I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins,
A simpler version of this is described in the paper. Simply pay miners in a new altcoin that is distinct and can't be used to unlock Bitcoins at all. But still tradeable and valuable if has demand and scarcity. You then have the benefit of two different types of coins on the same chain and can do atomic cross-coin trades easily without the need for slower and more complicated cross-chain trades. Anyone who thinks this won't spawn a new explosion of altcoins is delusional. yep In fact, just thinking out loud here, you could create demand (and therefore value) for such a coin by requiring payment of a fee in SideCoin to perform the transaction that will unlock real BTC. Such a transaction could burn the fee, increasing scarcity and value, which incentivizes more mining making the side chain more secure. There are just so many combinations of crazy ideas, some blatant scams and pozni schemes, some less obviously so. This "altcoin killing" technology will create more altcoins than ever. the paper is so light on details. I've always assumed a merge miner has to mine the tx that unlocks the original btc. But do they have to be paid in SideCoin or can it be bitcoin? It would make sense to be sidecoin. |
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I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins,
A simpler version of this is described in the paper. Simply pay miners in a new altcoin that is distinct and can't be used to unlock Bitcoins at all. But still tradeable and valuable if has demand and scarcity. You then have the benefit of two different types of coins on the same chain and can do atomic cross-coin trades easily without the need for slower and more complicated cross-chain trades. Anyone who thinks this won't spawn a new explosion of altcoins is delusional. yep In fact, just thinking out loud here, you could create demand (and therefore value) for such a coin by requiring payment of a fee in SideCoin to perform the transaction that will unlock real BTC. Such a transaction could burn the fee, increasing scarcity and value, which incentivizes more mining making the side chain more secure. There are just so many combinations of crazy ideas, some blatant scams and pozni schemes, some less obviously so. This "altcoin killing" technology will create more altcoins than ever. yes, I'm seeing lots of comments from altcoin people asking how to use SC's to hitch their altcoins into the bitcoin network. That's just swell. Why are we doing this again? |
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Who here has interpreted the SC paper to mean that you can get your BTC back from scBTC in the case of a SC failure?
I don't interpret it that way. Before you can get your BTC back, you've got to perform burn transaction on the sidechain. So if the sidechain ceases to function entirely, you have no way to generate the SPV proof that lets you claim your BTC. Atomic swaps allow transfer to happen without waiting on the peg... a result of this means that a single 2wp transfer can basically exit all the people at once.
It does effectively mean that a sidechain abandoned by miners may end up costing more in transaction fees to exit than you'd like. The situation is much brighter than being left with altcoins no one wants, and also ignores the possible (likely?) existance of altruistic miners that continue to mine along just because.
But if some implementation of SC (I do not think SC as idea) become scam or there is a bug then bitcoins may be lost. So in your opinion, does this mean everyone can get their BTC back in the event of a SC failure with just a larger tx fee? It is very complex to answer. SideChain can be created in many ways (but obviously you do want to accept this fact) SideChain(IDEA) is "concept?" what describes your Bitcoin transaction off the main chain (transaction are not recorded in bitcoin blockchain). One example of sidechain is bitcoin-exchange (one of them is Bitstamp). Bitstamp exists, and Bitstamp creates off-chain bitcoin transaction.(buys/sells bitcoins) In term of SideChain(IDEA) it is centralized and ONE ENTITY controlled sidechain. -> It exists now. - you can lock your bitcoins in bitstamp controlled address and trade - Bitstamp is only miner who creates blockchain (history of trades) . Bitstamp mine transactions -> (who sold/bought, add-to-order-book, market-buy/sell, ... and so on) and Bitstamp publish orderbook. - and only Bitstamp can unlock your bitcoin (bitstampBTC) Bitstamp is two-way-peg SC with 1:1 exchange rate and ONE ENTITY controlled sidechain == Blockstream paper describes how to create different SideChain - one of them is Federated peg (M of N entities controlled sidechain) -> it can be created without changes to bitcoin protocol now. - I think, it is better than centralized one == and finally few variants how to create decentralized ( not supported by bitcoin now) == this decentralized SC can be even combined with (M of N SC's) or (Single Entity SC) in case there is not enough mining power => The questions is IF/HOW add decentralized SC's. you didn't answer my question. From what Maxwell said, it sounds like he said he would be able to get everyone's BTC unlocked in case of a failure of SC. |
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I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins,
A simpler version of this is described in the paper. Simply pay miners in a new altcoin that is distinct and can't be used to unlock Bitcoins at all. But still tradeable and valuable if has demand and scarcity. You then have the benefit of two different types of coins on the same chain and can do atomic cross-coin trades easily without the need for slower and more complicated cross-chain trades. Anyone who thinks this won't spawn a new explosion of altcoins is delusional. yep |
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Who here has interpreted the SC paper to mean that you can get your BTC back from scBTC in the case of a SC failure?
