(Ordinals) BRC-20 needs to be removed

[LoyceV]

By using the same words, you could also say that about Lightning Network: "on-chain Bitcoins are locked" (behind 2-of-2 multisig), and also "then an equivalent amount of tokens are minted" (but here, it may be even worse, because of conversions between satoshis and millisatoshis, so you can "create millisatoshis out of thin air", because you cannot finalize them on-chain in the current version).

I don't care about millisatoshis, and I'm totally find rounding them when settling on-chain. That's franky's thing to bring up, and it's kinda pointless to even discuss if you pay an on-chain transaction fee that's a million times larger. And that's the problem with LN: I know it's locked, but what's the point if you can't afford the fee for on-chain settlement?

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[Wind_FURY]

But from my understanding of how the two-way peg works in sidechains is, on-chain Bitcoins are locked, then an equivalent amount of tokens are minted in the sidechain representing Bitcoin.

By using the same words, you could also say that about Lightning Network: "on-chain Bitcoins are locked" (behind 2-of-2 multisig), and also "then an equivalent amount of tokens are minted" (but here, it may be even worse, because of conversions between satoshis and millisatoshis, so you can "create millisatoshis out of thin air", because you cannot finalize them on-chain in the current version).

So, if you would have 2-of-2 multisig addresses on the sidechain, then what would be the difference? Because obviously, if you would have single-key addresses on the sidechain, then coins could be easily turned into IOU. However, if you would use exactly the same bytes as in LN, then where is the moment, when it is "not Bitcoin"?

OK, the frankandbeans debate.

I'm the stupid one in the forum, and I actually want to learn from the point you're making. Teach me. How are the Bitcoins in those payment channels in Lightning "IOUs"? Where/how are the coins stored/locked and how are the "IOUs" issued?

The argument is rather than have an IOU representing a coin, I would like to have the actual coin.

It only depends on your spending conditions. If you have single-key address, then it can be turned into IOU, but it also has some use cases (for example as a test network). However, if you use the same scripts, as in LN, then where is that IOU?

I don't know. But, I'm confused, kindly explain to me how a Bitcoin-pegged-coin in a sidechain is an actual Bitcoin. What is the process of on-ramping Bitcoin in a sidechain, and what is the process of on-ramping Bitcoin in the Lightning Network.

[vjudeu]

That's franky's thing to bring up, and it's kinda pointless to even discuss if you pay an on-chain transaction fee that's a million times larger.

Yes, but it is not about the amount, but about the ownership: if you want to have millisatoshis on-chain, then in the current version, you can only have a large multisig, behind a single satoshi, so if you have 500 millisatoshis from Alice, and the same from Bob, then all you can do, is to use 2-of-2 multisig on a single satoshi.

How are the Bitcoins in those payment channels in Lightning "IOUs"?

I think they are not. But if people say that coins in sidechains are, then coins in LN should also be called in the same way, if we follow the same logic.

Where/how are the coins stored/locked and how are the "IOUs" issued?

You have IOUs only in centralized sidechains. For example: if you have a sidechain, where you have some large multisig, and you cannot be a miner, if you are not a part of some closed group, then those coins are IOUs. However, if you have decentralized sidechain, then you can use any scripts you want, because every block is covered only by hashrate, and not by some centrally-selected signature, like in signet.

But, I'm confused, kindly explain to me how a Bitcoin-pegged-coin in a sidechain is an actual Bitcoin.

1. If you have to provide a valid signature for a given coin, to transfer it from mainchain into sidechain, then it is based on real coins, and not some "coins created out of thin air".
2. If you have to move a given coin on the mainchain, to bring it back from the sidechain to the mainchain, then it is the same situation as with LN: you can always peg-out, without asking for anyone's permission.

And those two things alone: sign things to peg them in, and move them to peg them out, is sufficient to make a test network for decentralized sidechains. However, if you want to get the main network, then it is all about creating rules for the scripts, used to lock your coins. Which means, that if you have a single-key address, then you can test it alone, but no sane person will accept some coins, if the sender can always take them back, without losing anything. For that reason, the basic building block for decentralized sidechains is N-of-N multisig, where you can have a lot of people behind a single UTXO. And then, all kinds of improvements are focused on making "emergency scripts", to for example not require all N participants to be online, to change the state of the sidechain.

Because if you would have for example non-interactive transaction joining, then a single Taproot UTXO is all you need, to handle a single decentralized sidechain. And then, it is all about combining all signatures from that sidechain, and finalizing it as a simple commitment on-chain, which would have a constant size, regardless of how many people will use a given sidechain.

What is the process of on-ramping Bitcoin in a sidechain, and what is the process of on-ramping Bitcoin in the Lightning Network.

It didn't change that much since the last time, when I wrote about it: https://bitcointalk.org/index.php?topic=5231460.msg61778369#msg61778369

[LoyceV]

Yes, but it is not about the amount, but about the ownership: if you want to have millisatoshis on-chain, then in the current version, you can only have a large multisig, behind a single satoshi, so if you have 500 millisatoshis from Alice, and the same from Bob, then all you can do, is to use 2-of-2 multisig on a single satoshi.

