A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.
From the whitepaper: However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics. As a Bitcoin holder I fail to see why I wouldn't prefer such a sidechain to one that is relying on transaction fees for mining, other than possibly ideological reasons, which I doubt will have much practical effect. Fees plus token should be more secure than fees alone, assuming any value for the token. The additional token may divert mining resources away from MC, causing MC to be less secure. Of course the additional token could bring additional mining resources into the network. if you're a small miner now on the Bitcoin MC, and a SC with all the properties of my base case (with a significant innovation such as perfect anonymity) came along (now includes a sidecoin) would you stay put or jump to the SC? in your base case, a 1:1 peg, there is no coin issuance, no block subsidy, so no incentive to jump boat |
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I unignored you for this! You are a faggot, get lost retard.
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Have you not figured it out yet bro? That is because they have a financial gain in making suckers believe that. Bitcoin isn't all its cracked up to be. I have traded thousands of coins and spent countless hours studying. Its bullshit. Brg444 is the kinda retard that laps it up. Its not about real change but personal gain.
It is/was about real change but there was too much money in play and it drifted off its intended path. It's still possible that bitcoin could get back on track but its looking more and more likely that it will be superseded by a 2.0 successor. No bro it was about get rich quick, scarcity model bullshit... same thing that has been fucking over the masses for the last 6k years at least. Not a merit based system. you are so basic |
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again, it's more complicated than a simple upgrade b/c an upgrade just involves downloading an updated client. my scenario requires a wholesale movement of all BTC to scBTC which exposes them to loss by hacking and identity exposure.
In order for there to be wholesale "movement" (I would say "exchange" or "locking" because I don't buy the notion of "moving" BTC), people would have to be adopting the sidechain, by downloading a client for it or using a web wallet or other intermediary client and using that mechanism to exhcnage/lock their BTC for scBTC. In other words, if most BTC is exchanged in that manner, then an economic majority has adopted the sidechain as a de facto replacement or upgrade for BTC. do you not agree that in the face of such a predicament, BTC main chain would simply be adapted to fit the market need (feature implementation) and remove the need for any wholesale "movement" |
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You do know that likely the biggest mining company out there, BitFury, sells industrial mining gears to other miners. I would say this qualifies as "enabling others to compete with them". They actually offer the service of building data centers and supplying mining equipment for mining operations i.e. other Bitcoin miners.
In fact, every mining companies in the ecosystem probably mine Bitcoins themselves AND sell mining gear. So your point really doesn't make any sense, at all.
So if a mining company makes a rig that is projected to generate $10,000 worth of bitcoin what do you think they will sell it for? A. $8,000 basically giving someone $2,000 because they just love people and support bitcoin. B. $10,000 because it allows them to get the $10K right away upfront locking in maximum profit right away. (This leaves the buyer $0 in profit because they paid what it was going to produce) C. $12,000 Suckers! Person buying looses $2,000 because they were overly optimistic about something. The answer is C or some form of it. KNC characterized their shift to just mining themselves as more honest.  what has this anything to do with what I said? My point is that it doesn't make sense for a company to enable others to compete with them.
this is what I replied to. if mining companies would not want others to compete with them they would not sell mining gear, not offer cloud mining service and simply keep all of that good stuff to themselves. the reality is...they don't! cause they need other revenue streams so that they don't have to sell their BTC reserve to grow their company. |
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Cloud mining contracts also qualifies as "enabling others to compete with them" or at least split the revenue pie.
...   *Your manners aren't improving, faggot. the logic is : why should they split the pie the reality is : they do learn to logic, troll |
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"the core observation is that “Bitcoin” the blockchain is conceptually independent from “bitcoin” the asset: if we had technology to support the movement of assets between blockchains, new systems could be developed which users could adopt by simply reusing the existing bitcoin currency" http://www.blockstream.com/sidechains.pdfthe basic problem is right here. separating the BTC from its blockchain will allow exploits. I consider that statement to be Marketing. As such, I'm not sure it is possible for a Marketing statement to have an exploit. BTC can only exist on the Bitcoin chain. scBTC is an alt that is backed by BTC. If scBTC defeats BTC it means an alt has defeated BTC. I don't have a problem with that, but some do, of course. precisely, in which case the BTC core would likely implement features of the apparent improved sidechain so as to mitigate the risk that exist in the exodus of the whole ecosystem |
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sure.
