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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?
1.  yes
2.  no

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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1977843 times)
brg444
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November 01, 2014, 11:59:26 PM
 #15261

the burden of proof is on you and the proponents of this change to show as close to a shadow of a doubt that what you propose is an improvement to the system and adds value.  i could equally say it may destroy the system and i have given plenty of reasons why it think it could.

if you want to call me twisted then i could equally call you a naive 24 yo kid.

In reality, "plenty" of your reasons have been dismissed as disingenuous, farfetched and overall FUD.

Here is my proposition that sidechains are an improvement to the system and add value :

I think we all agree that Bitcoin is good enough right now and actually pretty close to being perfect as is. As I have mentionned above, its only shortcomings are in its transportive properties : confirmation times and inability to provide private transactions natively. This leads me to believe these two aspects are likely the only ones that who will lead to the creation of utility sidechains that are used as subsets of Bitcoin-money. In all honesty, is there anything more we need from Bitcoin, as a mean of exchange, than faster confirmation time and a privacy option? I don't think so.

Thousands of other sidechains will be created for different purposes but none will be competing with Bitcoin for its position as crypto-money. Some might try, but will realise they will be better off applying their competing idea to an actual altcoin.

Back to my two utility sidechains : these will never take over Bitcoin as they are effectively serving only a certain application or subset of money. Considering these two applications are using a BTC-peg as their transacting unit they are, barring some technicalities, a part of the Bitcoin network and closely tied to the native bitcoin unit, so much in fact that their 1:1 value will always gravitate toward each others and this correlation will become narrower as arbitrage comes into effect and time allows the technology to mature.

"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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November 02, 2014, 12:00:02 AM
 #15262

Well, the SCs would have reduced purchasing power. If they want their purchasing power back, they have to convert back. And like I said before, if it is easy enough to convert back, it sure beats dealing with some new and illiquid scamcoin exchanges.

no, you're missing the time element.

initially, when a SC is first established, trading prices in fiat for scBTC will be lower b/c they are riding on a less secure sidechain..  we can expect this b/c of newness, less security from MM, possible failure, unproven innovation.  as time goes on, and as arb bots can be confident that the SC is relatively stable and they won't lose any scBTC that they buy in arbing from a SC failure, they will enter the market to buy up scBTC (price rises) while at the same time selling BTC (price drops) until they create a new equilibrium price for both which will closely match but result in a lower price for BTC.  multiply this by a 1000x SC's.

it's kinda like the one's closest to the Fed when it first release QE into the fiat system and it's value is highest until its inflationary effects spread throughout the system. only this is in reverse.

That is simply not true. No one will sell you scBTC for less than BTC. He will offer feature/utility on higher price than actually BTC has.  If you buy then I'll make money. If you do not buy then I'll withdraw to BTC.

Why is it not true? Lets say I have 750K BTC I found in an abandoned server over at MtGox. I realize I can't sell it without attracting attention so I buy into a SC token and sell it at a discount for fiat, speculators see the arb opportunity and buy the SC and convert to BTC. There will be a net down pressure on BTC price.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
brg444
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November 02, 2014, 12:00:26 AM
 #15263

in fact, is this what the market is pricing in now since the announcement?

the ever insightful so "appeal to the market" argument


"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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November 02, 2014, 12:00:47 AM
 #15264

Bitcoin is a self contained financial system, meaning that its bitcoin are inextricably linked to its blockchain.  they give each other mutual value.  they only interact with the fiat system in terms of the price at the edges at exchanges or in p2p tx's.

anything that breaks this linkage potentially kills Bitcoin.

SC's break this linkage as it moves these units onto a different blockchain with a different security model and different properties.
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November 02, 2014, 12:01:49 AM
 #15265

Increased utility has to make up for less security if someone is willing to use the SC. The price will be the same with a two way peg.

