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brg444
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October 27, 2014, 09:16:06 PM
 #14701


You are being really disingenous again.

Did Satoshi warn about the dangers of altscams in the Bitcoin white paper?

and you're just being a shill again trying to discredit anyone who is asking good questions.

what does Satoshi have to do with what i would believe to be an expected disclaimer warning to moving one's BTC to a SC?

If you return to the AMA I believe there is one instance of one of the devs essentially recognizing the possibility of malicious implementations of sidechains.

My point is this should be obvious to most that are even considering the technology of sidechain at this stage.

A fool and his money are soon parted, whether it's in BTC, sBTC or altscam. There is no reason for Gmaxwell to specifically go out of his way to *disclaim* the possibility of malicious uses of sidechains.

It'd just be a gift from suckers investing in unstable sidechain schemes to the rest of the bitcoin holders. Same as Counterparty's burning of bitcoins for XCP, except with Counterparty it was known that there was no way to get the coins back in the first place.

exactly

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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October 27, 2014, 09:18:52 PM
 #14702

A fool and his money are soon parted, whether it's in BTC, sBTC or altscam. There is no reason for Gmaxwell to specifically go out of his way to *disclaim* the possibility of malicious uses of sidechains.

I think there is. Altcoins get criticized constantly for not warning people enough about the risks involved, and therefore contributing to people losing money. Bitcoin developers should not get a pass on doing the exact same thing.

In my opinion sidechains (by which I mean locks that are contingent on actions of another chain) are a valuable extension of the Bitcoin functionality but they are also being hyped.


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October 27, 2014, 09:19:00 PM
 #14703

It seems we are again challenging our ideas of sidechains.

what's happening is again you're not understanding my questions.

presumably these scBTC will have a market price on an exchange, just like BTC.  so i ask again, would the price of scBTC on an independent exchange affect your assessment of how well the SC with its innovation is working?

no, what's happening is you don't understand the tech.

presumably, these scBTC if pegged 1:1 and properly implemented would have a market price closely correlated to BTC's from the jump. the price of BTC units on a sidechain is not dependent on whether the innovation is working or not

i do understand the tech.  it's you who do not understand the economics. 

it's perfectly reasonable to expect the price to differ in certain circumstances even in the presence of arbitrage.

well then if you do understand this I will say yes, of course, the correlation between market exchange rate and technical conversion rate will be considered in my review of sidechains. I fail to see the point of that question though considering the obvious answer.

ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not?  for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid?

second question, would transfer of a "significant number" of BTC to scBTC mean anything to you?

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October 27, 2014, 09:20:57 PM
 #14704

Who here has interpreted the SC paper to mean that you can get your BTC back from scBTC in the case of a SC failure?
I don't interpret it that way.

Before you can get your BTC back, you've got to perform burn transaction on the sidechain.

So if the sidechain ceases to function entirely, you have no way to generate the SPV proof that lets you claim your BTC.

But does the paper state that you have to perform this burn to get back or is that your interpretation of what has to happen?

Reason I ask is that many people seem to believe they can get back no matter what.
Many believe the exchange will be 1:1 over time and the SC won't can't  be inflated.

Are the sidechains "rules" not set in stone at its creation?

I am of the belief they will be but that fact doesn't stop consumers falling victim to deceit, given 99% of the people (pole stats reviewed @ 55 second into the clip)  who will adopt Bitcoin are unaware of the mechanism of inflation and how increasing the supply robs them of value, I don't see this ending well for Bitcoin.

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October 27, 2014, 09:22:29 PM
 #14705


You are being really disingenous again.

Did Satoshi warn about the dangers of altscams in the Bitcoin white paper?

and you're just being a shill again trying to discredit anyone who is asking good questions.

what does Satoshi have to do with what i would believe to be an expected disclaimer warning to moving one's BTC to a SC?

If you return to the AMA I believe there is one instance of one of the devs essentially recognizing the possibility of malicious implementations of sidechains.

My point is this should be obvious to most that are even considering the technology of sidechain at this stage.

A fool and his money are soon parted, whether it's in BTC, sBTC or altscam. There is no reason for Gmaxwell to specifically go out of his way to *disclaim* the possibility of malicious uses of sidechains.

