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If Side Chains were wholly good, they would need no promotion.
The fact that there are more nuanced advantages and disadvantages for Bitcoin by their existence justifies promotion expense, despite the promoters efforts to deny the disadvantages, that is why the promoters exist.
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Maybe they will head to the Satoshi Forest and Sean's Outpost?
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Looking for design work:
1. Second floor of my residence
2. Military college building for the university
PM for more details or look for me on IRC
I'll bid the architecture work at 20% of total value. (only slightly under HM's 25%) |
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bang on. also explains the long bull market, metaphorically, VC,s will get to a stage like early mining, at some point its better to invest in BTC than it is to try and make earn it.
the idea isn't to disrupt the economy, its to disrupt the financial system used to run the economy.
Bitcoin is a risk distribution virus, more powerful than any biological weapon, it assimilates and leave a working economy in its wake, all we have to do is protect the DNA that makes it work, punting economic energy into Bitcoin is how it grows.
VCs will never resort to solely buying BTC. This is an asinine proposition which defeats the whole purpose of their existence. Tim Draper would be surprised to learn this. http://www.coindesk.com/tim-draper-revealed-silk-road-bitcoin-auction-winner/ |
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But I'm not sure that these arguments are strong enough to show that SPV sidechains hurt Bitcoin's sound-money property. In my opinion, this is only possible in Case #3, but, like Erdogan implied, it might be highly unlikely (impossible?) for a sidechain to obtain the status of #3. The problem for scBTC in case #3, is that it first will have to survive a period with less freefloating value, so it will have a problem achiveing the status of #3.
Others would claim that a #3 is ultimately inevitable due to the ossification of Bitcoin. At some point there would become a new SC that would be better in every way for everyone than Bitcoin and those that can exit do when then can do so. |
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an analogy to the self contained financial system that i envision with Bitcoin is gold.
there is a finite amount of gold circulating throughout the world. it's stored, it's used, it's supply is theoretically immutable. none of it gets "transformed" to other speculative assets at any time. and for 5000 yrs it served as the basis for a sound money system.
by promoting the transformation of BTC units over to "different less secure ledgers" which now seems to be accepted here by even brg444, how is Bitcoins Sound Money function sustained?
There are plenty of examples of gold "side chains". The GLD ETF derives its value from gold. Egold once derived its value from gold. In fact anyone who owns any kind of note that is redeemable for gold is participating in a gold "side chain". Perhaps the most infamous example is the USD which has also lost its peg to gold. These pegs were eventually lost because of central points of failure, but the physical gold remained unharmed. Bitcoin distributes these central points of failure and if side chains fail, the bitcoin will remain. Of course none of the elemental properties of gold were changed to create gold "side chains" and that is why we should go the federated route with bitcoin. Gold distribution certainly changed from these, and became more centralized after leaving its current money uses behind. |
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The same value can not be held simultaneously in the main chain and in a side chain.
But the value of the sidechain is derived from the mainchain and so the scarcity and ledger is respected. This is a very interesting theoretical question: "where is the value stored for a sidechain?" Let's do a little thought experiment to try to come up with a reasonable answer. The purpose of the thought experiment is to isolate the effect of the 2-way peg; it's meant to be a tool to help us understand where the value is actually stored, and not meant to represent plausible future scenarios. We'll ask what happens to the value of scBTC should the 2-way peg be instantly and permanently severed (and the locked BTC on the main chain frozen). If one argues that the value is always stored on Bitcoin's Blockchain, then I think in all cases the value of scBTC should fall to zero. It's pretty clear to me that that won't actually happen in all cases: Case #1: Small sidechain backed by 0.01% of the main-chain BTCHere we have a small sidechain used, perhaps, for experimentation with faster confirmation times. Very little real economic activity takes place on this side chain. When the 2-way peg is severed, I believe the value of scBTC#1 would drop rapidly to zero, as everyone would realize that another sidechain employing the same features but maintaining the BTC backing could easily be recreated. The network effect is too small to matter. --> value is stored on Bitcoin's Blockchain. Case #2: Large sidechain backed by 10% of the main-chain BTCHere we have a large sidechain that perhaps employs ring-signatures for improved anonymity. This scBTC#2 has become the token of choice for black-market activity such as the purchase of illicit goods from