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the only thing i would say to your response it that the centralized trust problems we've had in the last 5 yrs are going away. exchanges are being more regulated and investment funds are holding them more accountable. Merkle tree audits are becoming commonplace to verify reserves. my long term vision is that more and more trade is conducted directly in Bitcoin with merchants holding BTC, like Overstock, and paying suppliers in BTC. that is happening. you can see the progress with time if you've been paying attention. the ultimate goal is to bring everything into the Bitcoin system. it will take time but it is clearly moving in the right direction. but for this to happen, the Bitcoin system has to remain impenetrable, not only from the outside, but from the inside. as in not introducing a breech in to the source code which acts like an offramp, leak, or siphon of value. the higher level i go to when viewing this SC dynamic, the easier it is to see what the problems are. for me at least. |
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watched those few minutes and it was interesting. i find it jaw dropping that the only cautionary place on the internet about SC's appears to be here. yesterday's glance at Reddit shows nothing but blind faith and sheep herding regarding the SC progress. amazing. i don't mind being a lightening rod or having my own shadow assassin  as long as i speak from the heart. we need to be discussing all existential threats to Bitcoin somewhere. it might as well be here. |
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it's becoming clearer to me everyday that what we are dealing with is Keynesian vs Austrian philosophy with this SC's debate.
...
"The blockchain may only ever be applicable to Bitcoin as Money".
"The BTC currency unit is forever inextricably linked to its blockchain. you break that link and you break Bitcoin".
Cypher: in the past, you've imagined a future where governments hold bitcoins as reserves to back their own currency. Could sidechains be a mechanism to implement such a scheme? i would rather see gvts and orgs like the IMF have to buy BTC to use as reserves. that would take us to the Moon: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2248419i still see SC's as a way to break Bitcoin's money function by allowing a gvt sponsored currency to siphon BTC to SC w/o having to pay for them. we need that the price ramps to sustain mining fees and establish Bitcoin as its own global independent currency. forget asset toys. as it is, Wall St is the only one who needs or wants those types of toys in the first place with a minority of Americans invested in these things. even less by foreigners. what ppl should want and need is Sound Money. that is what this project is all about, imo. and the nice thing is anyone who's currently in the Bitcoin system can just sit back, relax, and wait for it to happen. the price charts still tell me we are destined for greatness. |
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it's becoming clearer to me everyday that what we are dealing with is Keynesian vs Austrian philosophy with this SC's debate.
heretofore, what has brought Bitcoin to where it is today is its Sound Money function. and its been brilliant at that. instant liquidity and transportation worldwide and p2p. continuous growth in the economy and stellar, but volatile, increasing SOV. gvts everywhere scrambling to figure out what this is and what role it has for their futures. investment groups everywhere diving into a variety of Bitcoin investing schemes. Bitcoin is the "Technology Singularity", as Daniel put it in the video above, that is the culmination of 4 decades of work by the cypherpunks. we have achieved acceptance as a global, digital, cash money system that, imo, is in the process of replacing gold's function for the last 5000 yrs. to me, an Austrian leaning Bitcoin proponent, that's all we should strive to be. that's all we need to be. my goal is to have Bitcoin have its own ticker symbol on the Forex exchange. from there, as the only true Sound Money in the world, it can consume all fiat currency AND gold, which will take us To The Moon and way beyond as the sole globally accepted currency. there only needs to be one. the problem is, if it is even a problem, it will take time and some long hard fought battles. the Keynesians don't want to help us. they don't want to "buy in" to the system which would take the price up logarithmically. they think a price of $376 is "too expensive". well, to me the other view is that they just weren't paying attention back in 2009 and tough luck, that's how technology disrupts financial systems, as it has with many other industries. i say "buy in" now and you can still join us on the way to the Moon. we haven't even really taken off yet.
