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Author Topic: [2019-10-22] Bitcoin Sidechains To Send Altcoins Prices to ZERO?  (Read 272 times)
CryptoBry (OP)
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October 22, 2019, 04:13:58 PM
 #1






Tomorrow (a few hours from now), it will have been exactly five years since the original white paper on Bitcoin sidechains (PDF) was released. The basic idea explained in the paper was that Bitcoin users would be allowed to move their coins between multiple, completely different blockchains that could enable a wide range of new cryptocurrency features.

The end result of this functionality would theoretically be an end to the many altcoins that existed on the market at the time, as there would no longer be a legitimate reason to create a new cryptocurrency in an effort to experiment with new features. Instead, new features that were sufficiently complex could come to Bitcoin by way of sidechains.

Today, sidechains do exist, but they come with trade-offs in the areas of centralization and censorship resistance – at least for now. At the recent Transylvania Crypto Conference, a panel of experts on the topic, including Blockstream CEO and sidechains white paper co-author Adam Back, discussed the current state and future potential of sidechains for Bitcoin.


The source is here for more reading...





The claim is that Bitcoin Sidechains can eventually make all altcoins lose value and purpose as this functionally can easily adopt all the features that altcoins may have rendering them, in essence, very worthless and inutile. "...new features that were sufficiently complex could come to Bitcoin by way of sidechains."


Now, whether this claim can happen or not depends a lot if Sidechains can be implemented soon and if the market will be reacting in the way it is expected.

Do you think that Sidechains has this potential or maybe the guys behind this proposition is just imagining things? Please share here what you may know about this Sidechains...





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October 22, 2019, 05:07:05 PM
 #2

An advantage of sidechains adding features is that it is then secured by the full value of bitcoin, thus it is distributed and has a lot of value securing it as compared to a new alt coin that has very low value and therefore lower security.
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October 22, 2019, 06:59:23 PM
Last edit: October 22, 2019, 07:10:51 PM by Carlton Banks
 #3

It's obvious that the idea has alot of potential (as well as technical hurdles, hence the distinct lack of Bitcoin sidechains in operation since the idea was first written up)

I like the experimental possibilities; Ethereum's EC20 protocol (?) could be viewed like a sidechain system, where many different tokens (that do not necessarily have to be currencies Wink ) are run in parallel with the underlying Ethereum blockchain (Buterin always said "Ethereum is not designed to function as a currency", and to a certain extent that's true, you're buying shares in the overall platform when you purchase ETH). This direction was originally fulfilled with the "colored coins" approach in Bitcoin, and at least one noteworthy success (Omnilayer's hosting of the Tether stablecoins) has been using Bitcoin's main blockchain for this secondary purpose.

Having a sidechain for an internet domain name system, cryptographic shares in companies (even other financial contracts), or just for serving and querying keys (PGP system could use such a sidechain in light of this summer's keyserver flaw) could all be very aptly implemented as Bitcoin sidechains.

There's a problem with all the possibility though; freedom to experiment includes freedom to design deceptive or disastrous sidechains, and the corresponding freedom to make unwise decisions about using such chains. I expect that a breakthrough in Bitcoin sidechain tech and a subsequent explosion in marketing of new sidechains is going to lead to alot of fraud and losses of over-excited investors.

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October 22, 2019, 07:05:05 PM
 #4

Too much money needed to create a sidechain, it's a bit like mining bitcoins... not really for the average Joe. More money you will have to invest in, more "power" you'll get.  Another argument I found interesting, what could happen once we have a lot of sidechains built, couldn't it quickly become a real mess?

I know the advantages but It reminds me of powdered milk for newborns. We collect the milk from the cows, we process it into powder in the factories. To finally transform it back into liquid milk (what it was at first + everything chemical, as a gift )


maybe the guys behind this proposition is just imagining things?

https://blockstream.com/liquid/
I don't think Blockstream is imagining something  Roll Eyes Nor ETH with Plasma or Lisk.

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October 22, 2019, 07:43:16 PM
 #5

An advantage of sidechains adding features is that it is then secured by the full value of bitcoin

They aren't. Sidechains are altcoins. Nobody has even figured out how to theoretically secure sidechains in a trustless and decentralized way.

This comment from Peter Todd outlines one of the primary problems:

Quote
Miners can't steal with 51% attacks alone; they have to also do doublespends, which is very limited.
With merge mined sidechains and drive chains 51% attacks are sufficient to steal funds.

Other approaches like federated consensus are uninteresting.

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October 22, 2019, 09:03:45 PM
 #6

An advantage of sidechains adding features is that it is then secured by the full value of bitcoin

They aren't. Sidechains are altcoins. Nobody has even figured out how to theoretically secure sidechains in a trustless and decentralized way.

This comment from Peter Todd outlines one of the primary problems:

Quote
Miners can't steal with 51% attacks alone; they have to also do doublespends, which is very limited.
With merge mined sidechains and drive chains 51% attacks are sufficient to steal funds.

Other approaches like federated consensus are uninteresting.