SilkRoad 3.0. When the 2-way peg is severed in this case, the value does not fall to zero. The value immediately drops, because many individuals would prefer to hold BTC than unbacked scBTC#2. However, it does not drop to zero because speculators and scBTC#2 users realize that the huge network of users and wallet infrastructure already set up to accept scBTC#2 will maintain demand for unbacked scBTC#2. scBTC#2 becomes an alt coin and trades with a floating exchange rate with respect to main-chain BTC. --> value is stored in both Bitcoin's Blockchain and the sidechain ledger. Case #3: Uber sidechain backed by 60% of the main-chain BTCHere we consider the case where the majority of bitcoins are stored on the sidechain. Perhaps this sidechain is just "better" than bitcoin, and there's a huge push by merchants to move all economic activity here. Speculators also decide to move their BTC to this sidechain, as they fear that a severing of the 2-way peg would hurt the value of their main-chain BTC (they see that the network-effects of this sidechain are becoming greater than Bitcoin's). Now when the 2-way peg is severed, I would argue that it would be the value of bitcoin that would fall and the value of scBTC would actually rise! Scarcity of scBTC#3 is actually greater once the peg is severed (no more main-chain BTC can be converted) and since the majority of economic activity is taking place on this chain, the ledger for scBTC#3 becomes the dominant "memory" for our money. --> value is stored mostly on the sidechain ledger. Once again, the purpose of this thought experiment was not to propose "realistic scenarios"; the purpose was to help answer the question "on which ledger is the value stored?" I think the answer is that for low-levels of adoption, the value remains stored on Bitcoin's Blockchain. But as the network effect of the sidechain grows, a larger component of the value is actually stored on the sidechain's ledger. Thanks for this. Value = convertibility + utility And in all 3 examples is decided by market forces. Failure modes are usually one of the best places to start looking for the hooks. How does something fail? How can it be made to fail most safely, and in what ways can it not be made safe? I would consider the effects of different failure modes on these scenarios. They start with the assumption that the 2wp is broken and that convertibility is lost but this can happen in many different ways and for different causes. The BTC may remain locked or not in different types. If locked and no convertibility they are burned and deflate BTC, or they may be unlocked and re-inflate BTC. Or there are hybrids. In one of the previous examples we had: MC | \ SC1 SC 3 | / SC 2Where SC 1 had rogue devs/miners who inflated it with new assets or subverted the proofs so no SC 2 would convert back to SC 1 and so convertibility was lost. Subsequently SC 3 is set up to restore convertibility because SC 2 had such utility that it kept going and new owner folks wanted to (somewhat) regain the convertibility aspects (including new issuance from SPV). So now you have SC 2 with some BTC convertible back to MC and some not. |
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Damn he should just launch a countersuit against the city Still I feel bad for the old man who has to get arrested for a dumb law like this one, probably also why the US prison system is over congested Thinks if it was a rich man with a lot of money doing the same thing he would be commended and given a medal by the same city lol. such the life. If he had a license and a permit and did precisely the same thing, there would be no need for a lawsuit. That the city didn't grandfather his activities from when before these requirements were established is bad lawmaking. Two wrongs make news. The city should be more embarrassed than it is already. Florida law is possibly the weirdest in the US. |
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but sidechains are not competitors  The same value can not be held simultaneously in the main chain and in a side chain. But the value of the sidechain is derived from the mainchain and so the scarcity and ledger is respected. The SC and MC compete for some things and cooperate on others. The value of the sidechain is derived from the market price, which ought to include both its convertibility to main chain + the side chain's utility. & To the extent the main chain is locked in side chains, it can be expected to reduce the liquidity of the main chain, increasing its volatility, and also the incentive to 51% it. Awareness of the positive and negative nuances will make for better investors. |
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So you concede that there are no others and it is not a lie?
Help me out so that I can be the 2nd then, and make that a lie as you would like to have it.
Where is the open-sourced SNARKs repository? I've not had a chance to look for it yet.
https://github.com/scipr-labThanks for this... (you may not see me here for a while) |
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Yes we know. It is the validation of a proof that is EXTERNALLY CREATED. The Validation and the Proof are coming from the same source, a trusted source until the crypto gets this evaluation. There are a lot of C operations there, and a lot of math.
I'm comfortable that the core devs that are jumping ship have vetted it to their satisfaction, but then they also have an economic incentive to be satisfied with it as well.
