Gold collapsing. Bitcoin UP.

[smooth]

If altcoins are not being considered for SC's, why do they dedicate a paragraph to Freicoin in the Economic part of the paper?

Some altcoins are more equal than others.

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[HeliKopterBen]

That would only work if ALL users decided to move to SCbtc and no user wanted to buy BTC under any circumstances, even with spreads in the thousands of dollars or more.  If the tech were that far superior then SCbtc deserves to win out.  In reality, there will most likely be debate over which system is better and not all users will convert, resulting in normal arbitration.

People would certainly buy BTC if scBTC were worth more, but only at something less than the scBTC value in order to convert it and make a profit. There would be no reason to convert back

Yes there is reason to convert back.  You sell the scBTC at a profit and take the profit and buy more BTC to convert.  Rinse and repeat.

No that doesn't work once all the BTC are converted. The only ones you could possibly find to buy for conversion would be newly mined coins, and miners would have no reason to sell them to you. They can just convert themselves (which is what they would do).

The arbitrage you is exactly what would happen, but it would quickly convert all the BTC until there were none left, then the main chain would simply die (other than for mining purposes).

That is a bold assumption, pun intended.  If I had a satoshi for every time someone said the price of bitcoin could go to 0, then I would be rich... as I said before, if the technology of SCbtc is that great, then it deserves to win.

I never said the price goes to zoro. The price would be approximately the same as scBTC, obviously, since you can convert. There would just be no reason to hold BTC. If scBTC offers some advantage to enough people, you might as well convert it.

You said if all the bitcoin are converted.  If all the bitcoin are converted that means there are no more sellers left and the price is zero because no more trade is possible in bitcoin.  

If the price is non-zero that means there are sellers of bitcoin, which also means arb channels are open.  The only way the channels can close is if it either the price of BTC or SCBTC goes to zero.

[justusranvier]

If altcoins are not being considered for SC's, why do they dedicate a paragraph to Freicoin in the Economic part of the paper?

Some altcoins are more equal than others.

It's kind of embarrassing that certain people keep clinging to the idea of demurrage, in spite of the fact that Freicoin conclusively proved that nobody wants self-destructing money.

[cypherdoc]

If altcoins are not being considered for SC's, why do they dedicate a paragraph to Freicoin in the Economic part of the paper?

Some altcoins are more equal than others.

It's kind of embarrassing that certain people keep clinging to the idea of demurrage, in spite of the fact that Freicoin conclusively proved that nobody wants self-destructing money.

What's embarrassing is brg444 continuing to promise that no altcoins will be considered in SC's when there is an entire section dedicated to them in the paper.

[smooth]

That would only work if ALL users decided to move to SCbtc and no user wanted to buy BTC under any circumstances, even with spreads in the thousands of dollars or more.  If the tech were that far superior then SCbtc deserves to win out.  In reality, there will most likely be debate over which system is better and not all users will convert, resulting in normal arbitration.

People would certainly buy BTC if scBTC were worth more, but only at something less than the scBTC value in order to convert it and make a profit. There would be no reason to convert back

Yes there is reason to convert back.  You sell the scBTC at a profit and take the profit and buy more BTC to convert.  Rinse and repeat.

No that doesn't work once all the BTC are converted. The only ones you could possibly find to buy for conversion would be newly mined coins, and miners would have no reason to sell them to you. They can just convert themselves (which is what they would do).

The arbitrage you is exactly what would happen, but it would quickly convert all the BTC until there were none left, then the main chain would simply die (other than for mining purposes).

That is a bold assumption, pun intended.  If I had a satoshi for every time someone said the price of bitcoin could go to 0, then I would be rich... as I said before, if the technology of SCbtc is that great, then it deserves to win.

I never said the price goes to zoro. The price would be approximately the same as scBTC, obviously, since you can convert. There would just be no reason to hold BTC. If scBTC offers some advantage to enough people, you might as well convert it.

You said if all the bitcoin are converted.  If all the bitcoin are converted that means there are no more sellers left and the price is zero because no more trade is possible in bitcoin.  

No trade does not mean the price is zero, it simply means there is trade. For example, in a speculative market you would get no trading if everyone agrees on the same price.

Anyway, as I said mining would still happen, and you could potentially buy from miners, but only at better price than what they could get by converting to higher-valued scBTC. There is no arbitrage though, the mining rewards would simply be sought out for their conversion value and miners would compete harder for them, driving up difficulty.

[smooth]

It's kind of embarrassing that certain people keep clinging to the idea of demurrage, in spite of the fact that Freicoin conclusively proved that nobody wants self-destructing money.

One example does not prove this at all. It simply proved that no one wanted Freicoin. They might want something else with that property, but with some other differences.

[cbeast]

If altcoins are not being considered for SC's, why do they dedicate a paragraph to Freicoin in the Economic part of the paper?

I still haven't heard a good excuse for core dev concentration in one for profit company other than "trust us".

Again,  why wouldn't we expect a SC fork of bitcoin with perfect anonymity to take over? 

I love the idea, but I don't get how a dark 1:1 pegged SC can have a security incentive if you are only mining for fees.

