(with sufficient confidence to justify the inconvenience you describe)
this is what it comes down to if you ask me. if the innovation and the backing of this new sidecoin is so important the value proposition outweight ALL of the risks involved with such a migration than what the hell let's do it. but remember cypherdoc, you have said it yourself, there are numerous and considerable risks and friction in such a movement why are you arguing against a conclusion that paper itself talked about, that being a migration to a new SC? |
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I consider another flaw in your argument to be your casual dismissal of the force of arbitrage.
IF the whale has indeed identified a SC with a true innovation, he's in good shape jumping in first. as everyone starts following, including miners willing to primarily mine the SC for its sidecoin and scBTC, Bitcoin MC could become MM'd and thus weaker from a security standpoint. if that happens, the BTC price could be expected to drop below the scBTC price as the situation has now flipped from what it was prior to the SC takeover. that's where the stragglers could get caught on the MC as 51% attacks could be levied to block SPV proof formation. |
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well then, here's a thought argument.
let's say those 2 factors balance each other out exactly, ie, half of BTC holders convert BTC to scBTC while the other half stay put and half the miners currently mining BTC switch to primarily mining scBTC. in that case, then i say the Bitcoin MC still loses. which is really the risk i'm trying to identify, that being any damage a SC might inflict on Bitcoin MC. it loses b/c the SC has succeeded in weakening Bitcoin's security by 50% subjecting it to possible 51% attacks and volatility (which will happen if any weakness in Bitcoin itself is detected by the market). as volatility picks up, the price will drop.
not true. using your base case. you have now essentially created two liquidity market. a transparent ann a private one. these are the only two markets that can work in synergy. both could thrive without effectively damaging the other. as long as people find value in transparence and in privacy and there will be a market for both such market. I actually believe this is something that could very plausibly happen. there are a lot of speculators that can be sold an innovation that really isn't one. such as demurrage coin everyone keeps talking about. you might not think it's a good innovation but if all of a sudden you start seeing large #'s of scBTC appearing on its SC along with a rising price, you yourself said those would be indications of a succeeding SC. that would be all it takes for some other speculators to pile on. and in this case, where an innovation is marginal if not a bad idea, the original pumping whale might just do a pump and dump. |
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(with sufficient confidence to justify the inconvenience you describe)
this is what it comes down to if you ask me. if the innovation and the backing of this new sidecoin is so important the value proposition outweight ALL of the risks involved with such a migration than what the hell let's do it. but remember cypherdoc, you have said it yourself, there are numerous and considerable risks and friction in such a movement well then, here's a thought argument. let's say those 2 factors balance each other out exactly, ie, half of BTC holders convert BTC to scBTC while the other half stay put and half the miners currently mining BTC switch to primarily mining scBTC. in that case, then i say the Bitcoin MC still loses. which is really the risk i'm trying to identify, that being any damage a SC might inflict on Bitcoin MC. it loses b/c the SC has succeeded in weakening Bitcoin's security by 50% subjecting it to possible 51% attacks and volatility (which will happen if any weakness in Bitcoin itself is detected by the market). as volatility picks up, the price will drop. |
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They will not unless they have an incentive to do so.
you're failing to read my posts. small miners struggling to mine BTC right now mainly at a loss would gladly switch to a SC that is producing cheap sidecoins in the hope of scooping up large #'s of sidecoin w/o competition while hoping for price appreciation if they see the same things you said would result in a price rise of scBTC, that being an increasing #scBTC's appearing on the SC (from the whale pump) along with a rise in the price of those same scBTC from speculative buying on an exchange AND an innovation. remember, the SC is designed to be superior. all i'm talking about is a natural fulfillment of that superiority. |
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Or maybe not. I've recently seen the claim that risks introduced by the apparent progress toward side chains actually being implemented are behind the BTC price weakness. I don't buy it, but interesting theory.
well, i said that the day the paper came out and the price tanked. i believe it IS related as SC's introduce considerable uncertainty into Bitcoin as in allowing a for profit company composed of several of its core devs make a change in what was supposed to be an open source consensus based source code that shouldn't favor any specific interested group, major contributors or not. how does any blockchain do this? You can certainly have two or more different types of coins on one chain, side chain or otherwise. well there you go. |
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Remember your "new" base case is one where there is now a sidechain block subsidy with issuance of new assets. these are not secured by the proposed merged mining.