There is not "trusted source" -> it works same as Bitcoin (what chain is longer ? chain with more PoW) only roles will be changed. It is not miner who look for then longest sidechain. It is SC-user who must deliver list of HASH-es that proves he destroyed scBTC and now he can unlock BTC. I think we are getting closer. Help me to understand what the codebase is, upon which this SPV does its verification. Is it not the Side Chain? So perforce Bitcoin must trust each of the side chains' proof mechanisms. Side Chains may or may not be open source, and the source may or may not get decent analysis with each update. The complexity risks are interesting in that they enable so many long cons. |
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Why are we even discussing SNARKs anyway? They are only but a long shot. SPVProof does not require the use of SNARKs.
What is the proof provider that the SPV is verifying? |
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Which code is open? You mean Bitcoin code, Not Blockstream's, right?
At this time there is no competition.
It is not likely that there will be any competition soon, if ever.
Adding SPV is really only for Blockstream.
Do you know the complexity of setting up a proof system for which these verifications are made? Look into it. It is a major effort taking some of the best minds many years and a LOT of computational power.
You are really arguing Blockstream will be the only one building sidechains on top of SPVproof !? Is there another? Blockstream has no code per say, they will write some for clients but SPVproof code is open source.
What's to stop Vitalik and the gang or Peter Todd and the crew from creating Blockstream2-3 when they realise that Blockstream business model is viable and is in fact the future of Bitcoin development.
You are underestimating the accomplishment of SNARKs. It took a very large array of expensive computers, a few years of dedicated time by some of the smartest minds in cryptography, some luck and a lot of dedication and persistence. A large grant from the EU. And a very deep, and very specialized mathematics background. It is pretty a similar set of requirements for starting another Google. And I think Blockstream may well be the next Google. If I were Google, I'd have bought them already. They don't have to reinvent SNARKS. Only understanding and implemention implementation is required now. Surely you are not suggesting the Blockstream crew are the only ones able to do that. So you concede that there are no others and it is not a lie? Help me out so that I can be the 2nd then, and make that a lie as you would like to have it. Where is the open-sourced SNARKs repository? I've not had a chance to look for it yet. Once the SPVproof maths have been properly reviewed and vetted by the community (much like Bitcoin or any other propositions are) then its open source code nature will make it available for anyone to tinker with and come away with their own applications and implementations.
The comparison to Google is somewhat pulled out of nowhere. Sure I imagine their success will be comparable but it is not because of them having built a service that benefits from network effect. They are consultants & developers. They don't have any proprietary product or service to offer except their expertise in the crypto field.
The comparison to Google is apt. They capitalized on new compression mathematics that they didn't develop, but came out of the human genome project. Blockstream is also hoping to capitalize on the network effect of Bitcoin, otherwise this would be developed on an altcoin and vetted more properly before plugging it into Bitcoin. In the lab you can evaluate the code and technology, but not the economics. At best you can model that, and even the best models fail constantly. Remember 2008? Greenspan's models failed. They all fail ultimately. The map is not the terrain. |
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Using SNARKs it is very easy to audit bitcoin exchange ... almost real time proof that there are not "naked btc"
Like I said... its tasty bait. Very tasty. I still want to know where the hooks are as best as I can before I chomp down. And there are other ways to do this particular proof, just not so real-time. |
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This provider is only trusted for unlocking BTC from concrete SC.
If you do not trust to the "external proof provider" then do not send BTC into this SC. => Your signature is required before your BTC are send into SC.
It institutionalized this trust of a particular company into the protocol.
Or do you think that people should just not use Side Chains? There should be a better way of doing this. Maybe that is the federated system? In the first instance SPV is federated too, and it may always be, there may never be another Blockstream after all. This is a blatant lie. Blockstream submitted the whitepaper. The community will have to vet the technology and subsequently make plans for it to be implemented, as a consensus. SPVproof is neutral open source code. It favors no one. You could argue as cypherdoc does that they have a "head-start" in that they have already assembled a team of highly competent cryptographer to support their business model. What everyone here fails to ignore is that ANY competitor could've done the same. As you have pointed out the technology was up for grabs and could've been conceptualized and proposed through a white paper by any other team of developers that care enough. How is SPV federated when the miners do the work!? So... name the 2nd company and prove the lie? SPV proof is only half the game. The proof provider is the other half. All SPV does is verify what the proof provider is doing. The "head-start" is about half a decade ahead of anyone else, and draws from a very small pool of experts. Practically draining that pool. It is disingenuous to suggest that ANYONE can do this. It is taking very good advantage of a very privileged position. The miners do the work of mining. They do not do the work of SNARKs. They do not create the proof, they do not cryptographically codify all the code that underpins the proof. They simply verify. The bulk of the work here is not done by the miners. |
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My argumented has never been that "we should just do it". I have presented a case why it is dangerous for security concerns and integrity of the Bitcoin ledger to concede ALL of the processing of different transactions types to federation/oracles.