I don't interpret it that way. Before you can get your BTC back, you've got to perform burn transaction on the sidechain. So if the sidechain ceases to function entirely, you have no way to generate the SPV proof that lets you claim your BTC. Atomic swaps allow transfer to happen without waiting on the peg... a result of this means that a single 2wp transfer can basically exit all the people at once.
It does effectively mean that a sidechain abandoned by miners may end up costing more in transaction fees to exit than you'd like. The situation is much brighter than being left with altcoins no one wants, and also ignores the possible (likely?) existance of altruistic miners that continue to mine along just because.
But if some implementation of SC (I do not think SC as idea) become scam or there is a bug then bitcoins may be lost. So in your opinion, does this mean everyone can get their BTC back in the event of a SC failure with just a larger tx fee? |
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You can't pay for mining with BTC.
Not sure I understand this part... If you do a straight 1:1 peg you don't need mining of the sidechain right? The movement of assets between that chain is basically fit into transactions that goes into BTC blocks is it not? As for the rest, they're free to do whatever they want, but I find I have every reason to have a BTC bias. wtf? Your lucky I'm on planes and on my android otherwise id rip you apart. And you're the resident shill? Of course the sc needs mining. In fact, initially it would be merge mining if its lucky. There's been plenty discussion and skepticism this will even occur due to the insecurities. |
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Perhaps cypher's concern is that everyone moves their BTC over to the sidechain, then the sidechain fails in such a way that it's not possible to reconvert them to BTC, and the whole Bitcoin ledger is destroyed.
To fully comprehend whether this is a concern requires some terminological cleanup. I think there's a basic misguided focus in the term "sidechain." It's not the chain but the peg that matters.
Imagine if Counterparty had delayed their launch a year. Instead of proof of burn where provably destroying 1 BTC gave you 1200 XCP, they set up a 2-way peg where locking 1 BTC gives you access to 1200 XCP (and the reverse: locking 1200 XCP gives you access to 1 BTC) in perpetuity. Why does that make XCP a "sidechain," whereas proof of burn makes it an "altcoin"? The key thing that's happening is some assets are being pegged to bitcoins. Insofar as the market was confident that you could always very easily convert between the two, forever, at 1 BTC = 1200 XCP, the price of 1200 XCP should be very close to 1 BTC. If someone sent you 1200 XCP, after all, you could easily convert them to 1 BTC and sell them for the same amount of dollars as if you had held 1 BTC from the start (and vice versa).
Now let's suppose everyone but you converted their BTC to XCP. You are the last BTC holder. Assuming convertibility remains, miners would still mine BTC for the block reward - since they could simply convert to XCP and sell for fiat. And you could still convert at any time. Theoretically your investment would never be at risk and you would only stand to gain if XCP were better since the value of XCP - and hence to the same degree BTC - would rise.
One might even conceive that it's possible to do this without a protocol change, just using timelocks and one chain as the other's oracle. In the example, a kind of smart contract in Counterparty that issues you 1200 XCP when the oracle (trustless data directly from the Bitcoin blockchain) says that 1 BTC has been locked in a certain way, and similar smart contract in Bitcoin being set up simultaneously that unlocks the 1 BTC when the oracle (data directly from Counterparty's system) says that 1200 XCP has been locked in a certain way.
If it were done that way, it would look a lot more benign, but it may be the same in effect. Or it may not. But it's important to characterize the proponents' side correctly first in order to properly argue about any possible dangerous edge cases and have those arguments be understood by the proponents.
let him (brg444) answer since he's the resident shill. |
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ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not? for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid?
second question, would transfer of a "significant number" of BTC to scBTC mean anything to you?