the Keynesian view is that Bitcoin needs to do more to gain acceptance and grow itself. the protocol needs to be changed to incorporate all other forms of asset options; stocks, bonds, assurance contracts, smart contracts, insurance, etc. nevermind that if Bitcoin succeeds at the Austrian Sound Money function, it will force all those assets to trade in terms of Bitcoin eventually as well. but that would be the hard battle and there are too many fiat vested interests that don't want to see that happen. and there are too many Bitcoiner's who are impatient and can't stand price volatility. and there are too many devs that gotta dev and get paid (in USD's). and there are too many of all of those who missed out. so what do they do? they try to change Bitcoin. change it by changing the source code which breaks the Sound Money function. to me, that is what the spvp does, it creates an offramp into all manner of these assets. after all, that is exactly what the Blockstream (Keynesian's) say as well; that being that the blockchain is too restrictive, it's prevents innovation, it's too risky, it's too slow, it's not big enough, yada yada yada. so what is wrong with using SC's to incorporate all those assets? it breaks the Sound Money function. Bitcoin will no longer be viewed as solely a new form of money. it will be viewed as a "trading platform" with which you can use to move back and forth btwn assets and BTC. it would be like a Fidelity brokerage house, you deposit your money in a cash acct and then trade all manner of assets in and out. it also destroys the time preference of what money should be. you see, stocks, bonds, contracts, insurance, etc are long term investments. they are to be held. and they are not used to provide seamless, instant, liquidity type functions like Bitcoin would be if it stays in its current form as sound money. thus, we many NEVER see those assets be converted back to BTC in the future. or at least if we do, it won't be for a long time, and then what does that do for Bitcoins money function? answer: it slows it down if not outright destroys it. if that's true, where do Bitcoin miners get the tx fees they desperately need in the future to secure the mainchain? what do we, as current Bitcoin holders, do if we see that many ppl are using this offramp to move into all these different SC's? how do we interpret an especially popular SC? Zerg and others say that we should trust Blockstream devs to incorporate any popular function back into the MC. but that would be to violate one of Bitcoins core principles; trust no man. and incorporating other assets back into MC doesn't even make any sense when you are talking about SC's that offer completely different assets as defined above. they would have to stay as SC's and i dare say there mere existence destroys Bitcoins liquidity and money function.
Bitcoin is a simple system currently. that's great for a simple money function. we don't want complexity or risk. but to add SC's into the equation introduces all sorts of risk and unpredictable consequences. the price of Bitcoin has to move orders of magnitude higher to achieve its money status. this is how miners will profit and how adoption will increase. the only way to achieve this is to target the Forex and gold markets as a Sound Money; the exact same plan that has gotten us to where we are. those are the Big Kahuna's and this is the strategy that the cypherpunks ultimately envisioned and this is what will take us to the Moon. we need to force outsiders to buy in. not allow them to insert an offramp to divert value into insignificant, undesirable or risky asset markets.
if you've read this thread for any length of time, you can see that what i'm saying above is totally consistent with my positions in the past. as well as my past memes:
"The blockchain may only ever be applicable to Bitcoin as Money".
"The BTC currency unit is forever inextricably linked to its blockchain. you break that link and you break Bitcoin".
This is a wall of text cypher One minor neatpick: what will happen if you're wrong, what if bitcoin as is it is not enough to reach the goal you aimed to? I'm not saying that sidechain will be the "upgrade" tha will save bitcoin, though. I'm arguing the fact that bitcoin will succeed without any modifications. its a fair question. but i can't see how it would not for 3 reasons. the code has withstood attack, the fixed supply, and the price charts all indicate future success. the latter being subjective of course. |
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it's becoming clearer to me everyday that what we are dealing with is Keynesian vs Austrian philosophy with this SC's debate.