It'd just be a gift from suckers investing in unstable sidechain schemes to the rest of the bitcoin holders. Same as Counterparty's burning of bitcoins for XCP, except with Counterparty it was known that there was no way to get the coins back in the first place.

exactly

i disagree.  

when Satoshi created Bitcoin, a BTC was worth $0. there was literally nothing to warn us about.

when Maxwell proposes a technical change to the source code of a market worth $5 Billion, i think he should be expected has a duty to warn us of all possibilities, negative or not.

you and i may be able to distinguish what's going on here in terms of a potential SC failure, but certainly the avg investor might not be.  and simply b/c there will be a market price for scBTC, one can assume uneducated investors will be tempted to buy them on an exchange.
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October 27, 2014, 09:26:08 PM
 #14706


Speaking of economics (or, more fundamentally, system analysis), one of the biggest issues of sidechains that I see has to do with the latency in exercising the two-way peg.

Sidechains can be assumed to be fairly small in total value relative to the total in BTC.  The distribution of wealth in Bitcoin means that there are plenty of whales.  If (or when) these folks decide to game things, they might be able to get some interesting oscillations riding on on the various sidechain pegs going.

In order to defend itself a sidechain is going to need to be able to anticipate these potentially significant threats and figure out buffering mechanism to isolate themselves.  Those who fail to do so in a proactive manner, or who implement ineffective protections, may be under very unwelcome influences.

The relatively high latency(theorized) of the two-way pegs may act as a natural buffer or be able to be leveraged as such.  One way or another I'll be paying some attention to how well the designers of a given sidechain have thought about this nature of attack mode.


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October 27, 2014, 09:26:46 PM
 #14707

ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not?  for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid?

second question, would transfer of a "significant number" of BTC to scBTC mean anything to you?

Correct, stability in their correlation could be one indication of a well designed and useful application.

As for your second question, I'm sorry but this is too early to answer considering I have no practical example to consider.

Of course, I would be extremely careful in considering the transfer of a significant amount of BTC to scBTC to as I have stated above this is the same approach I would take with an altcoin.

If the particular sidechain gains traction, offers a particularly interesting use case and has properly implemented code that is vetted by the community, is safe and protected from any malicious intent then if need be I could eventually feel safe doing so.

Like all things BTC, it is a matter of trust.

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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October 27, 2014, 09:36:34 PM
 #14708

ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not?  for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid?

second question, would transfer of a "significant number" of BTC to scBTC mean anything to you?

Correct, stability in their correlation could be one indication of a well designed and useful application.

As for your second question, I'm sorry but this is too early to answer considering I have no practical example to consider.

Of course, I would be extremely careful in considering the transfer of a significant amount of BTC to scBTC to as I have stated above this is the same approach I would take with an altcoin.

If the particular sidechain gains traction, offers a particularly interesting use case and has properly implemented code that is vetted by the community, is safe and protected from any malicious intent then if need be I could eventually feel safe doing so.

Like all things BTC, it is a matter of trust.

and you may not have the luxury of a practical example.

for instance, one of the first SC's i'd expect to pop up is a SC with perfect anonymity added as an innovation to a simple fork of Bitcoin with no initial coins and a 1:1 peg in place to accept incoming transfers of BTC to scBTC.

the question for you is, what if you saw significant #'s of BTC start moving into scBTC, what would you conclude?
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October 27, 2014, 09:39:24 PM
 #14709

i disagree.  

when Satoshi created Bitcoin, a BTC was worth $0. there was literally nothing to warn us about.

when Maxwell proposes a technical change to the source code of a market worth $5 Billion, i think he should be expected has a duty to warn us of all possibilities, negative or not.

you and i may be able to distinguish what's going on here in terms of a potential SC failure, but certainly the avg investor might not be.  and simply b/c there will be a market price for scBTC, one can assume uneducated investors will be tempted to buy them on an exchange.

Fair enough.

Although I don't see exactly how the danger differs much from altcoins. I also fail to see how GMaxwell warning the community of the dangers of sidechain scam will stop scammers from creating them and suckers from investing.. but yes maybe they should have been more straightforward regarding this possibility.

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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October 27, 2014, 09:40:19 PM
 #14710

Lets say we have a 1:1 sidecoin with properties that is good for microtransactions. To simplify, first consider the sidechain to be a company, where customers are the news suppliers, who should receive the money, and the readers, who should pay the money. In this first model, the company must be trusted. A reader sends amount-a to an address addr-a controlled by the company. We call it tx-a. Microtransactions ensue with multiple customers, and at some later time, the company sends addr-a containing amount-a to a new address controlled by the receiving news source.

The bitcoin protocol is ok with this, as long as all transactions are valid.