Why do you even care about receiving 0.5 sat from anyone? I don't care about fractions of cents, even though half a cent is worth a lot more than a whole satoshi. The exchanges I use count cents behind the decimal, and if I close my account, I lose them. That's fine.

2. If you have to move a given coin on the mainchain, to bring it back from the sidechain to the mainchain, then it is the same situation as with LN: you can always peg-out, without asking for anyone's permission.

If pegging out costs you $100 in transaction fees, it's only worth it for large amounts. Most people won't want to do it several times per month. That's rent money or food money.

[Wind_FURY]

How are the Bitcoins in those payment channels in Lightning "IOUs"?

I think they are not. But if people say that coins in sidechains are, then coins in LN should also be called in the same way, if we follow the same logic.

Where/how are the coins stored/locked and how are the "IOUs" issued?

You have IOUs only in centralized sidechains. For example: if you have a sidechain, where you have some large multisig, and you cannot be a miner, if you are not a part of some closed group, then those coins are IOUs. However, if you have decentralized sidechain, then you can use any scripts you want, because every block is covered only by hashrate, and not by some centrally-selected signature, like in signet.

OK, I actually have MANY questions for you. But before we go further, you're describing something like Paul Sztorc's Drivechains - BIP-300/ BIP-301?

But, I'm confused, kindly explain to me how a Bitcoin-pegged-coin in a sidechain is an actual Bitcoin.

1. If you have to provide a valid signature for a given coin, to transfer it from mainchain into sidechain, then it is based on real coins, and not some "coins created out of thin air".

2. If you have to move a given coin on the mainchain, to bring it back from the sidechain to the mainchain, then it is the same situation as with LN: you can always peg-out, without asking for anyone's permission.

And those two things alone: sign things to peg them in, and move them to peg them out, is sufficient to make a test network for decentralized sidechains. However, if you want to get the main network, then it is all about creating rules for the scripts, used to lock your coins. Which means, that if you have a single-key address, then you can test it alone, but no sane person will accept some coins, if the sender can always take them back, without losing anything. For that reason, the basic building block for decentralized sidechains is N-of-N multisig, where you can have a lot of people behind a single UTXO. And then, all kinds of improvements are focused on making "emergency scripts", to for example not require all N participants to be online, to change the state of the sidechain.

Because if you would have for example non-interactive transaction joining, then a single Taproot UTXO is all you need, to handle a single decentralized sidechain. And then, it is all about combining all signatures from that sidechain, and finalizing it as a simple commitment on-chain, which would have a constant size, regardless of how many people will use a given sidechain.

Although, who secures the decentralized sidechains, and I assume that they follow different consensus rules? I believe the answer to "If it's Bitcoin?", that's where everything starts to be more complicated

Plus is it possible for a sidechain to fork away from Bitcoin, and never return?

[vjudeu]

But before we go further, you're describing something like Paul Sztorc's Drivechains - BIP-300/ BIP-301?

Yes, something like that.

who secures the decentralized sidechains

The same miners, which secure Bitcoin. It is based on Merged Mining.

and I assume that they follow different consensus rules?

All new rules are expressed as a combination of existing ones, which means, that all mainchain rules are followed.

I believe the answer to "If it's Bitcoin?", that's where everything starts to be more complicated

The basic rules are simple: you sign your coins to peg them in, and move them to peg them out. And of course, it is Bitcoin, because every signature is compatible with Bitcoin. And if you have something new, then it is expressed as a combination of existing rules. If you think that it is not Bitcoin, then it applies to LN as well (because the main difference is that you don't have to open a channel, if you already have some shared output, and you can reuse existing LN transactions on such sidechain).

Plus is it possible for a sidechain to fork away from Bitcoin, and never return?

It depends, which forks you have in mind. When it comes to hard forks, then you can apply that on each and every coin, including Bitcoin, and you have some altcoins, which did exactly that (but it is not possible to stop anyone from trying to do, what for example BCH did). But if you think about soft-forks or no-forks, then things could co-exist, without losing a peg. Because it is all about following the chain of signatures: if you have a signature, that is valid on Bitcoin, and on the sidechain at the same time, then you cannot really tell, that "it forked away", because you can see exactly the same chain of signatures in both networks.

Even more interesting things are possible: if some altcoin or sidechain preserved enough rules, then you can recreate the same chain of signatures in both networks, if you reach identical coinbase transactions. Because their uniqueness is based only on a block number, and not for example on block hashes, so things can be duplicated. Some example: https://bitcointalk.org/index.php?topic=5479988.msg63437260#msg63437260

Which means, that "and never return?" is never the case, because there are no technical issues with recreating a peg in those chains, which lost it in the past. But the community just don't want to get that feature, which is why nobody implemented it. There is even a page about blockchain fusion, if you are interested: https://www.truthcoin.info/blog/blockchain-fusion/

[sherlockphone]

And at this point, how to fix the problem? those of us who maintain nodes could have the option to accept or not these ordinals? or is it up to the miners?