So there is a dangerous practice that is not really being done today much at all, but theoretically it could be done, and if it were, it might be dangerous. And that is why we should just do it? Do you see why this is unconvincing? Not being done much today? Are you kidding me? Coinbase, Counterparty, Coloredcoins, Bistamp. Every exchanges, any "off-chain" schemes present the exact risk I am referring to. The trend is VERY clear in that sense. Do you not think that these are security concerns and have a HIGH-risk potential to temper with the Bitcoin ledger? Is it not true that with proper implementations sidechains are a very tempting alternative to these? Coinbase and Bitstamp are off-chain solution providers, and a different thing entirely. Might as well lump in Lamborghini, the Federal government and anyone who has a bitcoin wallet and provides a good or service. Counterparty is open source and on chain, there is no secret sauce proof provider there, except what some individual may negotiate with another p2p. Yes, I think a proper implementation of side chains would be a best case scenario. It has incredible implications and can solve a vast array of problems, Bitcoin is the least of it, but a good one, a great one. It is a VERY tasty bait. We are looking for where the hooks and line are so that we can best avoid them and enjoy it with gusto. We may need to nibble before we bite and swallow. I think that SNARKs is going to see action, for better or worse. I think the primary customers are going to be governments (and they can pay much more in fiat than Bitcoin can, and also can do things with guns and jails). It would be nice to have it as a part of private distributed money system as well. The implementation matters though. |
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OP_SIDECHAINPROOFVERIFY only removes dependence on trusted counterparty. => the core problem that bitcoin seeks to solve
Bingo! It doesn't actually do this though. Not yet at least. The trusted counterparty being the proof provider. There are precious few folks that can do a good analysis of that counterparty. The best anyone else can do is trust the evaluation. Good cryptography takes some time to evaluate, it is complicated. They should not expect this to be rushed.:-) This proof will create user who want exit from SC. Bitcoin miner only verifies this proof. If other user on SC will see it it not valid proof then he can provide valid (with more PoW). Yes we know. It is the validation of a proof that is EXTERNALLY CREATED. The Validation and the Proof are coming from the same source, a trusted source until the crypto gets this evaluation. There are a lot of C operations there, and a lot of math. I'm comfortable that the core devs that are jumping ship have vetted it to their satisfaction, but then they also have an economic incentive to be satisfied with it as well. |
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Which code is open? You mean Bitcoin code, Not Blockstream's, right?
At this time there is no competition.
It is not likely that there will be any competition soon, if ever.
Adding SPV is really only for Blockstream.
Do you know the complexity of setting up a proof system for which these verifications are made? Look into it. It is a major effort taking some of the best minds many years and a LOT of computational power.
You are really arguing Blockstream will be the only one building sidechains on top of SPVproof !? Is there another? Blockstream has no code per say, they will write some for clients but SPVproof code is open source.
What's to stop Vitalik and the gang or Peter Todd and the crew from creating Blockstream2-3 when they realise that Blockstream business model is viable and is in fact the future of Bitcoin development.
You are underestimating the accomplishment of SNARKs. It took a very large array of expensive computers, a few years of dedicated time by some of the smartest minds in cryptography, some luck and a lot of dedication and persistence. A large grant from the EU. And a very deep, and very specialized mathematics background. It is pretty a similar set of requirements for starting another Google. And I think Blockstream may well be the next Google. If I were Google, I'd have bought them already. |
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OP_SIDECHAINPROOFVERIFY only removes dependence on trusted counterparty. => the core problem that bitcoin seeks to solve
Bingo! It doesn't actually do this though. Not yet at least. The trusted counterparty being the proof provider. There are precious few folks that can do a good analysis of that counterparty. The best anyone else can do is trust the analysis. Good cryptography takes some time to evaluate, it is complicated. They should not expect this to be rushed. |
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