Now we enhance the example, where the company is replaced by the sidechain. The sidechain logic must create a receiving bitcoin address where the unlocking key is known by noone, and at the same time create a sidecoin address where the unlocking key is given to the news reader in the example. Microtransactions ensue, and after a while a news producer has the amount-a in the form of sxBTC. He then wants to destroy the scBTC and  receive his BTC. Let's just say it is a corresponding amount, it makes the example easier.

The problem of the sidechain logic is now to construct the hidden unlocking key of the output address addr-a of tx-a or another tx with the same amount. A new bitcoin transaction is created with address-a as input, and with a news-producer address as output. So seen from the bitcoin blockchain point of view, this is only two normal transactions. It has to be so, because bitcoin can not contain rules to validate transactions in the sidechain, that would be the same as extending the bitcoin protocol with the sidechain funtionality.

Is it possible to hide the bitcoin unlocking key in the sidechain like this? That is the question.


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October 27, 2014, 09:41:24 PM
 #14711

ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not?  for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid?

second question, would transfer of a "significant number" of BTC to scBTC mean anything to you?

Correct, stability in their correlation could be one indication of a well designed and useful application.

As for your second question, I'm sorry but this is too early to answer considering I have no practical example to consider.

Of course, I would be extremely careful in considering the transfer of a significant amount of BTC to scBTC to as I have stated above this is the same approach I would take with an altcoin.

If the particular sidechain gains traction, offers a particularly interesting use case and has properly implemented code that is vetted by the community, is safe and protected from any malicious intent then if need be I could eventually feel safe doing so.

Like all things BTC, it is a matter of trust.

and you may not have the luxury of a practical example.

for instance, one of the first SC's i'd expect to pop up is a SC with perfect anonymity added as an innovation to a simple fork of Bitcoin with no initial coins and a 1:1 peg in place to accept incoming transfers of BTC to scBTC.

the question for you is, what if you saw significant #'s of BTC start moving into scBTC, what would you conclude?

I would conclude the market has voted in favor of such a sidechain and with time, would feel comfortable using it?

Where are you trying to lead me? Stop beating around the bush

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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October 27, 2014, 09:42:22 PM
 #14712

ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not?  for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid?

second question, would transfer of a "significant number" of BTC to scBTC mean anything to you?

Correct, stability in their correlation could be one indication of a well designed and useful application.

As for your second question, I'm sorry but this is too early to answer considering I have no practical example to consider.

Of course, I would be extremely careful in considering the transfer of a significant amount of BTC to scBTC to as I have stated above this is the same approach I would take with an altcoin.

If the particular sidechain gains traction, offers a particularly interesting use case and has properly implemented code that is vetted by the community, is safe and protected from any malicious intent then if need be I could eventually feel safe doing so.

Like all things BTC, it is a matter of trust.

rofl. isnt there enough malicious intents on bitcoin itself already?
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October 27, 2014, 09:45:10 PM
 #14713

i disagree.  

when Satoshi created Bitcoin, a BTC was worth $0. there was literally nothing to warn us about.

when Maxwell proposes a technical change to the source code of a market worth $5 Billion, i think he should be expected has a duty to warn us of all possibilities, negative or not.

you and i may be able to distinguish what's going on here in terms of a potential SC failure, but certainly the avg investor might not be.  and simply b/c there will be a market price for scBTC, one can assume uneducated investors will be tempted to buy them on an exchange.

Fair enough.

Although I don't see exactly how the danger differs much from altcoins. I also fail to see how GMaxwell warning the community of the dangers of sidechain scam will stop scammers from creating them and suckers from investing.. but yes maybe they should have been more straightforward regarding this possibility.

thank you.

Maxwell has great standing within the community.  if the community were to listen to anyone, they would to him.  an open and honest warning from him would go a long way to helping us justify his desire to profit from the entire SC proposal.  anything less than that justifies guys like me talking.

and of course, scammers are going to be creating SC's left & right with a variety of deterministic pegs which invalidates the claim that SC's will somehow kill off altscams.
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October 27, 2014, 09:57:19 PM
 #14714

ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not?  for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid?

second question, would transfer of a "significant number" of BTC to scBTC mean anything to you?

Correct, stability in their correlation could be one indication of a well designed and useful application.

As for your second question, I'm sorry but this is too early to answer considering I have no practical example to consider.

Of course, I would be extremely careful in considering the transfer of a significant amount of BTC to scBTC to as I have stated above this is the same approach I would take with an altcoin.

If the particular sidechain gains traction, offers a particularly interesting use case and has properly implemented code that is vetted by the community, is safe and protected from any malicious intent then if need be I could eventually feel safe doing so.

