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News: BIP91 seems stable: there's probably only slightly increased risk of confirmations disappearing. You should still prepare for Aug 1.
 
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Question: Will you support Gavin's new block size limit hard fork of 8MB by January 1, 2016 then doubling every 2 years?
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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1939990 times)
HeliKopterBen
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October 30, 2014, 01:57:44 AM
 #14881

@Cypherdoc

Your scenario is pretty far fetched.  I'm not sure a whale will be able to cause enough panic to do much damage given that side chains will be pegged at the protocol level.  A better test would be during natural panic such as the panic buying in 2011 and 2013 and subsequent crashes.  At worst, people might panic in and out of side chains during such periods  of volatility given the "risk free put" scenario, but arb bots should keep assets aligned in price for the most part.  I highly doubt that all market participants would completely abandon one chain for another.  As long as bitcoin has a block subsidy, it will not be abandoned by miners.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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cypherdoc
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October 30, 2014, 02:24:50 AM
 #14882

@Cypherdoc

Your scenario is pretty far fetched.  I'm not sure a whale will be able to cause enough panic to do much damage given that side chains will be pegged at the protocol level.  A better test would be during natural panic such as the panic buying in 2011 and 2013 and subsequent crashes.  At worst, people might panic in and out of side chains during such periods  of volatility given the "risk free put" scenario, but arb bots should keep assets aligned in price for the most part.  I highly doubt that all market participants would completely abandon one chain for another.  As long as bitcoin has a block subsidy, it will not be abandoned by miners.

the whale could amplify the effect by buying scBTC on the open mkt exchange with fiat to assist the price rise.  remember, speculators like growth, and this would be no different than investing early in a start up currency that has the added potential of not only the MC but an added innovation that theoretically should make it better and eventually superior.

your point about the block subsidy being a differentiating factor is a good one though.  perhaps the SC could introduce a sidecoin block reward equivalent to Bitcoin at the height in the SC when it is introduced.
HeliKopterBen
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October 30, 2014, 02:52:59 AM
 #14883


the whale could amplify the effect by buying scBTC

Then it wouldn't be a risk free put.

Quote
perhaps the SC could introduce a sidecoin block reward equivalent to Bitcoin at the height in the SC when it is introduced.

The SC reward wouldn't be fungible with bitcoin like the pegged coin.  However, I could see the SC reward becoming a problem if the side chain became popular.  It would provide further incentive for miners to mine the SC vs the MC.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
cypherdoc
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October 30, 2014, 02:56:17 AM
 #14884


the whale could amplify the effect by buying scBTC

Then it wouldn't be a risk free put.


yep, but under the right conditions could be quite effective.  like in a price ramp to offset the arb bots.

Quote
Quote
perhaps the SC could introduce a sidecoin block reward equivalent to Bitcoin at the height in the SC when it is introduced.

The SC reward wouldn't be fungible with bitcoin like the pegged coin.  However, I could see the SC reward becoming a problem if the side chain became popular.  It would provide further incentive for miners to mine the SC vs the MC.

no it wouldn't be fungible but would cause mining competition especially when the sidecoin is cheap along with the potential for significant price appreciation.
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October 30, 2014, 02:58:22 AM
 #14885

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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October 30, 2014, 02:59:29 AM
 #14886

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

that is the underlying assumption in my base case.
HeliKopterBen
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October 30, 2014, 03:02:41 AM
 #14887

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

From the whitepaper:

Quote
However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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October 30, 2014, 03:07:31 AM
 #14888

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

From the whitepaper:

Quote
However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics.
It's A White Paper, not The White Paper. I don't agree with the notion of independently traded tokens. The idea of a SC is to decentralize mining (whatever that means) and allow it to scale using present technology.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
smooth
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October 30, 2014, 03:07:54 AM
 #14889

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

From the whitepaper:

Quote
However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics.

As a Bitcoin holder I fail to see why I wouldn't prefer such a sidechain to one that is relying on transaction fees for mining, other than possibly ideological reasons, which I doubt will have much practical effect. Fees plus token should be more secure than fees alone, assuming any value for the token.



HeliKopterBen
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October 30, 2014, 03:19:48 AM
 #14890

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

From the whitepaper:

Quote
However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics.

As a Bitcoin holder I fail to see why I wouldn't prefer such a sidechain to one that is relying on transaction fees for mining, other than possibly ideological reasons, which I doubt will have much practical effect. Fees plus token should be more secure than fees alone, assuming any value for the token.

The additional token may divert mining resources away from MC, causing MC to be less secure.  Of course the additional token could bring additional mining resources into the network.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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October 30, 2014, 03:29:39 AM
 #14891

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

From the whitepaper:

Quote
However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics.

As a Bitcoin holder I fail to see why I wouldn't prefer such a sidechain to one that is relying on transaction fees for mining, other than possibly ideological reasons, which I doubt will have much practical effect. Fees plus token should be more secure than fees alone, assuming any value for the token.

The additional token may divert mining resources away from MC, causing MC to be less secure.  Of course the additional token could bring additional mining resources into the network.

My message was a bit unclear. I meant to say as a Bitcoin holder considering exchanging my coins to a side chain (and choosing between these two side chains). Granted the effect you describe could still matter if I were exchanging a small portion of my coins, although I'm not sure my decision whether to exchange would matter here to whether resources are diverted. If not then I would strictly prefer the token version.



cbeast
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October 30, 2014, 03:32:27 AM
 #14892

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

From the whitepaper:

Quote
However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics.