[justusranvier]

One example does not prove this at all. It simply proved that no one wanted Freicoin. They might want something else with that property, but with some other differences.

I have to agree with Daniel on this one. He proved fairly rigorously why demurrage-based currencies must fail, and nobody has produced a refutation stronger than, "Maybe if I hope hard enough it will work!!!"

http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/

Freicoin is an idea whose time will never come. Since it rebukes buyers, it resists ever having value. Freicoin is thus not so much a scam but more an abortion. Its ideals are so refined that they eschew the merest chance of affecting the real world. Perhaps it could be taken as some sort of absurdist parody, which would be brilliant. I hope that is true because otherwise it is just too sad.

[smooth]

One example does not prove this at all. It simply proved that no one wanted Freicoin. They might want something else with that property, but with some other differences.

I have to agree with Daniel on this one. He proved fairly rigorously why demurrage-based currencies must fail, and nobody has produced a refutation stronger than, "Maybe if I hope hard enough it will work!!!"

http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/

Freicoin is an idea whose time will never come. Since it rebukes buyers, it resists ever having value. Freicoin is thus not so much a scam but more an abortion. Its ideals are so refined that they eschew the merest chance of affecting the real world. Perhaps it could be taken as some sort of absurdist parody, which would be brilliant. I hope that is true because otherwise it is just too sad.

That's essentially identical to the frequent argument that deflationary currencies can't work because no one will spend them (or, in his words, it rebukes sellers). Both are wrong.

[cbeast]

One example does not prove this at all. It simply proved that no one wanted Freicoin. They might want something else with that property, but with some other differences.

I have to agree with Daniel on this one. He proved fairly rigorously why demurrage-based currencies must fail, and nobody has produced a refutation stronger than, "Maybe if I hope hard enough it will work!!!"

http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/

Freicoin is an idea whose time will never come. Since it rebukes buyers, it resists ever having value. Freicoin is thus not so much a scam but more an abortion. Its ideals are so refined that they eschew the merest chance of affecting the real world. Perhaps it could be taken as some sort of absurdist parody, which would be brilliant. I hope that is true because otherwise it is just too sad.

That's essentially identical to the frequent argument that deflationary currencies can't work because no one will spend them (or, in his words, it rebukes sellers). Both are wrong.

Gold is deflationary, manure rots like demurrage. Try spending manure.

[justusranvier]

That's essentially identical to the frequent argument that deflationary currencies can't work because no one will spend them (or, in his words, it rebukes sellers). Both are wrong.

Your statement is only true if we don't care about reality. Or truth.

Both of these theories have been empirically tested, and only one of them demonstrated to be true.

[brg444]

If altcoins are not being considered for SC's, why do they dedicate a paragraph to Freicoin in the Economic part of the paper?

I still haven't heard a good excuse for core dev concentration in one for profit company other than "trust us".

Again,  why wouldn't we expect a SC fork of bitcoin with perfect anonymity to take over?  

Who said so? The paper does suggest another altcoin can be spun off a sidechain. The difference is it also clearly states this is not where the ground for innovation lays. Altchain backed by BTC currency is what is important here. You chose to focus on the altcoin as if Blockstream's motivation is to create an altcoin using a sidechain which they have specifically explained why they have no interest and little purpose doing so.

I still have yet to see you come up with a good incentive for core dev to maliciously fork Bitcoin in a way that would advantage them.

No one is denying the existence of an apparent "conflict of interest". But like in all things Bitcoin you have to consider in an honest way what truly could go wrong.

How long will you ignore the concept of open source and distribution? What else do I need to say to explain to you that a SC fork is bound to fail?

Again,  why wouldn't we expect a SC fork of bitcoin with perfect anonymity to take over?  

To entertain your scenario the network then would be left with two options to consider.

1) The hypothetic Blockstream "pre-mined" altcoin
2) The community fork of the exact same altcoin with fairer distribution (hint : 1:1 peg)

Remember that a Bitcoin-like first mover advantage is inexistent in that case because of the open source development.

What's embarrassing is brg444 continuing to promise that no altcoins will be considered in SC's when there is an entire section dedicated to them in the paper.

What is embarassing is your continuing stubbordness in front of facts and arguments.

Did you read my post at all? Is there anything you would like to argue?

Do you not understand the idea that Sidechain are not an inherent threat to Bitcoin since Bitcoin is the parent chain?

You have repeatedly supported the idea in this thread that altcoins can barely make a dent into Bitcoin yet packaged in a sidechain you are somehow worried it could threaten it?

Do you recognize that scBTC have the SAME network effect challenge than any other altcoin?

[smooth]

One example does not prove this at all. It simply proved that no one wanted Freicoin. They might want something else with that property, but with some other differences.

I have to agree with Daniel on this one. He proved fairly rigorously why demurrage-based currencies must fail, and nobody has produced a refutation stronger than, "Maybe if I hope hard enough it will work!!!"

http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/

Freicoin is an idea whose time will never come. Since it rebukes buyers, it resists ever having value. Freicoin is thus not so much a scam but more an abortion. Its ideals are so refined that they eschew the merest chance of affecting the real world. Perhaps it could be taken as some sort of absurdist parody, which would be brilliant. I hope that is true because otherwise it is just too sad.