They aren't NOW, but responding to the article and the potential designs discussed, they will be, which was the point.

Carlton Banks
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October 22, 2019, 09:31:33 PM
 #7

Sidechains are altcoins. Nobody has even figured out how to theoretically secure sidechains in a trustless and decentralized way.

yep, there'd be a million side-chains by now if there was a viable way to do it.

Vires in numeris
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October 22, 2019, 09:35:12 PM
 #8

Altcoins are already going to zero in the long run, most of them are cash grabs that can't seriously compete with anything, and those that aren't can still die because they aren't strong enough. This all will happen regardless if sidechains will ever be launched or no.
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October 22, 2019, 09:39:42 PM
 #9

Altcoins have one main utility that Bitcoin will never be able to take away from them, which is that they generally go up more than Bitcoin. Most of the altcoin traders and investors play with altcoins to stack up on satoshis, and I'm pretty sure that it will continue to be like that for many more years. It also helps keeping a lot of Bitcoin off the market.

People never cared enough about the utility of altcoins to care about Bitcoin doing a lot of things better, or that it has a lot in the pipeline deeming altcoins obsolete.
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October 22, 2019, 10:03:31 PM
 #10

They aren't. Sidechains are altcoins. Nobody has even figured out how to theoretically secure sidechains in a trustless and decentralized way.

They aren't NOW, but responding to the article and the potential designs discussed, they will be, which was the point.

This is from the article:

Quote
An alternative system known as Drivechain, which has been developed by Bitcoin researcher Paul Sztorc, would put miners in control of the funds on the sidechain, but enabling this type of sidechain would require a soft-forking change to Bitcoin.

I was specifically talking about drivechains being insecure. Worse yet, their insecurity could effectively become an attack on Bitcoin:

Quote
Unfortunately, SPV proof sidechains and drivechains both turn the mainchain into an automated SPV client of the sidechain. In particular, under drivechains, mainchain miners are forced to pay attention to the sidechain in order to determine which way to vote. In effect, it requires that mainchain miners run sidechain fullnodes for all existing sidechains in order to prevent inflation attacks on any sidechain.
https://zmnscpxj.github.io/sidechain/weakness/index.html

Quote
This is why merge mining and drive chains are such a nasty attack: there's very little users can do to stop it directly. Paul is a really awful person to push this, but there's very little I can actually do with my node or my wallet to stop that.
https://twitter.com/peterktodd/status/1090410614613135361

Adam Back points out the security holes of merged mined sidechains right in the article too:

Quote
“If it’s merged mined, the miners, collectively, could take them against the protocol, or if it’s in some kind of HSM-assured multisig, somebody could go hack two-thirds of the HSMs.”

There may be promise in zero-knowledge proofs, but it is completely theoretical. Nothing that currently exists is even close to accomplishing proofs of that magnitude. It would be a stretch to even call it vaporware:

Quote
“I think that now if we want to do a real two-way peg, we probably need to get like full, efficient, general-purpose zero-knowledge proofs, and we need a way for Bitcoin validators to be able to validate what’s happening on the sidechain before allowing pegs to come back,” explained Poelstra.
https://www.forbes.com/sites/ktorpey/2019/02/27/its-2019-where-are-bitcoins-sidechains/#60da53c353b4

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October 23, 2019, 08:55:59 AM
 #11

People never cared enough about the utility of altcoins to care about Bitcoin doing a lot of things better, or that it has a lot in the pipeline deeming altcoins obsolete.
This. Up to last year I really believed that altcoins would trend down as the growth of LN on paper forms a major threat to any altcoin focusing on fast and cheap transactions, but I couldn't be more wrong.

Altcoins work as leveraged instruments both on the way up and down, and this is what people like about them, no matter how crappy they may seem. All that matters is to enter and exit with a profit and people then shift to another coin.

Buying random altcoins is also very exciting for people in the sense that it potentially may turn out to be the next Bitcoin or Ethereum they have invested in. It's a complete package that makes them interesting investment options.

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October 23, 2019, 09:15:02 AM
 #12

Unless a sidechain can earn you dollars then alts have absolutely nothing to worry about. That's the only reason most of them exist and that's the only reason most people are here.

And it's not as if alts are being used for any actual purposes. If you were serious about your purpose you wouldn't be using one.
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October 23, 2019, 10:18:04 AM
 #13

Sidechains have been around as a concept and advocated for for a long while now.

There is really no evidence that they will bloom into something major any time soon (even though I do think that it'll be done, just in the long term) that will replace the entirety of altcoin markets.

But it would certainly make a lot of sense to integrate decentralised services and whatnot directly on top of the bitcoin blockchain, as opposed to have an alternate chain to do the task. I just don't think that the markets are ready for this yet.
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October 23, 2019, 10:55:44 AM
 #14

Up to last year I really believed that altcoins would trend down as the growth of LN on paper forms a major threat to any altcoin focusing on fast and cheap transactions, but I couldn't be more wrong.