As a Bitcoin holder I fail to see why I wouldn't prefer such a sidechain to one that is relying on transaction fees for mining, other than possibly ideological reasons, which I doubt will have much practical effect. Fees plus token should be more secure than fees alone, assuming any value for the token.

The additional token may divert mining resources away from MC, causing MC to be less secure.  Of course the additional token could bring additional mining resources into the network.
A Side Chain may be an instance where an additional demurrage token may be desirable. The Bitcoin investment has an expiration date so people won't leave it in, but will have some incentive to use the SC.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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October 30, 2014, 03:33:07 AM
 #14893

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

From the whitepaper:

Quote
However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics.

As a Bitcoin holder I fail to see why I wouldn't prefer such a sidechain to one that is relying on transaction fees for mining, other than possibly ideological reasons, which I doubt will have much practical effect. Fees plus token should be more secure than fees alone, assuming any value for the token.

The additional token may divert mining resources away from MC, causing MC to be less secure.  Of course the additional token could bring additional mining resources into the network.

if you're a small miner now on the Bitcoin MC, and a SC with all the properties of my base case (with a significant innovation such as perfect anonymity) came along (now includes a sidecoin) would you stay put or jump to the SC?
brg444
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October 30, 2014, 03:37:41 AM
 #14894

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

From the whitepaper:

Quote
However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics.

As a Bitcoin holder I fail to see why I wouldn't prefer such a sidechain to one that is relying on transaction fees for mining, other than possibly ideological reasons, which I doubt will have much practical effect. Fees plus token should be more secure than fees alone, assuming any value for the token.

The additional token may divert mining resources away from MC, causing MC to be less secure.  Of course the additional token could bring additional mining resources into the network.

if you're a small miner now on the Bitcoin MC, and a SC with all the properties of my base case (with a significant innovation such as perfect anonymity) came along (now includes a sidecoin) would you stay put or jump to the SC?

in your base case, a 1:1 peg, there is no coin issuance, no block subsidy, so no incentive to jump boat

"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
cypherdoc
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October 30, 2014, 03:39:20 AM
 #14895

you know, it just occurred to me that when Austin Hill goes around to all the mining pools and mines and tries to convince them to MM all his SC's, he's introducing a market distortion.

in other words, he's attempting to get something for nothing.
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October 30, 2014, 03:41:08 AM
 #14896

A Side Chain must be 1:1 otherwise it's a merge mined (or not merge mined) altcoin.

From the whitepaper:

Quote
However, it is possible for sidechains to produce their own tokens, or issued
assets, which carry their own semantics.

As a Bitcoin holder I fail to see why I wouldn't prefer such a sidechain to one that is relying on transaction fees for mining, other than possibly ideological reasons, which I doubt will have much practical effect. Fees plus token should be more secure than fees alone, assuming any value for the token.

The additional token may divert mining resources away from MC, causing MC to be less secure.  Of course the additional token could bring additional mining resources into the network.

if you're a small miner now on the Bitcoin MC, and a SC with all the properties of my base case (with a significant innovation such as perfect anonymity) came along (now includes a sidecoin) would you stay put or jump to the SC?

in your base case, a 1:1 peg, there is no coin issuance, no block subsidy, so no incentive to jump boat

i just changed my base case according to a helpful comment from HB.  so what?  it doesn't invalidate the rest of my arguments.
dillpicklechips
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October 30, 2014, 03:44:06 AM
 #14897

in your base case, a 1:1 peg, there is no coin issuance, no block subsidy, so no incentive to jump boat
Transactions will happen on the sidechain and can charge tx fees, all of which are able to be converted right back to BTC if wanted. The only incentive to jump boat would be to use a feature.

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October 30, 2014, 03:46:06 AM
 #14898

in your base case, a 1:1 peg, there is no coin issuance, no block subsidy, so no incentive to jump boat
Transactions will happen on the sidechain and can charge tx fees, all of which are able to be converted right back to BTC if wanted. The only incentive to jump boat would be to use a feature.

go back and read my comments from today about this.  there seems to be several reasons for a BTC holder to jump to scBTC immediately once a whale starts pumping thru the peg and the price starts rising. 

don't forget other speculators who just want to use their fiat on an exchange to buy (pile on) a rising asset (scBTC) with significant growth potential.
brg444
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October 30, 2014, 03:47:02 AM
 #14899

i just changed my base case according to a helpful comment from HB.  so what?  it doesn't invalidate the rest of my arguments.

oh nothing, just pointing you moving goal post again. i'm impressed how your imagination can strech to such length to try and poke hole into sidechains.

it reminds of reading logs of the forum thread where satoshi first posted the paper.

"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
cypherdoc
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October 30, 2014, 03:51:14 AM
 #14900

i just changed my base case according to a helpful comment from HB.  so what?  it doesn't invalidate the rest of my arguments.

oh nothing, just pointing you moving goal post again. i'm impressed how your imagination can strech to such length to try and poke hole into sidechains.

it reminds of reading logs of the forum thread where satoshi first posted the paper.

and i'm impressed at what an idiot you are continuing to shill for SC's and your willingness to bury your head in the sand.  

and why and how did you just happen to pop here on the day the SC paper was released specifically countering my every point and trying to denigrate my position by pointing to the Reddit AMA despite the clear and positive/upvote point count i got?  one might think you're associated with them in some way.  

in case you hadn't noticed, all of us here are trying to seek the truth despite your presence.
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