Gold collapsing. Bitcoin UP.

[Melbustus]

Seen this yet?

https://download.wpsoftware.net/bitcoin/alts.pdf

Of course, “developing your own cryptosystem” is the purview of only cranks and researchers, so it was reasonably assumed that none of these “altcoins”, as they were called, could ever be plausibly presented for public use.
Boy, were we ever wrong on that one.
...
If you are, or are planning to, develop and release an “altcoin” to the public, this document reminds you that you are playing with fire. This sort of behavior was cute on sci.crypt, a community populated mainly by cryptographic experts where there was no risk that your charlatanism would be mistaken for anything legitimate, and where there was no ability to store value in your scheme anyway.
...
The Bitcoin community differs in both those respects. Your crankery is not cute. You are not a cryptographer, and yet are releasing a homebrew cryptosystem, misrepresenting your own qualifications, and encouraging others to store value in your creation. These actions are incompetent, dishonest and reprehensibly dangerous.

lol.

That's Andrew Poelstra's "A Treatise on Altcoins". He's even harsher than many of us in this thread! He's also listed as an author on the sidechains whitepaper.

[justusranvier]

http://konradsgraf.squarespace.com/storage/Monetary%20analsyis%20of%20sidecoins%20KG%2024Oct2014.pdf

[cbeast]

http://konradsgraf.squarespace.com/storage/Monetary%20analsyis%20of%20sidecoins%20KG%2024Oct2014.pdf

Thanks, that is a clear explanation of Side Chains.

[brg444]

http://konradsgraf.squarespace.com/storage/Monetary%20analsyis%20of%20sidecoins%20KG%2024Oct2014.pdf

thank you.

very very helpful.

[brg444]

http://konradsgraf.squarespace.com/storage/Monetary%20analsyis%20of%20sidecoins%20KG%2024Oct2014.pdf

thank you.

very very helpful.

I guess these are more reasons to not worry about the potential for a sidechain to "takeover" Bitcoin.

[brg444]

https://vimeo.com/108437163

What terrible spokesperson these guys are.

"Bitcoin's monetary policy could change" Really !? Just cause you dropped a couple millions on Coinbase certainly does not make you an authority to speak on Bitcoin and utter such nonsense.

This video is so disappointing

[NewLiberty]

https://vimeo.com/108437163

What terrible spokesperson these guys are.

"Bitcoin's monetary policy could change" Really !? Just cause you dropped a couple millions on Coinbase certainly does not make you an authority to speak on Bitcoin and utter such nonsense.

This video is so disappointing

Yes, he was incorrect in his statement.  A consensus doesn't change Bitcoin total coins.
https://en.bitcoin.it/wiki/Prohibited_changes

A consensus, or even a constituency, easily could change to use a different coin instead, but is not free to change bitcoin on this matter.

[BldSwtTrs]

I don't understand how the peg will work.

Let's say 10 000 BTC are locked and give access to some sidecoin, if that Sidecoin is more succesful than BTC then the Sidecoin could be sell for more than the peg on the open market. If the sidecoin fail than the sidecoin holder can exit the sidechain and retreive their old BTC.

So basically a sidecoin is an option and there is a massive incentive to leave the BTC blockchain to the sidechain and enjoy you free option, so basically this will destroy Bitcoin. What I don't understand?

An altcoin could be created through a side chain using a non-deterministic exchange rate. If BTCs are pledged to that sidechain's altcoin then they are exposed to its exchange rate and volatility. In this scenario if the sidecoin fails than the holder CANNOT retrieve the same amount of BTC he put in, only the amount the exchange rate provides him in exchange for his failed coin.

My understanding is that the exchange rate BTC <> sidecoin will not float, only the exchange rate sidecoin <> fiat will float. Is that true?

If 10 000 BTC back 10 million units of sidecoin (so the fixe exchange rate is 1 BTC = 10 000 sidecoins) and that side-currency is deemed as crap by the free market (ie. the fiat exchange rate implies a valuation 1 BTC >10 000), then people will just doesn't sell their sidecoins on the free market and moved back to the BTC blockchain and take back their BTC.