heretofore, what has brought Bitcoin to where it is today is its Sound Money function. and its been brilliant at that. instant liquidity and transportation worldwide and p2p. continuous growth in the economy and stellar, but volatile, increasing SOV. gvts everywhere scrambling to figure out what this is and what role it has for their futures. investment groups everywhere diving into a variety of Bitcoin investing schemes. Bitcoin is the "Technology Singularity", as Daniel put it in the video above, that is the culmination of 4 decades of work by the cypherpunks. we have achieved acceptance as a global, digital, cash money system that, imo, is in the process of replacing gold's function for the last 5000 yrs. to me, an Austrian leaning Bitcoin proponent, that's all we should strive to be. that's all we need to be. my goal is to have Bitcoin have its own ticker symbol on the Forex exchange. from there, as the only true Sound Money in the world, it can consume all fiat currency AND gold, which will take us To The Moon and way beyond as the sole globally accepted currency. there only needs to be one money and Bitcoin can be "it". the problem is, if it is even a problem, it will take time and some long hard fought battles. the Keynesians don't want to help us. they don't want to "buy in" to the system which would take the price up logarithmically. they think a price of $376 is "too expensive". well, to me the other view is that they just weren't paying attention back in 2009 and tough luck, that's how technology disrupts financial systems, as it has with many other industries. i say "buy in" now and you can still join us on the way to the Moon. we haven't even really taken off yet.
the Keynesian view is that Bitcoin needs to do more to gain acceptance and grow itself. the protocol needs to be changed to incorporate all other forms of asset options; stocks, bonds, assurance contracts, smart contracts, insurance, etc. by allowing BTC to be transformed into speculative assets via the spvp, that is by definition inflationary. nevermind that if Bitcoin succeeds at the Austrian Sound Money function, it will force all those assets to trade in terms of Bitcoin eventually as well. but that would be the hard battle and there are too many fiat vested interests that don't want to see that happen. and there are too many Bitcoiner's who are impatient and can't stand price volatility. and there are too many devs that gotta dev and get paid (in USD's). and there are too many of all of those who missed out. so what do they do? they try to change Bitcoin. change it by changing the source code which breaks the Sound Money function. to me, that is what the spvp does, it creates an offramp into all manner of these assets. after all, that is exactly what the Blockstream (Keynesian's) say as well; that being that the blockchain is too restrictive, it's prevents innovation, it's too risky, it's too slow, it's not big enough, yada yada yada. so what is wrong with using SC's to incorporate all those assets? it breaks the Sound Money function. Bitcoin will no longer be viewed as solely a new form of money. it will be viewed as a "trading platform" with which you can use to move back and forth btwn assets and BTC. it would be like a Fidelity brokerage house, you deposit your money in a cash acct and then trade all manner of assets in and out. it also destroys the time preference of what money should be. you see, stocks, bonds, contracts, insurance, etc are long term investments. they are to be held. and they are not used to provide seamless, instant, liquidity type functions like Bitcoin would be if it stays in its current form as sound money. thus, we may NEVER see those assets be converted back to BTC in the future. or at least if we do, it won't be for a long time, and then what does that do for Bitcoins money function? answer: it slows it down if not outright destroys it. if that's true, where do Bitcoin miners get the tx fees they desperately need in the future to secure the mainchain? what do we, as current Bitcoin holders, do if we see that many ppl are using this offramp to move into all these different SC's? how do we interpret an especially popular SC? Zerg and others say that we should trust Blockstream devs to incorporate any popular function back into the MC. but that would be to violate one of Bitcoins core principles; trust no man. and incorporating other assets back into MC doesn't even make any sense when you are talking about SC's that offer completely different assets as defined above. they would have to stay as SC's and i dare say there mere existence destroys Bitcoins liquidity and money function.
Bitcoin is a simple system currently. that's great for a simple money function. we don't want complexity or risk. but to add SC's into the equation introduces all sorts of risk and unpredictable consequences. the price of Bitcoin has to move orders of magnitude higher to achieve its money status. this is how miners will profit and how adoption will increase. the only way to achieve this is to target the Forex and gold markets as a Sound Money; the exact same plan that has gotten us to where we are. those are the Big Kahuna's we want to tap into and this is the strategy that the cypherpunks ultimately envisioned and this is what will take us to the Moon. we need to force outsiders to buy in. not allow them to insert an offramp to divert value into insignificant, undesirable or risky asset markets.
if you've read this thread for any length of time, you can see that what i'm saying above is totally consistent with my positions in the past. as well as my past memes:
"The blockchain may only ever be applicable to Bitcoin as Money".
"The BTC currency unit is forever inextricably linked to its blockchain. you break that link and you break Bitcoin".
