Trolling trolls primarily in this particular case. Edit: What cyph's real problem is is actually kind of an interesting mystery to me at this point, but clearly from the content of his recent work he has one. It's pretty obvious and other's have noted it too.
I'm pretty sure the problem is simply ego and inability to concede the inappropriateness of his inital stance. Not so sure. Although the guy has always been 'active' shall we say, he has really bumped it up a notch for the sidechains thing. My best guess is that he invested some of his stash into a venture which is predicated on Bitcoin going the Bitcoin Foundation direction (e.g., an alt or more likely a Coinbase clone, both of which will be reamed by functional sidechains) and is in a desperate panic right about now. It wouldn't surprise me if he's flying all over the country in an attempt to ensure that he isn't the partner that takes the lions-share of the ass-reaming. The only man crush around here is you for me. No, I have no alternate investment in the space other than Bitcoin. It should be clear I simply don't believe in SC's. I think they will hurt Bitcoin and that is all I'm fighting against. |
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unfortunately, i gotta go for a few hours.
back later.
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another way to address your point is that a "theoretical" will never trump a "known".
we know MM is less secure than direct mining. we don't know that a new untested "innovation" will exactly counter weigh the value of less security.
remember a week ago when you proposed that your anonymous sidechain would be so attractive it would effectively siphon all the BTC out of the mainchain  now you are not so certain about "innovations" because they don't fit your argument ? via a speculative attack. point being, there are many scenarios here where problems could occur. |
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Increased utility has to make up for less security if someone is willing to use the SC. The price will be the same with a two way peg.
So obvious yet seemingly so hard to understand how do you know a brand new will be effective even if it is vetted by devs? only with use, time, and multiple hacking attempts will you know definitively. otoh, you know for a fact that a MM rate of say 50% that of the Bitcoin network will cause a decrease in security for the SC. the market will price that in even though you won't. so naive. |
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Bitcoin is a self contained financial system, meaning that its bitcoin are inextricably linked to its blockchain. they give each other mutual value. they only interact with the fiat system in terms of the price at the edges at exchanges or in p2p tx's.
anything that breaks this linkage potentially kills Bitcoin.
SC's break this linkage as it moves these units onto a different blockchain with a different security model and different properties.
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we really haven't focused on the ethics of what gmax and the other core devs are doing.
i know the argument goes like this; they're the brightest minds in Bitcoin who have done so much for us we should be thankful, they have "positions" in BTC so they would NEVER do anything to harm Bitcoin, they deserve it, we should WANT them to be paid, SC's are neutral and are just trying to help Bitcoin, all you skeptics "just don't get it", etc.
well, the fact of the matter is we do get it. we've flushed out alot right here in this thread. and all of this technical babble has ignored the fact that what they are doing is unethical. abusing one's privileged position as a core dev and pushing for a very specific and unique change in the source code, while simultaneously creating a for-profit company that seeks to profit off said change is unethical. i asked gmax in the AMA whether he thought he should step down as core dev due to what is to any objective person a conflict of interest. he said he thought that was "unreasonable" followed closely by LukeJr who said the same. LukeJr then launched off on a rant about how we should "want them to get paid". nice spin Luke. i don't have a problem with you starting a private company but not while taking advantage of your position. at least in the real world of banksters, there are plenty of examples where ppl step down b/c of conflicts of interest for reasons even more remotely unrelated than this. these guys don't get it. Satoshi spent at least 2 yrs of his life developing Bitcoin without being paid, so there. AND he hasn't cashed in any of his BTC that we know of to profit from Bitcoin. now that's public service for you. one might argue that should be the standard for Bitcoin. maybe we need/deserve core devs who don't have gmax or Luke's attitudes? Bitcoin has the potential to become a global currency so an argument can be made that it should be maintained for the public good. i for one think there are plenty of devs who would love to step up and replace those guys.
alarm bells should be going off in all Bitcoin holders heads right now. this isn't right even if the SC concept were valid, which i don't think it is.