Now if the free market loves a new feature of that sidecoin and the fiat exchange rate imply a 1BTC = 1 000 sidecoins rate, then people will have made a 10x profit.

So barring an improbable technical failure of the sidechain that would prevent to get back the BTC, people will have only benefits by exchanging bitcoins to sidecoins.

It's a lethal mechanism for Bitcoin. Imagine the size of the altcoin market if people were able to sell their bitcoins to buy altcoins while being able to reclaim the exact same initial amount of bitcoin if the said altcoin end up underperforming BTC.

[klee]

Can someone ask kindly Jeff to stop stalking NXT and Mr Maxwell his sidechains coding and both have a look at this:

http://t.co/eWNQq2h1Cx

??


WTF ? ? ? ?

[inca]

Can someone ask kindly Jeff to stop stalking NXT and Mr Maxwell his sidechains coding and both have a look at this:

http://t.co/eWNQq2h1Cx

??


WTF ? ? ? ?

I wonder how good the random number generation is with bitaddress.org. I cannot be alone in generating my cold storage addresses from that. Poor random number generation was always going to be the next attack vector to try and narrow down the bitcoin private key space. Only good can come from this.

[cypherdoc]

http://konradsgraf.squarespace.com/storage/Monetary%20analsyis%20of%20sidecoins%20KG%2024Oct2014.pdf

thank you.

very very helpful.

not at all. The discussion in this thread have moved way beyond the limited concepts in that paper.

[faince222]

Good to hear this. Bitcoin is future of currency, and I give to it some trust, but I not appreciate so much volatility of this ultimate. It's because I have some gold in my investment portfolio..

[Erdogan]

About pegging.

To have pegging, there must be an authority that guarantees the peg to the main coin.

The tool is to have a reserve, so you can buy from one with the other and vice versa.

The reserve is always less than the full value of the pegged currency. Else there would be no point, from the authority's point of view. The point is to extract the inflation tax on the users of the sidecoin.

The peg is instituted for a coin that is of risk to lose all value. To inject trust in the sidechain, the authority starts the peg.

The peg is in practise not exact, it is a band with a lower and upper limit. Else there is opportunity for others to front run the pegging transactions and extract value from the authority. For the same reason, the exact limits are often not public.

Since the authority controls the volume of the sidecoins, their volume can also be increased or decreased. Decrease means taxing and destroying sidecoins, this is not helpful for the authority. Increasing the numbers can also be used. Increase is possible when the sidecoin demand increases (economy increases), and when the main coin volume increases (thus inflation tax goes to the sidecoin authorities in stead of to the main coin authorities).

Bad management, decrease of sidecoin demand due to shrinking economy, or random external shocks can destroy the peg. In that case, the sidecoin quickly looses value and stays there.

A new peg can then be instituated at a lower level.

[sickpig]

About pegging.

To have pegging, there must be an authority that guarantees the peg to the main coin.

An authority? Made of people?

[Odalv]

This is a soft fork change, which means any single miner can choose to adopt it and remain compatible with the existing infrastructure.  Other miners won't add the new transactions since they are "nonstandard", but they will validate blocks containing them.

Can someone explain how this works. I didn't follow it in the paper and I don't have time to read it more carefully right now.

If a new opcode is added for coin return how will existing nodes validate that transactions unlocking coins using an opcode they don't understand are valid?

I think yes, this opcode is NO_OPERATION. But if this transaction is invalid then majority (who perform a real check) will refuse his block.

[sickpig]

Can someone ask kindly Jeff to stop stalking NXT and Mr Maxwell his sidechains coding and both have a look at this:

http://t.co/eWNQq2h1Cx

??


WTF ? ? ? ?

Is Jeff still listing on twitter and elsewhere all what he thinks are nxt weaknesses? I thought he was done with it.