That's essentially identical to the frequent argument that deflationary currencies can't work because no one will spend them (or, in his words, it rebukes sellers). Both are wrong.

Gold is deflationary, manure rots like demurrage. Try spending manure.

People sell manure all the time. It's a huge industry. That is the same as spending.

[smooth]

That's essentially identical to the frequent argument that deflationary currencies can't work because no one will spend them (or, in his words, it rebukes sellers). Both are wrong.

Your statement is only true if we don't care about reality. Or truth.

Both of these theories have been empirically tested, and only one of them demonstrated to be true.

Apparently you are a bit logic challenged. One example consistent with a premise does not "demonstrate" the premise to be true.

[cbeast]

I've been trying to wrap my head around the SC debate. I can only see a 1:1 peg working without it becoming an altcoin because fractional reserve. Transactions only supported by fees would preclude using them for micro-transactions. Competition for mining for the fees would reach equilibrium with Bitcoin mining. There's not much advantage to them except for minimal counterparty risk.

It sounds like a fairly safe way to create a decentralized exchange for designing Bitcoin's replacement.

[brg444]

If altcoins are not being considered for SC's, why do they dedicate a paragraph to Freicoin in the Economic part of the paper?

I still haven't heard a good excuse for core dev concentration in one for profit company other than "trust us".

Again,  why wouldn't we expect a SC fork of bitcoin with perfect anonymity to take over?  

I love the idea, but I don't get how a dark 1:1 pegged SC can have a security incentive if you are only mining for fees.

It will happen. There are plenty of good reason for a sidechain to use the anonymity feature of, say, Monero. What cypher fails to consider here is that a new currency is not necessary for this to exist. The altchain will leverage Bitcoin's currency and benefit from its network effect.

Improved payer privacy, e.g. the ring signature scheme used by Monero, can reduce the systemic risk of the transactions of particular parties being censored, protecting the fungibility of the cryptocurrency. Improvements to this have been suggested by Maxwell and Poelstra
400 [MP14, Poe14b] and Back[Bac13a], which would allow for even greater privacy. Today, ring signatures can be used with Monero coins, but not bitcoins; sidechains would avoid this exclusivity

I'm not sure about your security incentive question. Merge mining allows for hashing power of BTC to be shared with the anonymous altchain in a trivial way.

So tell me cypherdoc, what is more likely to catch on?

A 1:1 pegged sidechain with anonymity features or an anonymous sidechain issuing its own currency distributed in some malicious, hypothetic way that would benefit the Blockstream developer?

IIRC pre-mines have never really been popular or successful.

[brg444]

Transactions only supported by fees would preclude using them for micro-transactions. Competition for mining for the fees would reach equilibrium with Bitcoin mining. There's not much advantage to them except for minimal counterparty risk.

1:1 pegged sidechains using bitcoins has currency are not "only supported by fees".

Miners are essentially reward by the usual BTC issuance and additional transactions from sidechains

[cbeast]

Transactions only supported by fees would preclude using them for micro-transactions. Competition for mining for the fees would reach equilibrium with Bitcoin mining. There's not much advantage to them except for minimal counterparty risk.

1:1 pegged sidechains using bitcoins has currency are not "only supported by fees".

Miners are essentially reward by the usual BTC issuance and additional transactions from sidechains

Where are the block rewards bitcoin backing coming from if the chain is 1:1?

[brg444]

Transactions only supported by fees would preclude using them for micro-transactions. Competition for mining for the fees would reach equilibrium with Bitcoin mining. There's not much advantage to them except for minimal counterparty risk.

1:1 pegged sidechains using bitcoins has currency are not "only supported by fees".

Miners are essentially reward by the usual BTC issuance and additional transactions from sidechains

Where are the block rewards bitcoin backing coming from if the chain is 1:1?

From the Bitcoin blockchain.

So if I understand this correctly, think of the altchains as a multi-sig wallet.

If you wish to use some features of a sidechain (anonymity) you would essentially lock them to the altchain. From there, they would move within the altchain blockchain until you unlock them back to BTC. Any unit in the altchain is essentially a bitcoin that has been locked into the altchain. There is no issuance of new coins, no distribution model.

[cbeast]

Transactions only supported by fees would preclude using them for micro-transactions. Competition for mining for the fees would reach equilibrium with Bitcoin mining. There's not much advantage to them except for minimal counterparty risk.

1:1 pegged sidechains using bitcoins has currency are not "only supported by fees".

Miners are essentially reward by the usual BTC issuance and additional transactions from sidechains

Where are the block rewards bitcoin backing coming from if the chain is 1:1?

From the Bitcoin blockchain.

So if I understand this correctly, think of the altchains as a multi-sig wallet.

If you wish to use some features of a sidechain (anonymity) you would essentially lock them to the altchain. From there, they would move within the altchain blockchain until you unlock them back to BTC. Any unit in the altchain is essentially a bitcoin. There is no issuance of new coins, no distribution model.

Right. Then there is no mining in the SC? How are SC blockchains built?