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Odalv, what type of mathematical proof is being used to lock btc in the currently functioning federated server models you claim are in place today? And why would they be considered secure and how well are they functioning?
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Someone was gushing over gmax over on reddit so in the interest of balance I had to show him this. For those who don't know, aantonop is Andreas ; He didn't have the brass to post it publicly of course, he's a cowardly weasel through and through In the interest of being a tough guy like you, here is the rest of our PM discussion which you must have missed in your posting: Wait, so you lost the vote, cancelled the vote and are now telling me that you lost it but BY LESS THAN I CLAIMED?
Do you believe that everyone in the world who doesn't agree with you is just one person? I'm getting that impression. No. I'm saying that you either can't count or you were outright lying. And I'm letting you know in private because I'm kind enough to not point our your innumeracy-or-dishonesty in public even though you've been rather uncivil towards me. The you accuse me from gathering community input (Wow!), which is what y'all said was needed.
Have you no shame?
Gathering input is good— but what you posted wasn't a genuine effort to get opinions it was a heavily biased rabel-rousing rant which has had the effect of causing people to make threats of violence against me. And if I'm uncharitable I might conclude from the fact that you never mentioned it in the main discussion that you intended to keep it hidden so that your incorrect claims would go unchallenged... or perhaps you just didn't think to mention it, it happens... but still stinks. to which you replied: GO fuck yourself you little weasel. You have no shame, no integrity and no balls. You can't even handle a public discussion without getting some sycophant to shut it down when you're losing.
FUCK YOU and suck on a cactus.
I honestly believed that if it were actually a vote the position I was recommending would have eventually won out, the vote-stacking you were conducting only goes so far— as I said in the discussion, the only criteria I've seen I've seen suggested that would have kept Bruce Wagner, Nefario, or even Pirate40 off is the one of not including people where there was genuine concern— all hard large basis of public support. That this has been an enormous time and emotion suck, and it had reached the point where aantonop was name calling people who didn't agree with him, along with threats and other embarrassing responses... it probably was best to kill it mercifully. |
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In no way is the "Bitcoin's bullet proof BTC/blockchain linkage" broken. The coins aren't actually moved to the other chain, they are held on the mainchain like gold in a vault and a representation which is NOT BTC and can't be spent at coinbase for example, appears on the sidechain.
There is no way sidechains break the 21 million scarcity limit of real BTC. And anything that a sidechain could do to "dilute" the space (that is by creating a new token type) can be done with an altcoin today, and that has gotten nowhere. Any "betrayal" of the BTC "brand" that can be done with sidechains can equivalently be done much more easily (and with the same brand damage) with centralized solutions. We've seen it over and over again; Gox ponzi didn't kill BTC, and SCponzi won't either. But the risk of SCponzi will certainly make the mainchain the preferred place to hold and make large transfers. Sidechains will make Bitcoin the preferred long term store of value, because tremendous utility is just a chain transfer away.
And how is Gox going to go Ponzi when the GoxBTC and GoxUSD on its sidechain must match the BTC "locked" on the mainchain and the USD in their bank accounts (which can be audited)?
If a multi-token sidechain is created with scBTC and inflata-Coin-to-make-devs-rich, what do you think people will do? Probably not even touch the sidechain. But assuming they do, they will hold the scBTC and when they need to "use" the sidechain features the require inflata-coin, they'll buy the inflata-coin moments before spending it.
But without sidechains you really do risk a new token that comes along and takes massive market share. We as a society are not ready to put stocks, mortgages, etc on a blockchain (because why have the risk of a new tech coupled with the return of an old stock). But someday we WILL be. And when we are, what's going to be the preferred payment? Old stodgy BTC that you have to sign up for exchanges, do AML, etc to access real markets, or tradecoin which can be tranformed into GOOG 5 seconds after receipt? There's a REASON gold shot up when ETFs appeared -- its called access to markets.
What about the IOT (internet of things) token? 20 years from now, items in your house might be doing 500 txns per day for a total of < $5 automatically on your behalf... Sidechains allow BTC to scale beyond our wildest dreams to applications we can't even consider.