remember, the scBTC will start out below the BTC when first introduced. who knows, it could be close to zero, or may quickly elevate just below the BTC price. then the speculator launches the attack by pumping BTC thru the peg. at the same time, he embarks on a forum blitz saying how great the SC is and how it will take over. since these scBTC will be traded on an open exchange, the market will view a rising #scBTC and a rising price on the SC as validation of the innovation, just like you did when questioned. if i saw that happening, i'd move a large chunk of my BTC into scBTC immediately b/c i also know there's a risk free put in place. especially if the SC has been functioning bug free for a number of months. as more and more ppl make the same conclusion, the scBTC will rise even more dragging up the BTC price as arbitration sets in. but astute investors will see that the scBTC is leading the BTC price or at least rising faster. this would indicate that the SC may take over. as that happens, cold wallet hodlers are placed into a bind. either follow or risk losing value as i think miners will also make the switch to the SC b/c their fees and block rewards paid in scBTC are higher. once enough of this happens in a mass transition, i think it's logical to believe the Bitcoin will become the MM'd chain and the SC the MC. this will occur if the added innovation is valid, say like perfect anonymity.
so the incentive is to move first or risk losing value by having the MC become obsoleted.
the problem is even worse when you have an innovation that is controversial; like faster confirmation times. a speculator will pump the price until others follow, and then dump, whipsawing everybody.
that is not an incentive to create a speculative attack. basically you just reiterated your mass exodus scenario but you didn't prove why someone would want to precipitate this exodus and how it would benefit them (other than the obvious "don't be left holding the bag") |
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...
You do know that likely the biggest mining company out there, BitFury, sells industrial mining gears to other miners... I know that KNC, one of the largest companies out there, is  <== click   A fraction of one of KNC's megafarms. That's cause they moved all the consumer products to cloud mining contracts since only small fries were buying from them and small fries can't break even anymore and so don't buy much gear (especially considering KnC history of shady business in that regard) Cloud mining contracts also qualifies as "enabling others to compete with them" or at least split the revenue pie. So I win again, troll. |
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I agree, but I am honestly still having trouble wrapping my head about how BTC would react if the value of such a capped scBTC would go up because of increased scarcity of available unit on the sidechain. From my point of view arbitrage would likely balance both units price.
There is no arbitrage. Explain? You're not the only one who's gonna want to dump so of that premium priced scBTC for more Bitcoins |
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I think the difference is you are proposing a speculative sidechain which can only acquire so many users vs. a utility sidechain. The utility sidechain with no cap is expected to win over the speculative sidechain that would try to attract user with the same feature.
I'm pretty sure that in anything approximating the current cryptocurrency population, demand for speculation greatly exceeds demand for "utility." Long term you may be right, but not now (and not for a while) in my opinion. I agree, but I am honestly still having trouble wrapping my head about how BTC would react if the value of such a capped scBTC would go up because of increased scarcity of available unit on the sidechain. From my point of view arbitrage would likely balance both units price. So, yes, it might indeed create volatility but this is effectively a pump and dump scheme and just another case of buyers beware and due dilligence. Also, I'm not sure how the developer can "lock" 90% of the cap and make it appear as if these are actual BTCs locked onto this sidechain. My understanding is someone could determinate if the cap is indeed "almost reached" by investigating the blockchain. |
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i agree. focus on my scenario.
I guess this is a possible scenario but I find it highly unlikely and a fail to see exactly how the whale profits from such attack? Can you explain further? The way I see it, yes the last out the door may lose but the first in do not gain anything other than securing is stake on the new chain?
I also think the growth of BTC's market cap will eventually mitigate such an attack as what you are suggesting assumes the "attacker" a considerable % stake of the BTC market
I'd like if you could develop your idea more regarding the first part of my comment. |
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Would any sensible person put their BTC in such a capped sidechain? Why not? There is no risk (beyond the normal risk of side chain security) to doing so before the cap is reached. After the cap is reached you have the possibility of upside with downside protection. I can very much see how that might be attractive to some people. In fact, if the cap has not been reached and you have a choice between a capped and uncapped sidechain with equivalent features, why would you not choose the capped one? You have greater upside with equivalent downside. A cap would effectively prohibit users from participating in that sidechain without having to pay a premium (I think this is what you are suggesting). My opinion is someone would simply clone the sidechain and remove the cap. I think the difference is you are proposing a speculative sidechain which can only acquire so many users vs. a utility sidechain. The utility sidechain with no cap is expected to win over the speculative sidechain that would try to attract user with the same feature. |
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My point is that it doesn't make sense for a company to enable others to compete with them. The main point that mining is becoming centralized still stands, as evidenced by the link that notlambchop posted. Thanks for bringing this to my attention. This is further proof that mining will be controlled by a handful of big players in the future. You do know that likely the biggest mining company out there, BitFury, sells industrial mining gears to other miners. I would say this qualifies as "enabling others to compete with them". They actually offer the service of building data centers and supplying mining equipment for mining operations i.e. other Bitcoin miners. In fact, every mining companies in the ecosystem probably mine Bitcoins themselves AND sell mining gear. So your point really doesn't make any sense, at all. |
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- I cannot imagine how somebody can pump scBTC when exchanging them against BTC is 1:1 at the protocol level.