Yes they are. These secondary tokens will be an additional reward when SC blocks are mined. These tokens will reside on the same chain as the pegged assets. how does any blockchain do this? |
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if Blockstream is successful at convincing mining pools to freely merge mining from the beginning, the SC can function securely while cultivating the innovation. once proven stable, if i were a whale, i'd go for the pump knowing i have a risk free put.
Are you confused  I'm tired of going in circles with you  Remember your "new" base case is one where there is now a sidechain block subsidy with issuance of new assets. these are not secured by the proposed merged mining. The other problem with this new twist to your "base case" is it brings a very concerning security risk. Do not fool yourself. Leaving the BTC main chain for a sidechain securing its own issued asset is NOT a "risk free put" i see what you're saying now. the SC has to mine the sidecoin or the scBTC, not both at the same time? good point. but didn't the paper say that multiple assets could be secured on the same SC at the same time? wtf? |
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The other problem with this new twist to your "base case" is it brings a very concerning security risk. Do not fool yourself. Leaving the BTC main chain for a sidechain securing its own issued asset is NOT a "risk free put"
Logical, you trade risk for benefit. but it's not even a risk once you've determined the SC is stable and not susceptible to a frank bug . and that's b/c of the 2 way peg, ie, a risk free put ripe for exploitation. |
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if Blockstream is successful at convincing mining pools to freely merge mining from the beginning, the SC can function securely while cultivating the innovation. once proven stable, if i were a whale, i'd go for the pump knowing i have a risk free put.
Are you confused I'm tired of going in circles with you Remember your "new" base case is one where there is now a sidechain block subsidy with issuance of new assets. these are not secured by the proposed merged mining. do you even understand merge mining? it can be used to secure a chain with or w/o the creation of new sidecoins. look at Namecoin generation: MM'd by Bitcoin miners. look at Dogecoin generation: MM'd by LTC miners.
The other problem with this new twist to your "base case" is it brings a very concerning security risk. Do not fool yourself. Leaving the BTC main chain for a sidechain securing its own issued asset is NOT a "risk free put"
the risk free put is only for BTC converted to scBTC, which is precisely what the whale will be pumping thru the peg. that's what matters. |
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not at all. the real key is that a SC will be a nascent currency plus an innovation with plenty of potential. a whale could easily jerk the price upwards and then get follow on from other whales or speculators willing to be the new early adopters of a "better" currency.
Why have they not done it with an alt-coin then b/c they want free merge mining from Bitcoin miners to get started. Much like smooth has indicated, you worst case scenario is quite literally an alt-coin taking over.
Sidechain didn't create that problem. No you farfetched "risk-free put" is not a valid argument, it is full of holes.
feel free to point them out then with logical arguments instead of crying FUD. The only risk-free position is on the BTC mainchain.
At this point the only risk we witness a migration of the kind you suggest is if the destination is considered by the market to be as secure as BTC and offering an innovation so important the value proposition is too large to ignore. It is terribly naive to believe a "whale" could ignite such a movement.
if Blockstream is successful at convincing mining pools to freely merge mining from the beginning, the SC can function securely while cultivating the innovation. once proven stable, if i were a whale, i'd go for the pump knowing i have a risk free put. I don't think there is any predicament at all. If the side chain is objectively a better chain as determined by stakeholders, then it is simply time to move on. There is not necessarily any reason try to try to backport everything to the original chain. BTC will have fulfilled its useful purpose of giving birth to the improved scBTC/BTC2.