Correct, stability in their correlation could be one indication of a well designed and useful application. As for your second question, I'm sorry but this is too early to answer considering I have no practical example to consider. Of course, I would be extremely careful in considering the transfer of a significant amount of BTC to scBTC to as I have stated above this is the same approach I would take with an altcoin. If the particular sidechain gains traction, offers a particularly interesting use case and has properly implemented code that is vetted by the community, is safe and protected from any malicious intent then if need be I could eventually feel safe doing so. Like all things BTC, it is a matter of trust. and you may not have the luxury of a practical example. for instance, one of the first SC's i'd expect to pop up is a SC with perfect anonymity added as an innovation to a simple fork of Bitcoin with no initial coins and a 1:1 peg in place to accept incoming transfers of BTC to scBTC. the question for you is, what if you saw significant #'s of BTC start moving into scBTC, what would you conclude? I would conclude the market has voted in favor of such a sidechain and with time, would feel comfortable using it? Where are you trying to lead me? Stop beating around the bush wonderful. so we (you) have concluded that a rise in the price of scBTC relative to BTC AND a movement of significant #'s of BTC into scBTC would be validation that a SC is working. so, remember that the working example here is one where we have a Bitcoin fork plus perfect anonymity added on top as an innovation. i believe the vast majority of BTC holders value anonymity. therefore perfect anonymity should be better than pseudonymity. since that's the case, why wouldn't you then move ALL your BTC into scBTC? |
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i disagree.
when Satoshi created Bitcoin, a BTC was worth $0. there was literally nothing to warn us about.
when Maxwell proposes a technical change to the source code of a market worth $5 Billion, i think he should be expected has a duty to warn us of all possibilities, negative or not.
you and i may be able to distinguish what's going on here in terms of a potential SC failure, but certainly the avg investor might not be. and simply b/c there will be a market price for scBTC, one can assume uneducated investors will be tempted to buy them on an exchange.
Fair enough. Although I don't see exactly how the danger differs much from altcoins. I also fail to see how GMaxwell warning the community of the dangers of sidechain scam will stop scammers from creating them and suckers from investing.. but yes maybe they should have been more straightforward regarding this possibility. thank you. Maxwell has great standing within the community. if the community were to listen to anyone, they would to him. an open and honest warning from him would go a long way to helping us justify his desire to profit from the entire SC proposal. anything less than that justifies guys like me talking. and of course, scammers are going to be creating SC's left & right with a variety of deterministic pegs which invalidates the claim that SC's will somehow kill off altscams. |
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ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not? for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid?
second question, would transfer of a "significant number" of BTC to scBTC mean anything to you?
Correct, stability in their correlation could be one indication of a well designed and useful application. As for your second question, I'm sorry but this is too early to answer considering I have no practical example to consider. Of course, I would be extremely careful in considering the transfer of a significant amount of BTC to scBTC to as I have stated above this is the same approach I would take with an altcoin. If the particular sidechain gains traction, offers a particularly interesting use case and has properly implemented code that is vetted by the community, is safe and protected from any malicious intent then if need be I could eventually feel safe doing so. Like all things BTC, it is a matter of trust. and you may not have the luxury of a practical example. for instance, one of the first SC's i'd expect to pop up is a SC with perfect anonymity added as an innovation to a simple fork of Bitcoin with no initial coins and a 1:1 peg in place to accept incoming transfers of BTC to scBTC. the question for you is, what if you saw significant #'s of BTC start moving into scBTC, what would you conclude? |
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You are being really disingenous again.
Did Satoshi warn about the dangers of altscams in the Bitcoin white paper?
and you're just being a shill again trying to discredit anyone who is asking good questions. what does Satoshi have to do with what i would believe to be an expected disclaimer warning to moving one's BTC to a SC? If you return to the AMA I believe there is one instance of one of the devs essentially recognizing the possibility of malicious implementations of sidechains. My point is this should be obvious to most that are even considering the technology of sidechain at this stage. A fool and his money are soon parted, whether it's in BTC, sBTC or altscam. There is no reason for Gmaxwell to specifically go out of his way to *disclaim* the possibility of malicious uses of sidechains. It'd just be a gift from suckers investing in unstable sidechain schemes to the rest of the bitcoin holders. Same as Counterparty's burning of bitcoins for XCP, except with Counterparty it was known that there was no way to get the coins back in the first place.