Having said that all the links contained in the above post show how a bad implementation can ruin also the best crypto idea. More to the point I don't think gmaxwell has to check all wallet implementations around the globe.

If you're interested in this kind of narrative look at this s djb presentation:

http://cr.yp.to/talks/2014.10.18/slides-djb-20141018-a4.pdf

[cbeast]

Can someone ask kindly Jeff to stop stalking NXT and Mr Maxwell his sidechains coding and both have a look at this:

http://t.co/eWNQq2h1Cx

??


WTF ? ? ? ?

Is Jeff still listing on twitter and elsewhere all what he thinks are nxt weaknesses? I thought he was done with it.

Having said that all the links contained in the above post show how a bad implementation can ruin also the best crypto idea. More to the point I don't think gmaxwell has to check all wallet implementations around the globe.

If you're interested in this kind of narrative look at this s djb presentation:

http://cr.yp.to/talks/2014.10.18/slides-djb-20141018-a4.pdf

Devs don't need to watch a sales pitch. Just show the code. Ok, next.

[Zangelbert Bingledack]

I'm beginning to doubt Maxwell (nullc) has a grasp on the economics of money as a ledger, and he seemed like the best of the sidechain team on the economic aspects. This seems like a basic error:

http://www.reddit.com/r/Bitcoin/comments/2k7xwj/aantonop_sidechains_could_unleash_even_more/cliw3mi

What if sidechains, or a large part of their motivation, comes from not understanding the idea of spin-offs? Peter R has in places proposed spin-offs as a way to bootstrap an altcoin launch, but the relevance here is they serve many or perhaps even all the functions of sidechains, but without need to mess with Bitcoin.

I get a general sense from the sidechain crew that they don't understand Bitcoin as ledger, that the ledger is what matters, and that the protocol is secondary. To them, as coders, it must seem like the ledger and protocol are inextricably linked, but if you take Money as Memory seriously, the ledger is something outside the protocol and is merely updated by it. Understanding spin-offs requires fully internalizing this insight, and that is what I see no evidence of from the sidechain team.

[brg444]

http://konradsgraf.squarespace.com/storage/Monetary%20analsyis%20of%20sidecoins%20KG%2024Oct2014.pdf

thank you.

very very helpful.

not at all. The discussion in this thread have moved way beyond the limited concepts in that paper.

 

surely I didn't hurt your feelings so much that you would argue with me for the sake of arguing

please let's keep it civilized. the paper was a worthy contribution and certainly helped clear out some misconceptions. that's it.

[brg444]

My understanding is that the exchange rate BTC <> sidecoin will not float, only the exchange rate sidecoin <> fiat will float. Is that true?

If 10 000 BTC back 10 million units of sidecoin (so the fixe exchange rate is 1 BTC = 10 000 sidecoins) and that side-currency is deemed as crap by the free market (ie. the fiat exchange rate implies a valuation 1 BTC >10 000), then people will just doesn't sell their sidecoins on the free market and moved back to the BTC blockchain and take back their BTC.

Now if the free market loves a new feature of that sidecoin and the fiat exchange rate imply a 1BTC = 1 000 sidecoins rate, then people will have made a 10x profit.

So barring an improbable technical failure of the sidechain that would prevent to get back the BTC, people will have only benefits by exchanging bitcoins to sidecoins.

It's a lethal mechanism for Bitcoin. Imagine the size of the altcoin market if people were able to sell their bitcoins to buy altcoins while being able to reclaim the exact same initial amount of bitcoin if the said altcoin end up underperforming BTC.

It seems you are again confusing two ideas of the sidechains.

IF a sidecoin is created through a sidechain, then yes the sidecoin will have a free floating market exchange rate. If people pledge their BTC to that sidecoin then they are effectively buying an altcoin. If this sidecoin tanks then they CANNOT reclaim the exact same initial amount of BTC they "invested".

Remember, implementation of new features in sidechains do not require creation of an alternative currency.