs the question means.
touché! You may indeed welcome it. But others may have many reasons not to do so.
It raises the risk to the minority.
It is similar to the problem of democratic voting. One wins, one loses. If you do not agree with the majority, you lose.
So "we" in this case is a subset of "we" that may not include cypherdoc or any other particular person.
Do you see why this is not a compelling argument?
No. I don't, because any evolution in the technology of money that serves the greater good should win. "You may indeed welcome Bitcoin. But others may have many reasons not to do so. It raises the risk to the (cash) minority." Your opinion is noted. We disagree. I think it is a closer analogy to any of those you've used.
The bitcoin is contained within the SC similar to how it is contained within a physical bitcoin. The physical bitcoin offers features that are not available on the main chain. Transactions with physical bitcoin do not affect the Bitcoin block chain. Huh, asinine... ok
Is the physical bitcoin mined and profitable to the miners? Is the digital Bitcoin redeemable from the physical bitcoin at the algorithm level? Yes, asinine. Analogy aside, consider here that you are postulating that the SC features may bleed out some of the contained bitcoin to be used for TX fees and claiming that this potential feature which has never been implemented is going to happen, and so no one should have any worries about this? Not certain what you are insinuating here? Right... There is no peg. You claiming that there is one does not make it so. The SC is a container for bitcoin with different characteristics. This is not the same thing as a peg.
(a peg is not necessarily a good thing in any case)
Are you entirely certain you know what a Side Chain is? Your explanation of them makes them sound really horrible.
There is no peg But there absolutely is and should be a peg. The SC is a cointainer for bitcoin yes, but the innovation the two-way peg. 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.
Maybe you mean there should not necessarily be a peg? Sure, but then it becomes just another altcoin. |
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