exactly i disagree. when Satoshi created Bitcoin, a BTC was worth $0. there was literally nothing to warn us about. when Maxwell proposes a technical change to the source code of a market worth $5 Billion, i think he should be expected has a duty to warn us of all possibilities, negative or not. you and i may be able to distinguish what's going on here in terms of a potential SC failure, but certainly the avg investor might not be. and simply b/c there will be a market price for scBTC, one can assume uneducated investors will be tempted to buy them on an exchange. |
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It seems we are again challenging our ideas of sidechains.
what's happening is again you're not understanding my questions. presumably these scBTC will have a market price on an exchange, just like BTC. so i ask again, would the price of scBTC on an independent exchange affect your assessment of how well the SC with its innovation is working? no, what's happening is you don't understand the tech. presumably, these scBTC if pegged 1:1 and properly implemented would have a market price closely correlated to BTC's from the jump. the price of BTC units on a sidechain is not dependent on whether the innovation is working or not i do understand the tech. it's you who do not understand the economics. it's perfectly reasonable to expect the price to differ in certain circumstances even in the presence of arbitrage. well then if you do understand this I will say yes, of course, the correlation between market exchange rate and technical conversion rate will be considered in my review of sidechains. I fail to see the point of that question though considering the obvious answer. ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not? for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid? second question, would transfer of a "significant number" of BTC to scBTC mean anything to you? |
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It seems we are again challenging our ideas of sidechains.
what's happening is again you're not understanding my questions. presumably these scBTC will have a market price on an exchange, just like BTC. so i ask again, would the price of scBTC on an independent exchange affect your assessment of how well the SC with its innovation is working? no, what's happening is you don't understand the tech. presumably, these scBTC if pegged 1:1 and properly implemented would have a market price closely correlated to BTC's from the jump. the price of BTC units on a sidechain is not dependent on whether the innovation is working or not i do understand the tech. it's you who do not understand the economics. it's perfectly reasonable to expect the price to differ in certain circumstances even in the presence of arbitrage. |
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You are being really disingenous again.
Did Satoshi warn about the dangers of altscams in the Bitcoin white paper?
and you're just being a shill again trying to discredit anyone who is asking good questions. what does Satoshi have to do with what i would believe to be an expected disclaimer warning to moving one's BTC to a SC? |
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It seems we are again challenging our ideas of sidechains.
what's happening is again you're not understanding my questions. presumably these scBTC will have a market price on an exchange, just like BTC. so i ask again, would the price of scBTC on an independent exchange affect your assessment of how well the SC with its innovation is working? |
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Maybe because it's relatively obvious (depending on implementation.)
it's not obvious given my reading of the paper. maybe to you and me, but not the average person. why shouldn't i expect the "obvious" to be expressed as a warning in the paper? |
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brg444, do you agree with JR that a SC failure can occur taking scbtc with it and thus btc too?
taking scBTC sure. if by "thus btc too" you mean the bitcoins attached to it then yes I agree also that it is possible. but taking Bitcoin down with it? I wouldn't go there and why don't I see Maxwell warning us of that? |
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brg444, do you agree with JR that a SC failure can occur taking scbtc with it and thus btc too?
And if so why hasn't Maxwell warned us of this?
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what specifically would have to happen to get you to move a significant number of your btc over to the sc?
once the sidechains technology has matured enough and has been vetted by different, independent, reviewers much like Bitcoin, when it has been made clear that the *open-source* code of the sidechain is safe and sound then I see no reason to be concerned with sidechain failure. would a stable or rising price for scbtc enter into that assessment? |
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Who here has interpreted the SC paper to mean that you can get your BTC back from scBTC in the case of a SC failure?
I have as long as one is careful to choose a well implemented and managed sidechain and one stays on the ball. I personally would put only the value on sidechains that I could afford to lose. This value would grow with time as the sidechains solution and the various implementations of it mature. I would always only risk any value on a sidechain which could not fail in a way where someone else would end up with my BTC. A failure mode would have to result in a total loss else I am utterly un-interested in playing. My calculations are indeed very close to how I play Bitcoin itself. what specifically would have to happen to get you to move a significant number of your btc over to the sc? |
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