You are like the guy who said there's only use for 5 computers in the world.
You should instead consider that the biggest risk to BTC right now is the sidechain-altcoin that Blockstream so "kindly" offered to build instead of integrating these technologies directly into BTC. That altcoin has the potential to leave BTC in the backwaters of digital currencies (except that I believe in the core devs in Blockstream to move the tech over).
Ok, that's probably the end of my rant... but my subsequent silence does not mean that you are right :-). Honestly, I miss the great insights you guys (and mostly cypherdoc) provide about the larger world economic picture on this thread and hope that we can eventually get back to it! But I'll tell you this; I'm a technologist and I've skipped from one newly breaking technology to the next for my entire career in startups; gaming, telecom in 1995-2000, storage, wireless, OSHW, bitcoin. I'm telling you if sidechains CAN be done (honestly I haven't really verified the gory details of the automated 2-way peg myself) they WILL eventually be the dominant coin. I proposed them in early 2012 (the concept not the mechanism)... but don't worry to much, BTC will not die; it'll be the Rolls Royce with a valuation above what we have today, while the sidechain-enabled coin takes 99% of the market.
EDIT: tl;dr. Bitcoin is the zerg. It will take over everything thru sidechains.
That's a really persuasive argument from someone I respect. The other way to question this though is that somehow btc units are fed through the peg and through some magic stocks, bonds , smart contracts, altcoins, etc come out the other side and somehow this is not inflationary? What if it just breaks the entire system? |
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as i see it, SC's are a temptation to make fast money thru inflation thru the indirect method of breaking Bitcoin's Sound Money function using federated servers which allows transformation of BTC to all manner of speculative assets (anything not BTC). except that Blockstream will be in the best position to make USD's from that. the rest of us will have to scramble to figure out which chain contains the most value.
the bigger reward, but longer battle, will be achieved by maintaining a self contained Bitcoin financial system that inextricably links the currency unit to its blockchain. this will be much easier for us, all we have to do is hodl.
FTFY maybe. but those ppl are short sighted as the big column on the far right should be the goal. there should be a column for gold:  |
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here's a clever reply on how Blockstream can make money devving SC's by asherp on Reddit:
[–]asherp 2 points 7 hours ago
My guess: it takes time to convert btc onto a given sidechain, and the weaker the chain the longer it takes to convert. The devs could have already started several sidechains that expand bitcoin's features, moving their own btc onto them. When they announce their new sidechain, they can offer to trade for coins on the main chain for slightly above the 1-1 peg. Those who want to use the sidechain can either a) convert their own coins which could take weeks or 2) buy premined sidechain coins for a small fee.
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as i see it, SC's are a temptation to make fast money thru inflation thru the indirect method of breaking Bitcoin's Sound Money function using the spvp which allows transformation of BTC to all manner of speculative assets (anything not BTC). except that Blockstream will be in the best position to make USD's from that. the rest of us will have to scramble to figure out which chain contains the most value.
the bigger reward, but longer battle, will be achieved by maintaining a self contained Bitcoin financial system that inextricably links the currency unit to its blockchain. this will be much easier for us, all we have to do is hodl.
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my position is that Bitcoin should only be used as Money. all other services should simply use Bitcoin as money. Bitcoin should not have to build in any other services.
is that consistent with your model? it doesn't sound like it.