It is not an abuse of position when the proposition adds considerable value to the Bitcoin ecosystem. The devs are suggesting a protocol change that benefits Bitcoin and the fact is we can expect the same out of Blockstream. Unlike what your twisted mind would like to think, their goal is not to create some kind of malicious sidechain that will take Bitcoin over and have them profit as early movers. They intend to build infrastructure on top of Bitcoin with the help of the sidechain features. I only see value added so I fail to see how unethical the situation is. the burden of proof is on you and the proponents of this change to show as close to a shadow of a doubt that what you propose is an improvement to the system and adds value. i could equally say it may destroy the system and i have given plenty of reasons why it think it could. if you want to call me twisted then i could equally call you a naive 24 yo kid. |
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I do want to ask though, does this mean you're bearish on Bitcoin now?
Why avoid this question? I really am curious. What's there to stop the Sidecoins induced fall to nothingness? ... maybe cypherdoc is spreading FUD so he can buy more BTC lower ... who knows? or maybe my explanations simply explain why the market is dropping? |
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I do want to ask though, does this mean you're bearish on Bitcoin now?
Why avoid this question? I really am curious. What's there to stop the Sidecoins induced fall to nothingness? or maybe that it will provide endless opportunities to manipulate. |
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I do want to ask though, does this mean you're bearish on Bitcoin now?
Why avoid this question? I really am curious. What's there to stop the Sidecoins induced fall to nothingness? well, there's always hope it doesn't go thru. |
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Initially we can't expect shit IMO, because the volume will be low, and that's assuming some credible exchange lists SCs. The amount that is arbed until the price gets close shouldn't be too high. I'm certain that if a credible exchange took it up and it actually had significant volume while being substantially below peg rate, despite any doubts of people with newly converted to SCs, the pressure up would be far higher than the pressure down.
Why a thousand SCs? Are people really going to flow to so many, or do you expect them to do it in series as one gets deserted after the other?
there will be thousands b/c it's just software. no real work involved. |
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No one will sell you scBTC for less than BTC.
and this is not necessarily true. remember, this is NOT an efficient peg with seamless transition back and forth btwn BTC <--> scBTC. there is at least a 2d delay. someone caught in scBTC made need to rush liquidate scBTC for less fiat on an exchange for any one of a number of reasons. and then there is shorting as Adrian alluded to earlier. |
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Well, the SCs would have reduced purchasing power. If they want their purchasing power back, they have to convert back. And like I said before, if it is easy enough to convert back, it sure beats dealing with some new and illiquid scamcoin exchanges.
no, you're missing the time element. initially, when a SC is first established, trading prices in fiat for scBTC will be lower b/c they are riding on a less secure sidechain.. we can expect this b/c of newness, less security from MM, possible failure, unproven innovation. as time goes on, and as arb bots can be confident that the SC is relatively stable and they won't lose any scBTC that they buy in arbing from a SC failure, they will enter the market to buy up scBTC (price rises) while at the same time selling BTC (price drops) until they create a new equilibrium price for both which will closely match each other but result in a lower price for BTC. multiply this by a 1000x SC's. it's kinda like the one's closest to the Fed when it first release QE into the fiat system and it's value is highest until its inflationary effects spread throughout the system. only this is in reverse. |
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if they see that they're purely burning their money.
explain |
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i think the conceptual problem many are having here is that they're tying the fiat value of scBTC to BTC b/c all they can think of is this risk free put or 2wp. that is incorrect.
the value of the scBTC, in fiat terms, is dependent on the security of the sidechain upon which they are riding at the time, which by definition we know is less secure and has different economic properties. it may only have 50% of the Bitcoin network hashing power from MM.
trying to say a new, untested "innovation" will exactly offset the discount the market will apply b/c of less security is naive. that might only be true over a given time period during which that innovation is tested.
on top of all this, this discussion is naive in that it ignores economic manipulation or speculation. even speculative attacks as i have already outline.
the peg itself takes at least 2d to contest/confirm. as we all know, the price of BTC can fluctuate 10% in a day and i'm sure the fiat value of the scBTC will do so as well. it won't be 1:1 at all times as one would have to assume perfect efficiencies/arbing in market trading which almost certainly never happens.