Like all things BTC, it is a matter of trust.

and you may not have the luxury of a practical example.

for instance, one of the first SC's i'd expect to pop up is a SC with perfect anonymity added as an innovation to a simple fork of Bitcoin with no initial coins and a 1:1 peg in place to accept incoming transfers of BTC to scBTC.

the question for you is, what if you saw significant #'s of BTC start moving into scBTC, what would you conclude?

I would conclude the market has voted in favor of such a sidechain and with time, would feel comfortable using it?

Where are you trying to lead me? Stop beating around the bush

wonderful.  so we (you) have concluded that a rise in the price of scBTC relative to BTC AND a movement of significant #'s of BTC into scBTC would be validation that a SC is working.

so, remember that the working example here is one where we have a Bitcoin fork plus perfect anonymity added on top as an innovation.  i believe the vast majority of BTC holders value anonymity.  therefore perfect anonymity should be better than pseudonymity.

since that's the case, why wouldn't you then move ALL your BTC into scBTC?
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October 27, 2014, 09:58:36 PM
 #14715


Like all things BTC, it is a matter of trust.

FTFU: like "investing in" all things "related to" BTC, it is a matter of trust.

With BTC as complicated as it is you have to trust no one but the miners and society to work in their best interest, regards of everything else. And all actors define what their best interests are, it's still experimental, and way too early to mess with, we still don't know if it'll work on a large scale.

I am not supportive of changing that at the protocol level, ie. miners supporting and enforcing protocol rules defined by the interests of others. At the moment it's the node / protocol programmer, under guidance of for profit vultures capitalists, debating changes to leverage the work done by the miners. SC may have value but I'm not keen to see the Bitcoin formula messed with until it has some serious market traction.

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October 27, 2014, 10:03:10 PM
 #14716

ok, so if i understand your answer, relative market price btwn a BTC and a scBTC will aid in the assessment of whether a SC is succeeding or not?  for example, if the price of scBTC is rising and leading the price of BTC, that might be an indicator that the innovation related to the SC is valid?

second question, would transfer of a "significant number" of BTC to scBTC mean anything to you?

Correct, stability in their correlation could be one indication of a well designed and useful application.

As for your second question, I'm sorry but this is too early to answer considering I have no practical example to consider.

Of course, I would be extremely careful in considering the transfer of a significant amount of BTC to scBTC to as I have stated above this is the same approach I would take with an altcoin.

If the particular sidechain gains traction, offers a particularly interesting use case and has properly implemented code that is vetted by the community, is safe and protected from any malicious intent then if need be I could eventually feel safe doing so.

Like all things BTC, it is a matter of trust.

and you may not have the luxury of a practical example.

for instance, one of the first SC's i'd expect to pop up is a SC with perfect anonymity added as an innovation to a simple fork of Bitcoin with no initial coins and a 1:1 peg in place to accept incoming transfers of BTC to scBTC.

the question for you is, what if you saw significant #'s of BTC start moving into scBTC, what would you conclude?

I would conclude the market has voted in favor of such a sidechain and with time, would feel comfortable using it?

Where are you trying to lead me? Stop beating around the bush

Funny but my first conclusion (when I first read about SC) was foundation members past and present laundering stolen coins.

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October 27, 2014, 10:10:53 PM
 #14717

Perhaps cypher's concern is that everyone moves their BTC over to the sidechain, then the sidechain fails in such a way that it's not possible to reconvert them to BTC, and the whole Bitcoin ledger is destroyed.

To fully comprehend whether this is a concern requires some terminological cleanup. I think there's a basic misguided focus in the term "sidechain." It's not the chain but the peg that matters.

Imagine if Counterparty had delayed their launch a year. Instead of proof of burn where provably destroying 1 BTC gave you 1200 XCP, they set up a 2-way peg where locking 1 BTC gives you access to 1200 XCP (and the reverse: locking 1200 XCP gives you access to 1 BTC) in perpetuity. Why does that make XCP a "sidechain," whereas proof of burn makes it an "altcoin"? The key thing that's happening is some assets are being pegged to bitcoins. Insofar as the market was confident that you could always very easily convert between the two, forever, at 1 BTC = 1200 XCP, the price of 1200 XCP should be very close to 1 BTC. If someone sent you 1200 XCP, after all, you could easily convert them to 1 BTC and sell them for the same amount of dollars as if you had held 1 BTC from the start (and vice versa). So in theory you should be agnostic about which form you get paid in, and wallet software may not even show the end user which currency they are technically holding, i.e., whether they have 2 BTC or 2400 XCP, since it can be converted any time depending on the user's needs.