you know what, it turns out I agree with this 100% and this is another reality for which cypherdoc has no answer lol. what? smooth just verified my point. if a SC proves superior, everyone will indeed move over to it. now, i for one, think that will be quite disruptive if we have to break out our cold storage wallet everytime a new innovation comes along forcing us to move to a new SC. that will introduce all sorts of security and identity risks, not to mention volatility. btw, you're the one who concluded that an appearance of scBTC on a SC would cause a price rise and be indicative of a successful innovation. and you didn't answer my question; are you associated with Blockstream in any way? |
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and i'm impressed at what an idiot you are continuing to shill for SC's and your willingness to bury your head in the sand.
and why and how did you just happen to pop here on the day the SC paper was released specifically countering my every point and trying to denigrate my position by pointing to the Reddit AMA despite the clear and positive/upvote point count i got? one might think you're associated with them in some way.
in case you hadn't noticed, all of us here are trying to seek the truth despite your presence.
please don't start lieing through your teeths. I have read every single posts from that AMA and your posts were hanging in the sewers of most sub-topics and casually dismissed when engaged by the sidechain developers you are a fear mongerer who tries to stand on arguments that hold no ground and scenarios from fairy tales. are you associated with their company in any way? |
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and i'm impressed at what an idiot you are continuing to shill for SC's and your willingness to bury your head in the sand.
and why and how did you just happen to pop here on the day the SC paper was released specifically countering my every point and trying to denigrate my position by pointing to the Reddit AMA despite the clear and positive/upvote point count i got? one might think you're associated with them in some way.
in case you hadn't noticed, all of us here are trying to seek the truth despite your presence.
please don't start lieing through your teeths. I have read every single posts from that AMA and your posts were hanging in the sewers of most sub-topics and casually dismissed when engaged by the sidechain developers you are a fear mongerer who tries to stand on arguments that hold no ground and scenarios from fairy tales. you seem quite threatened. i suppose one could say the same for me but i'm not the one trying to change the system for a new for profit company i'm participating in. |
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go back and read my comments from today about this. there seems to be several reasons for a BTC holder to jump to scBTC immediately once a whale starts pumping thru the peg and the price starts rising.
you do realise everyday the economy grows your whale scenario becomes less and less likely not at all. the real key is that a SC will be a nascent currency plus an innovation with plenty of potential. a whale could easily jerk the price upwards and then get follow on from other whales or speculators willing to be the new early adopters of a "better" currency. |
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i just changed my base case according to a helpful comment from HB. so what? it doesn't invalidate the rest of my arguments.
oh nothing, just pointing you moving goal post again. i'm impressed how your imagination can strech to such length to try and poke hole into sidechains. it reminds of reading logs of the forum thread where satoshi first posted the paper. and i'm impressed at what an idiot you are continuing to shill for SC's and your willingness to bury your head in the sand. and why and how did you just happen to pop here on the day the SC paper was released specifically countering my every point and trying to denigrate my position by pointing to the Reddit AMA despite the clear and positive/upvote point count i got? one might think you're associated with them in some way. in case you hadn't noticed, all of us here are trying to seek the truth despite your presence. |
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in your base case, a 1:1 peg, there is no coin issuance, no block subsidy, so no incentive to jump boat
Transactions will happen on the sidechain and can charge tx fees, all of which are able to be converted right back to BTC if wanted. The only incentive to jump boat would be to use a feature. go back and read my comments from today about this. there seems to be several reasons for a BTC holder to jump to scBTC immediately once a whale starts pumping thru the peg and the price starts rising. don't forget other speculators who just want to use their fiat on an exchange to buy (pile on) a rising asset (scBTC) with significant growth potential. |
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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 i just changed my base case according to a helpful comment from HB. so what? it doesn't invalidate the rest of my arguments. |
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you know, it just occurred to me that when Austin Hill goes around to all the mining pools and mines and tries to convince them to MM all his SC's, he's introducing a market distortion.
in other words, he's attempting to get something for nothing.
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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? |
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A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.
that is the underlying assumption in my base case. |
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