But all this can only increase BTC value. naive  look at the stagnating price now. it should be going up with all the good news over last 7 mo. We can create bitcoin features SC
sure. something i haven't heard addressed is how will the success or failure of the innovation be determined? brg444 said an increase in scBTC or an increase in price would be indication for him. c'mon. price is the only one factor to measure. how do the devs plan to measure success in a price volatile situation which we can certainly expect just like we see in Bitcoin? |
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No emerging SC market will have higher liquidity than the BTC markets. If there is little friction to converting BTC <> SC, then the preferable way will be to convert and sell on the BTCUSD markets, and this can only be done so many times. And of course, converting BTC > SC would serve to make Bitcoin more scarce.
if you read my simplified version earlier, i think the market will price Bitcoin + SC's in aggregate, not each independently. what you're doing in essence is moving a bunch of high valued BTC's over to a less secure SC resulting in a lower initial value for scBTC which will then be arbitraged away by pulling down the BTC price to a lower equilibrium. the "innovation" cannot be depended on initially to offset this dynamic b/c it is unproven. |
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i think the conceptual problem many are having here is that they're tying the fiat value of scBTC to BTC b/c all they can think of is this risk free put or 2wp. that is incorrect.
the value of the scBTC, in fiat terms, is dependent on the security of the sidechain upon which they are riding at the time, which by definition we know is less secure and has different economic properties. it may only have 50% of the Bitcoin network hashing power from MM.
trying to say a new, untested "innovation" will exactly offset the discount the market will apply b/c of less security is naive. that might only be true over a given time period during which that innovation is tested.
on top of all this, this discussion is naive in that it ignores economic manipulation or speculation. even speculative attacks as i have already outline.
the peg itself takes at least 2d to contest/confirm. as we all know, the price of BTC can fluctuate 10% in a day and i'm sure the fiat value of the scBTC will do so as well. the prices won't be correlated 1:1 at all times as one would have to assume perfect efficiencies/arbing in market trading which almost certainly never happens.
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we already know from your paper that there will be at least a delay due to the contest/confirmation time. also, the SPV proof is untested, unless you want to claim it's perfect right here and now, which would be foolish. these factors alone will ensure that there is a difference btwn the BTC and scBTC.
You first must burn bitcoins into SC. So if you burn 10M of 13M BTC then the rest 3M BTC will increase in scarcity drastically. (3.25 times more scarce) Then if scBTC will become worthless and tokens inaccessible then all value(market cap, not tokens) will be returned to BTC. THAT will definitely not happen. otherwise, the scBTC will be transferred back to BTC almost immediately. or in fact, they would never move at all. let me put it in simple terms w/o numbers.
you're taking a chunk of coin off a very secure ledger and moving them over to a less secure ledger. it's to be expected those coins moved will be worth less b/c they are now less secure.
b/c of arbitrage, you can expect the moved coin to drag down the price of the not moved coin to a lower equilibrium.
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I hugely disagree with the belief that sidechains will decrease the value of Bitcoin. Having more uses for the Bitcoin blockchain will almost certainly increase its value, rather than decreasing it.
and i hugely disagree. you would have to know ahead of time that the SC innovation would at least offset the known decrease in security of the SC due to MM exactly to get a full value transfer from BTC to scBTC in terms of fiat. |
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I read it but I feel like I'm missing something: its a 2 way peg, so both BTC and scBTC can move freely back and forth. Can you elaborate? How are the both to be pegged? How is the peg rate determined, and does it float? Since you are free to move coins between BTC and scBTC, the price will be the same. You don't sell scBTC for a lower price when you can transfer it back to BTC and sell it for the full price. 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 we already know from your paper that there will be at least a delay (2d?) due to the contest/confirmation time. also, the SPV proof is untested, unless you want to claim it's perfect/unhackable right here and now, which would be foolish. these factors alone will ensure that there is a difference btwn the BTC and scBTC fiat price. its not an instantaneous transfer. |
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- snip - one of many desperate lines of FUD -
... I keep thinking I'm missing something obvious, because this seems a ridiculous train of thought from you. Is the bear market getting to you?  Something is making the guy soil himself multiple times per day. Probably being wrong for nearly a year is contributing as stress, but it doesn't really help shed light on the root cause of his malady. That's insulting. I've outline why SC will leach value out of Bitcoin and the most viable argument against my point is exchanging value on a side chain. I.e. using side chains as money is using Bitcoin. It's not no Bitcoin TX fees are paid and the value created by the network effect reside on the SC. There is no 1:1 peg guarantee. If the SC is inflationary and appeals to a central bank more than Bitcoin they'll use that not BTC. And the minority who want BTC hard money will be eaten for breakfast. the guy is not known for his manners. in fact, if i say one thing, you can be guaranteed he'll just say the opposite to disagree. |
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