Hmm... we are lacking the terminology here. Gold or USD is also money. Bitcoin is money with addtl features like guaranteed scarcity and simple transfer. These features make it better money. But exchange is not supported (atomic trustless worldwide). Changetip and lots of other services dont really use it. By this I mean other then the on and off ramp changetip might as well be using USD. I want BTC to be the universal electronic embodiment of value -- the final money. To do so it needs to truly be integral to the applications that require value. But I want the main chain to remain the safe low risk equivalent of holding FRNs or gold. I dont want tons of features thrown into the mainchain -- too dangerous. At the same time having every app use BTC equivalently to how it would use USD (centralized offline storage with individuals balance in a DB) is wasting btc's revolutionary technologies. Sidechains are the way to keep the core safe yet allow BTC to assume the role of the ultimate money.  +1 My man. This guy gets it. I don't want it to be money cypherdoc. We need it to be the internet of money. all other services should simply use Bitcoin as money. This 8 words sentence perfectly resumes you. After nearly 200 pages of discussion on this very issue. You did do not understand that sidechains (whether SPVP or federated) are the most natural and intuitive way to create services that use Bitcoin as money. They are potentially the optimal way to preserve BTC as a ledger. The SPVP proposal you so oppose is in reality emerging for the very nature of Bitcoin as a programmable open-source protocol. As stated, the reason its implementation would be ideal is to allow a more secure & decentralized proof mechanism to be available to sidechains that command these properties. i was thinking today this very point is what distinguishes our philosophies of the pro vs con of SC's you, zerg, odalv all want to see the Bitcoin protocol encompass all forms of asset trade; stocks, bonds, insurance, smart contracts, etc. you will accomplish by breaking the link btwn the currency unit and its blockchain. i, and many others on this thread, see Bitcoin as Money only. a digital form of gold. the SPVproof is the key to our opposing views. in our world view, Bitcoin as Money will eventually be used to trade these assets as well. but it will take longer and some patience. there is good reason for this outlook and desire. the real problem with the world today is with unfettered fiat printing. we need a better money like Bitcoin. imo, Bitcoin is the targeted silver bullet aimed at the heart of central banks at their core function of money printing. Forex markets trade of $5.3T per day. the gold market is $8T. if we can maintain Bitcoin as Money, with time we can subsume both of those markets which will take us to the Moon. but it relies on keeping the sound money function. there's the problem.  my friend. the cost is not time or convenience but trust. if you want to maintain Bitcoin as Money only the trust for the ledger matters. to preserve the trust, you have to, as you say,discourage any inflation and devaluation of its value. by conceding the handling of transactions and proof verification to anyone but the network you forfeit trust. by conceding the trust to a significant portion of the economy to off-chain schemes and federation of servers/oracles/voting pools you necessarily create more risk and enable possibilities of fractional reserve schemes. i agree with your first four sentences, not the last. it's how to accomplish this where we disagree. by maintaining Bitcoin's bullet proof BTC/blockchain linkage which has been aptly proven over the last 6 yrs, we have accomplished enough trust to attract all the investment we're seeing currently. that is what is important. nothing that happens on gox-like ledgers matters to Bitcoin and its future success. none of those BTC ever left the blockchain and remain in circulation somewhere in someones hands. any scBTC that get lost in an attack or SC failure get lost forever. but the real problem is the offramp; the spvp which breaks the sound money function and ruins everything for everyone. |
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brg444. i could give a shit about Bitcoin encompassing those pitiful little markets to the left with SC's. i want the Big Kahuna on the far right. those amts are $/d: |
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my position is that Bitcoin should only be used as Money. all other services should simply use Bitcoin as money. Bitcoin should not have to build in any other services.
is that consistent with your model? it doesn't sound like it.