Altcoins work as leveraged instruments both on the way up and down, and this is what people like about them, no matter how crappy they may seem. All that matters is to enter and exit with a profit and people then shift to another coin.

right... but just because it carries on regardless, doesn't make it viable. In this overall growth phase, new participants are literally queuing up to behave this exact same way over and over, but there's no such thing as infinite growth Smiley the maturing of the market, a viable sidechain protocol, or both of the former would kill this particular behavior pattern


Unless a sidechain can earn you dollars then alts have absolutely nothing to worry about. That's the only reason most of them exist and that's the only reason most people are here.

And it's not as if alts are being used for any actual purposes. If you were serious about your purpose you wouldn't be using one.

No, you've misunderstood

The reason that HairdryerCoin or ElbowCoin fail isn't just because they're a cynical marketing gimmick. Very infrequently, someone actually comes up with a genuine purpose-based concept that Bitcoin wasn't designed for. Namecoin is (was) a perfect example: a special new .bit domain name ecosystem, where ICANN and FBI: World Police have literally zero legitimacy, which is resistant to censorship/takedowns (Tor .onions less so) and with which domains can also be bought and sold as a function of the network (Tor .onions cannot do this without trust issues)

But truly good concepts for purpose specific tokens also fail, because attracting hashpower is not easy, and makes them vulnerable to 51% attacks from bigger coins using the same hash type. If only there was some way to put these good concepts for purposed tokens under so much hashing protection that that problem went away.... aaaand can you say "hello sidechains"? Cheesy But as outlined, no-one's found a safe/viable design for that, yet

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October 23, 2019, 01:17:35 PM
 #15

If only there was some way to put these good concepts for purposed tokens under so much hashing protection that that problem went away.... aaaand can you say "hello sidechains"? Cheesy But as outlined, no-one's found a safe/viable design for that, yet

That has already proven to be a non issue. Any token launched on Ethereum enjoys the security of it's immensely powerful network, and that security is something that you as project or business can tap into nearly for free, hence the reason most serious projects and businesses launch on Ethereum and not on garbage platforms such as EOS or TRON.
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October 23, 2019, 02:07:40 PM
 #16

right, Ethereum can act as a base chain for other chains, Bitcoin was never designed to (and so 5 years later, only 1 very simple centralised Bitcoin sidechain exists, where you have to trust 1 company to use it).

Although in fairness, Ethereum has made alot of adjunct design compromises that have made it a centralised system at that base layer; trying to run an Ethereum node is a massive task, and would be very painful and frustrating to start from zero today (I think you'd need months of work figuring out why the chain won't validate this or that section, it's a nightmare task apparently). In practice, Ethereum is a cartelized coin at this point, and there's no way back from that

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October 23, 2019, 06:37:59 PM
 #17

Well if these sidechains can get moving now, great. If not, I'll be pretty okay actually. Back when I first heard about them, there was very little mainstream literature beyond talking about potential. I always thought that if rootstock, for instance, just made one very useful smart contract for escrowing bitcoin, and made it work well, that would get things going. Maybe that time will come soon?

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October 23, 2019, 11:35:44 PM
 #18

Although in fairness, Ethereum has made alot of adjunct design compromises that have made it a centralised system at that base layer; trying to run an Ethereum node is a massive task, and would be very painful and frustrating to start from zero today (I think you'd need months of work figuring out why the chain won't validate this or that section, it's a nightmare task apparently). In practice, Ethereum is a cartelized coin at this point, and there's no way back from that

Right. That's why you got to like how simple Bitcoin is. It's designed to do one task extremely well, and that's also what it does, while Ethereum has been designed to do multiple tasks well, but the reality is that it does a mediocre job in most task areas. It also requires far more technical understanding of the inner workings of the protocol.

Running a Bitcoin full node is just a matter of downloading Core or another client, let it open and it does everything for you. It just takes a day or two to download and validate the data. No further attention needed from the user. Running an Ethereum client will freak you out if you are a simple user and just want to contribute by running a full node. Result is that no node will be running.
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October 23, 2019, 11:52:41 PM
 #19

This article show that Bitcoin is secured because of sidechains, But not good for altcoins and I don't believe altcoins is become zero value  in my own view altcoin is also important in the digital crypto currency as alternative form of money same of bitcoin. And I believe until people patronage the altcoins specially in top list coins not become zero value shitcoin is possible to become zero.
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October 24, 2019, 02:22:55 AM
 #20

The claim is that Bitcoin Sidechains can eventually make all altcoins lose value and purpose as this functionally can easily adopt all the features that altcoins may have rendering them, in essence, very worthless and inutile. "...new features that were sufficiently complex could come to Bitcoin by way of sidechains."


Now, whether this claim can happen or not depends a lot if Sidechains can be implemented soon and if the market will be reacting in the way it is expected.

Do you think that Sidechains has this potential or maybe the guys behind this proposition is just imagining things? Please share here what you may know about this Sidechains...







This is a very naive and a hopeful claim by bitcoin maximalists because, as they reckon, altcoins are stopping it from going on $1 million.

The cryptospace will always have altcoins. Developers will always make them, traders will always trade them, exchanges will always list them, bagholders will always hold them.

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