Maybe you could address directly what it is that I have wrong....
Not with the time constraints I'm under right now. Maybe by the time part 6 of that series is finished you'll have your answer. Even better, email Daniel about joining the Hangout so that you can ask questions directly. |
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Instead of fearing what sidechains might do to bitcoin's value proposition, let's take a look at what is broken and how sidechains could help. What has been the lesson of software monoculture time and time again? Software monoculture increases the attack potential by ensuring high value for any found bugs/attacks. This is right in line with the reasons for decentralization in the first place. Worse than at a software level (which is actually fairly diverse and getting better), Bitcoin relying on one public key curve with a single set of parameters, with one single hashing algorithm used for mining is a disaster looking for a place to happen. Sidechains would allow for innovative new ways of locking and unlocking coins according to more complex scripts, without exposing bitcoin itself to a turing complete scripting system. Bitcoin miners merely have to check that you have an SPV proof that goes back to the hash you provided when locked the coins and allow time for someone to contest it with a higher value SPV proof. The sidechain itself can implement different cryptography, time locking with m-of-n early release capability, smart contracts, or many other possible innovations. Bitcoin will remain the backbone value and transactional network, while we will be able to use our bitcoins in new and exciting ways without needing to resort to centralized services to implement these features for us.
Enough FUD, if you're that insecure about your bitcoin position, I suggest you sell. Sidechains can't be stopped anyway... Even if the majority of miners refuse, it can be implemented by replacing a NO_OP, so the blocks will still be valid, just not standard. It will just drive up transaction fees, which will give the miners who do support sidechains a premium.
I don't think this is the best way to fix the broken bitcoin protocol development process. It's a bandaid at best. There is no inherent reason that adding signature algorithms shouldn't be in a release plan with other planned upgrades. The real problem is the lack of credibility associated with the reference client developers. None of them are enjoy enough community trust in terms of software engineering capabilities and also philosophical direction. Side chains do not fix this problem. |
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Then Bitcoin becomes the central clearing house, reserve & store of value chain while other chains are left to operate daily transactions for better efficiency.
People have been proposing this very idea for awhile but assumed the transactions would be handled off-chain by semi-centralized entities. People have been proposing this because they are economically ignorant. There is no such thing as intrinsic value. Currencies only have value if people use them, so there is no way for Bitcoin to have behave as a store of value in the long term except as a direct consequence of its use as a medium of exchange. Before you start talking about gold - no, it won't work that way. Prior to central banks, gold behaved as a store of value because it was used as a medium of exchange. After central banks, gold behaved as a store of value because of taxation. Bitcoin could never survive as a high-fee settlement currency because high fees would arise due to block size rationing, not because transactions should naturally cost that much for technical reasons. Bitcoin would lose out to a competing currency with less/no rationing that would be less expensive to use for settlements. High transaction rates on the main chain are the only way for Bitcoin to survive. Yes, getting there is a difficult technical problem to solve. Deal with it. |
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Basic theory suggests that mining will always become unprofitable no matter what the various magnitudes of various parameters. We've seen in practice that this theory seems correct. What kind of sucks about this is that the value spikes have created conditions for more sha256 hashing power to develop than can be comfortably supported by transaction fees. At least when Bitcoin is used for buying trinkets.
The problem with this is that it could make economic sense for miners to attack Bitcoin, and this is particularly the case if they are going to throw in the towel on Bitcoin and consider their gear to be a write-off. Some combination of economics and corp/gov coercion could provoke such a decision.
Two things which could help offset this threat would be:
1) increase fees to increase the reward for properly supporting Bitcoin.
2) provide a profitable outlet for the hashing power in such a way that supports Bitcoin rather than considers it dead.
3) break mining pools into smaller pieces with more focused goals and in doing so reduce the potential for consolidated strategies to be implemented.