Hmm... we are lacking the terminology here. Gold or USD is also money. Bitcoin is money with addtl features like guaranteed scarcity and simple transfer. These features make it better money. But exchange is not supported (atomic trustless worldwide). Changetip and lots of other services dont really use it. By this I mean other then the on and off ramp changetip might as well be using USD. I want BTC to be the universal electronic embodiment of value -- the final money. To do so it needs to truly be integral to the applications that require value. But I want the main chain to remain the safe low risk equivalent of holding FRNs or gold. I dont want tons of features thrown into the mainchain -- too dangerous. At the same time having every app use BTC equivalently to how it would use USD (centralized offline storage with individuals balance in a DB) is wasting btc's revolutionary technologies. Sidechains are the way to keep the core safe yet allow BTC to assume the role of the ultimate money. +1 My man. This guy gets it. I don't want it to be money cypherdoc. We need it to be the internet of money. all other services should simply use Bitcoin as money. This 8 words sentence perfectly resumes you. After nearly 200 pages of discussion on this very issue. You did do not understand that sidechains (whether SPVP or federated) are the most natural and intuitive way to create services that use Bitcoin as money. They are potentially the optimal way to preserve BTC as a ledger. The SPVP proposal you so oppose is in reality emerging for the very nature of Bitcoin as a programmable open-source protocol. As stated, the reason its implementation would be ideal is to allow a more secure & decentralized proof mechanism to be available to sidechains that command these properties. i was thinking today this very point is what distinguishes our philosophies of the pro vs con of SC's you, zerg, odalv all want to see the Bitcoin protocol encompass all forms of asset trade; stocks, bonds, insurance, smart contracts, etc. you will accomplish by breaking the link btwn the currency unit and its blockchain. i, and many others on this thread, see Bitcoin as Money only. a digital form of gold. the SPVproof is the key to our opposing views. in our world view, Bitcoin as Money will eventually be used to trade these assets as well. but it will take longer and some patience. there is good reason for this outlook and desire. the real problem with the world today is with unfettered fiat printing. we need a better money like Bitcoin. imo, Bitcoin is the targeted silver bullet aimed at the heart of central banks at their core function of money printing. Forex markets trade of $5.3T per day. the gold market is $8T. if we can maintain Bitcoin as Money, with time we can subsume both of those markets which will take us to the Moon. but it relies on keeping the sound money function. there's the problem. |
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Jim Rickards in an interview re: China debt, global depression (lower % growth than could be achieved - the Keynesian def) and timing of the next crisis Anyways, speaking about a system reset, the last question was: Do you think such scenarios make people more optimistic about crypto currencies like Bitcoins? I see the rise of crypto-currencies as a sign of waning confidence in traditional currencies, such as the dollar. I expect the trend towards alternative currencies, such as Bitcoin, to grow as central banks continue to fail in their efforts to manipulate asset values. http://internationalfinancemagazine.com/article/The-debt-problem-in-China-is-not-hype.html#sthash.XPW1qNhD.dpufNice find. The back pedaling is almost complete. And, accordingly on Twitter, his new online store accepts bitcoin. wat!? someone should call him out on that one. |
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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. the bitcoin can be lost in a SC failure though. i think confidence is eroded in the entire system certainly in the case of those owners who lose their scBTC. Bitcoin can also be locked in for a length of time by the miners, remember merge mining can mine empty blocks on the SideChain locking it without forfeiting there mining revenue earned on other SideChains or Bitcoin. Which implies they forfeit the mining revenue of the chain they are attacking. If users decide that this chain is valuable to them it is in the miners best interest to preserve their economic incentives this is new, in Bitcoin land, to use 100% of your mining power you had to forfeit 100% of your income and pay for the energy needed to be a malicious miner, in the post SC BTC world you can use 100% of your mining power and attack the network, while still earning tx fees on other chains, these kind of speculative attacks was not possible before, its just labour and gold rigging, on the protocol level. its will always be profitable. Hmm... It seems that in later years (with smaller coinbase TX block rewards) under the scenario of a very successful MM SC, the miner may be 51% the MC and mining the SC profitably without significant opportunity costs. Since SPV is a soft fork, they could be 51%ing MC without supporting SPV on the MC and maliciously unlocking BTC from the SC. don't forget the other way around is even more likely. attacking the SC is costless in that the attack is temporary and doesn't involve destroying your main source of revenue, the MC. there is greater incentive as well as you will be stealing scBTC which can be converted back to BTC. you can also short scBTC if their is a market exchange. you also wouldn't lose the value of your mining hardware investment like you would attacking your main revenue source, the MC. |