One example was specifically described: A nominally 1:1 side chain with a cap on the amount of BTC that can be moved to the side chain. Now imagine that the developer secretly grabs 90% of the cap before pumping the sidechain. The developer has a put that makes this a largely risk free (with my caveat about security risks). I imagine that once speculators and scammers get to work on coming up with their own variations there will be more such methods developed. Scammers are innovative when it comes to methods of scamming if nothing else. Would any sensible person put their BTC in such a capped sidechain? I don't see it. I'm also not sure how the developer could "secretly" grab 90% of the cap before pumping the sidechain. If 90% of the cap is held then I don't see any feasible way that you could create such a pump that would incite a BTC exodus. The numbers don't work. |
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this is the follow on from me beating around the bush the other day, btw.
if BTC holders and miners can be seduced to switch to the SC, full nodes might be expected to as well.
I guess this is a possible scenario but I find it highly unlikely and a fail to see exactly how the whale profits from such attack? Can you explain further? The way I see it, yes the last out the door may lose but the first in do not gain anything other than securing is stake on the new chain? I also think the growth of BTC's market cap will eventually mitigate such an attack as what you are suggesting assumes the "attacker" a considerable % stake of the BTC market |
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you touched on something i'm very worried with SC's the other day: a speculative attack.
assuming a SC failure is a long tail unlikely event as from a bug, the 2 way peg and scBTC is acting like a "risk free put". therefore a whale could pump large amts of BTC thru the peg driving up the #scBTC and eventually its price with a reasonable confidence that he won't be hurt as he could always reverse back into BTC. the problem is other BTC holders might be forced to follow for fear of the SC taking over as the mainchain and the merge mining % flipping. in other words, MM for Namecoin is about 70% that of Bitcoin currently. assuming a SC is initially MM'd, say at 60%, if a superior SC can flip this around by making Bitcoin 60% MM'd with the SC becoming the main chain, those left behind in BTC will lose value or may lose everything. the problem is that BTC holders may not be able to differentiate an unfolding superior SC from that of a Sidescam.
i see a very high likelihood of this attack that at the very least will cause volatility in the entire ecosystem. and that would be bad for the BTC and the scBTC price.
i also don't think this can be arbed away. it's reasonable to think scBTC would start off lower than BTC from being new and less secured with MM. if the whale can force this to flip with the price of scBTC rising faster than BTC at the very least this will cause volatility. some BTC holders and especially the speculators may be convinced the SC has a chance to take over and will follow encouraged by the risk free put. miners may then switch to the SC too and start MM BTC instead. yes, arb in the middle of a big picture transition can keep prices relatively equal. but if a true transition is really happening to the SC becoming dominant, the BTC price should start to drop below that of scBTC as realization sets in that BTC is going to lose and BTC itself becomes the 60% MM'd chain with the SC as the mainchain. so in essence, last out the door will lose. Just a note about this scenario. I don't believe miners switching over to the SC and MM BTC makes the SC the mainchain. Only a full exile of the nodes can do that. |
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I wonder what would happen to the gold mining companies if they tried 'hodling' their gold until it went to the moon...
gold mining companies do not have other revenue stream Gold mining companies don't sell equipment to their competitors. Why would a giant mining farm sell equipment to users to compete with them and take a cut of their profits? That makes no sense. Until you realize that they sell last-gen hardware to clueless prospectors. Are you kidding me? What exactly is your point here, you just arguing for the sake of it? I know they don't sell mining equipment to their competitors, that's why you cannot compare it with Bitcoin mining company who, in a way, do, hence why your original comparison is asinine and holds no ground. |
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consolidation of small fries != centralization they probably amount to less than 10-15% of the network hashing power so I don't see the problem try again, troll
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