Sidechains seem to me to have the potential to promote all three of these desirable outcomes. The problem isn't that Bitcoin is used for buying trinkets - the problem is that Bitcoin isn't being used enough for buying trinkets. The economics of mining are going to stay fucked up until the transaction rate grows about three orders of magnitude. We just have to find a way to get from here to that point - after that it will take care of itself. |
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furthermore, NO ONE fights for Bitcoin's ultimate success harder than i do.
I'd like to submit my application for this position.
And for the last time I don't give a fuck about Bitcoin's legal status, and neither should anyone else. In fact, we should assume that's illegal and make sure our infrastructure is robust enough that it doesn't matter.
Sometimes I think you're about the only MAN on this forum, Justus.  I know I'm not the only one thinking that, but since I've already long ago resigned myself to being on all the watchlists anyway, I don't mind saying it out loud. Justus: the John Connor for Bitcoin. |
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Yikes! Is Tony Obi-Wan or Anakin?
Qui-Gon Jinn  |
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Actually, in the above gvt attack scenario, arb bots help funnel BTC to scBTC faster thus increasing the speed at which the SC gains dominance.
Speaking of government attack scenarios, BitPay just hired Emperor Palpatine:  this guy is a trojan horse and doesn't even know it  I doubt we hear anything from him. That's what scare me.  Always two there are, a master and an apprentice. |
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Actually, in the above gvt attack scenario, arb bots help funnel BTC to scBTC faster thus increasing the speed at which the SC gains dominance.
Speaking of government attack scenarios, BitPay just hired Emperor Palpatine: |
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333. the mark of the beast half off?
yep, carlyle group is on board ... satan himself runs that place. I said when the real Wall St. shows up you're not gonna be happy ... psyops, head-fakes, trading-bots, sick money. Wall St. Can bring it. I'm a Bitcoin earner, not a Bitcoin trader. Low prices: my savings accumulate faster. High prices: my savings are worth more. Can't lose. |
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Back to the gold topic. There is a referendum in Switzerland, in November, which is likely to secure a yes vote that the SNB holds 20% of its assets in gold (currently at 7.6%). As soon as this passes the bank will have five years to reach the 20% target. There is no legal escape for it. Considering that the SNB balance sheet has recently blown out Fed/BoE/BoJ-style - it will have to buy up to 1,700 tons of gold in the open market - and take delivery! http://www.zerohedge.com/news/2014-10-28/things-make-you-go-hmmm-swiss-gold-status-quo-showdownI really think this will put a floor under the current gold price, and maybe even spark another medium-term rally. Will be interesting to watch the weasels at the SNB try to wriggle out of it ... after the shit they pulled with the EUR peg anything is possible. How sure is anyone that the 7.6% figure is actually correct? |
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Expect the trend to continue. Your future looks awfully bright Thanks. I'm looking forward to it. |
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looks like sub-$300 coins are on the way.
Awesome. I'm about to get paid and I love receiving more coins than the previous month. |
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I think it will be when people stop to have big profits by trading with borrowed coins
There are people trading with borrowed/purchased coins at a loss. There is a network of entities that buy/borrow coins over the counter, then short with them regardless of whether or not they take losses. |
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so when do we hit the bottom people?
When people stop lending their coins out for shorting. |
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On a more serious note,  <==click Discuss. Non-economic actors are buying/borrowing bitcoins OTC, then using them to sell down the market at a loss. It will work until all the weak and gullible hands have no more bitcoins, then it won't. |
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The "There Is No God But Bitcoin And Satoshi Is Its Prophet" was never true, given The Founder's (PBUH) role in dotbit/Namecoin.
Just because Satoshi, after the cypherpunks spend decades trying different combinations of ideas in their quest for internet money, figured out the right combination first does not mean he's infallible in everything. I think we understand why Bitcoin's proof of work works today better than he understood why it worked in 2008. Namecoin is a mistake - it puts a price on name registry without having price discovery, among other flaws. |
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