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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?" blah blah blah Wow, you can describe all that in one line: The price change will be proportional to the flow derivative. In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise. If BTC is moving out of the sidechain the price will fall. If you are still confused think about modelling it. You would best model this by creating "value" as an immaterial quantity. Each chain HAS a value (essentially a market cap, which is price * quantity), based on its usefulness. If 2 chains are pegged, changes to the value cannot be expressed in price, so quantity must change -- that is BTC is transmuted from one chain to another. If 2 chains are not pegged, changes to the value cannot be expressed by moving quantity so price must change. This idea is fundamental; it applies to all commodities and products where you can transform one to another. the whole point that Peter R is trying to make is that with SC's, value gets "shared" btwn MC and all SC's. with the potential of being "severed" or "fragmented". we don't want that with Bitcoin. we want it ALL on the mainchain. we want all outsiders to be forced to "buy in" to BTC for their seat at the table. who here wants to share value with Truthcoin?  Cypherdoc your reasoning is completely flawed. First of all, I know that you aren't an engineer, but you still you should be able to understand that it CANT be ALL on the mainchain. There are diametrically opposed requirements. Like anonymity vs. public spending accountability. Like handling vast numbers of txns per second vs. keeping all transactions forever. Like blockchain spam vs. document timestamping. There are plenty of things with diametrically opposed requirements in life, like sleeping (darkness) and reading a book (bright light); its unrealistic to imagine no 2 applications will emerge in a space which covers the entire concept of economic activity. Why have all prior altcoins failed? Simply because they're all essentially the same. Different POW? Come on, what end user cares? Bitcoin 2.0 (assets)? Colored coins is good enough, but the market is not mature enough for anyone to care right now. You may argue that there will never emerge a use case that is both compelling and that Bitcoin cannot handle. Ok in that case there will be no sidechains, because Metcalf's law, etc and so the functionality will simply sit unused, and eventually be deprecated. There is no drawback to this. But if a use case DOES emerge, the only way to pull that value into Bitcoin is via sidechains -- because with a sidechain the Bitcoin 21million scarcity token can be applied to that use case. You need to contemplate what you cannot contemplate, not make decisions only based on what you know. So the ONLY way to get "all outsiders to be forced to "buy in" to BTC for their seat at the table" is via sidechains. my position is that Bitcoin should only be used as Money. all other services should simply use Bitcoin as money. Bitcoin should not have to build in any other services. is that consistent with your model? it doesn't sound like it. Hmm... we are lacking the terminology here. Gold or USD is also money. Bitcoin is money with addtl features like guaranteed scarcity and simple transfer. These features make it better money. But exchange is not supported (atomic trustless worldwide). Changetip and lots of other services dont really use it. By this I mean other then the on and off ramp changetip might as well be using USD. I want BTC to be the universal electronic embodiment of value -- the final money. To do so it needs to truly be integral to the applications that require value. But I want the main chain to remain the safe low risk equivalent of holding FRNs or gold. I dont want tons of features thrown into the mainchain -- too dangerous. At the same time having every app use BTC equivalently to how it would use USD (centralized offline storage with individuals balance in a DB) is wasting btc's revolutionary technologies. Sidechains are the way to keep the core safe yet allow BTC to assume the role of the ultimate money. if you give it time to grow it can be that ultimate money. but by breaking the security link btwn the unit and blockchain, how can this be achieved. the SC's will be less secure and different ledgers. they are not extensions of Bitcoin. they will be speculative. we want the same things but i don't see how SC's do this. please explain your vision of atomic trustless exchange. |
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Do you not recognize there are applications that demand more decentralization than federation/oracles/OT can provide?
Would you trust any lesser decentralized schemes with money functions of Bitcoin that are not supported by the mainchain?
Please STFU this used to be a nice thread to follow. I agree, that is until cypherdoc polluted it with his FUD and misinformation. By the way there's at least 4 pages of discussion on sidechains that were created today without any of my participation so maybe you should stay away for awhile if you don't care to discuss them. what an idiot |
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RUT turning down again. Dow and Transports peaking out in a Megaphone?  |
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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.
i think this is where we agree; if we are going to use SC's at all. of course, there's always OT as well. Yes. If it ain't broke, don't fix it. Bingo! we have a Winner! If you look at Peter R's three scenarios and my comments (I hoped someone else would point this out...) there is not really that much difference between sidechains and altcoins. The sidechains' promoters just want to get a flying start. In my opinion, they won't. The economics does not support it. i think you may be right. see this convo i had with MrMadden on Reddit: http://www.reddit.com/r/Bitcoin/comments/2m6r10/forget_currency_bitcoin_tech_could_disrupt/cm44rfd?context=10000 |
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