Now let's suppose everyone but you converted their BTC to XCP. You are the last BTC holder. Assuming convertibility remains, miners would still mine BTC for the block reward - since they could simply convert to XCP and sell for fiat. And you could still convert at any time. Theoretically your investment would never be at risk and you would only stand to gain if XCP were better since the value of XCP - and hence to the same degree BTC - would rise. If the peg lasts, the value of you coins can only grow if XCP is all around better.

One might even conceive that it's possible to do this without a protocol change, just using timelocks and one chain as the other's oracle. In the example, a kind of smart contract in Counterparty that issues you 1200 XCP when the oracle (trustless data directly from the Bitcoin blockchain) says that 1 BTC has been locked in a certain way, and similar smart contract in Bitcoin being set up simultaneously that unlocks the 1 BTC when the oracle (data directly from Counterparty's system) says that 1200 XCP has been locked in a certain way.

If it were done that way, it would look a lot more benign, but it may be the same in effect. Or it may not. But it's important to characterize the proponents' side correctly first in order to properly argue about any possible dangerous edge cases and have those arguments be understood by the proponents.
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October 27, 2014, 10:17:05 PM
 #14718

Perhaps cypher's concern is that everyone moves their BTC over to the sidechain, then the sidechain fails in such a way that it's not possible to reconvert them to BTC, and the whole Bitcoin ledger is destroyed.

To fully comprehend whether this is a concern requires some terminological cleanup. I think there's a basic misguided focus in the term "sidechain." It's not the chain but the peg that matters.

Imagine if Counterparty had delayed their launch a year. Instead of proof of burn where provably destroying 1 BTC gave you 1200 XCP, they set up a 2-way peg where locking 1 BTC gives you access to 1200 XCP (and the reverse: locking 1200 XCP gives you access to 1 BTC) in perpetuity. Why does that make XCP a "sidechain," whereas proof of burn makes it an "altcoin"? The key thing that's happening is some assets are being pegged to bitcoins. Insofar as the market was confident that you could always very easily convert between the two, forever, at 1 BTC = 1200 XCP, the price of 1200 XCP should be very close to 1 BTC. If someone sent you 1200 XCP, after all, you could easily convert them to 1 BTC and sell them for the same amount of dollars as if you had held 1 BTC from the start (and vice versa).

Now let's suppose everyone but you converted their BTC to XCP. You are the last BTC holder. Assuming convertibility remains, miners would still mine BTC for the block reward - since they could simply convert to XCP and sell for fiat. And you could still convert at any time. Theoretically your investment would never be at risk and you would only stand to gain if XCP were better since the value of XCP - and hence to the same degree BTC - would rise.

One might even conceive that it's possible to do this without a protocol change, just using timelocks and one chain as the other's oracle. In the example, a kind of smart contract in Counterparty that issues you 1200 XCP when the oracle (trustless data directly from the Bitcoin blockchain) says that 1 BTC has been locked in a certain way, and similar smart contract in Bitcoin being set up simultaneously that unlocks the 1 BTC when the oracle (data directly from Counterparty's system) says that 1200 XCP has been locked in a certain way.

If it were done that way, it would look a lot more benign, but it may be the same in effect. Or it may not. But it's important to characterize the proponents' side correctly first in order to properly argue about any possible dangerous edge cases and have those arguments be understood by the proponents.

let him (brg444) answer since he's the resident shill.
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October 27, 2014, 10:25:15 PM
 #14719


Perhaps cypher's concern is that everyone moves their BTC over to the sidechain, then the sidechain fails in such a way that it's not possible to reconvert them to BTC, and the whole Bitcoin ledger is destroyed.

Probably not else he would not have studiously ignored my question about how that differs from one simply losing a private key in Bicoin which has happened a zillion times already.  Bitcoin designers saw no reason to address this 'weakness' because, in simple terms, it is no big deal.

To fully comprehend whether this is a concern requires some terminological cleanup. I think there's a basic misguided focus in the term "sidechain." It's not the chain but the peg that matters.
...

'Terminological cleanup'?  How about 'basic critical thinking'?


brg444
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Bitcoin replaces central, not commercial, banks


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October 27, 2014, 10:32:44 PM
 #14720

https://twitter.com/M_Gauche/status/526849966674026496

Quote
James King @M_Gauche
Calling it right now: #Bitcoin will be irrelevant in 5 years. Cash out now to beat the rush. cc @balajis

 Cheesy Cheesy

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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