So obvious yet seemingly so hard to understand

"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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November 02, 2014, 12:03:38 AM
 #15266

I do want to ask though, does this mean you're bearish on Bitcoin now?
I had to sell some, Gavin talking about a fork not an evolution, and this this is devastating IMO.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
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November 02, 2014, 12:05:17 AM
 #15267

Initially we can't expect shit IMO, because the volume will be low, and that's assuming some credible exchange lists SCs. The amount that is arbed until the price gets close shouldn't be too high. I'm certain that if a credible exchange took it up and it actually had significant volume while being substantially below peg rate, despite any doubts of people with newly converted to SCs, the pressure up would be far higher than the pressure down.

Why a thousand SCs? Are people really going to flow to so many, or do you expect them to do it in series as one gets deserted after the other?

there will be thousands b/c it's just software.  no real work involved.

Yes, BUT some are world wide and some are local.

Closed systems may benefit but global ones will kill Bitcoin.

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November 02, 2014, 12:09:37 AM
 #15268

Increased utility has to make up for less security if someone is willing to use the SC. The price will be the same with a two way peg.

So obvious yet seemingly so hard to understand

how do you know a brand new will be effective even if it is vetted by devs?  only with use, time, and multiple hacking attempts will you know definitively.  otoh, you know for a fact that a MM rate of say 50% that of the Bitcoin network will cause a decrease in security for the SC.  the market will price that in even though you won't.

so naive.
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November 02, 2014, 12:10:08 AM
 #15269

but that won't be proven right out of the box.  it will take time, experimentation, and speculation on the SC before the market will "trust" the SC, if ever at all.  in the meantime, expect the true value of 1 scBTC < 1 BTC.

this is another thing you don't understand, the 1:1 sidechain "market" doesn't have to prove itself, and in fact it is very likely there is no such speculation that you are referencing.

the likeliest candidates to sidechains are UTILITY chains on a 1:1 peg issuing no assets. they are to be used "in and out" or with only a fraction of the user's BTC trusted to it.

it seems very probable to me these sidechains can be proven valuable and secure "out of the box". assuming the sidechain concept (two-way peg, merged mining, etc.)has been implemented, tested and vetted for some time. From there on, candidate sidechain essentially leverages this implementation and present a code that discloses the exact behaviour of the chain which is then reviewed extensively by the community before an "official launch". Additionaly, we also have to consider that the SC could also be leveraging existing technologies or concepts that have been confirmed to work successfuly in a different environment.


"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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November 02, 2014, 12:12:35 AM
 #15270

how do you know a brand new will be effective even if it is vetted by devs?  only with use, time, and multiple hacking attempts will you know definitively.  otoh, you know for a fact that a MM rate of say 50% that of the Bitcoin network will cause a decrease in security for the SC.  the market will price that in even though you won't.

so naive.

read above for the first part of your question.

as for MM. I expect the MAJORITY of miners to support an utility sidechain putting forth a significant feature that should attract considerable use and therefore profit for them.

"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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November 02, 2014, 12:20:38 AM
 #15271

there may be some in scBTC who need to get out fast for IRL reasons and would rather take a slight loss selling on an exchange rather than going back thru the peg with it's contest/confirmation delays.  ppl do all sorts of crazy shit.

several proponents here have already agreed scBTC would be priced less than BTC, at least initially.

 Cheesy Cheesy Cheesy

so your argument relies on ppl doing all sort of crazy shit but you expect me to prove things without the shadow of a doubt

you can't be serious  Huh

this is a terrible, terrible answer and in fact there is no reasonable scenario for such a thing to happen. the only one I can envision where people would be selling their scBTC at a fiat loss instead of returning to the BTC mainchain is if a failure in the SC implementation doesn't allow it i.e. extremely unlikely and would be an exception that does not define the rule

"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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November 02, 2014, 12:22:21 AM
 #15272

Something is making the guy soil himself multiple times per day.  ...
That's insulting.  ...
No!  Really???


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November 02, 2014, 12:23:20 AM
 #15273

Bitcoin is a self contained financial system, meaning that its bitcoin are inextricably linked to its blockchain.  they give each other mutual value. 
What if all bitcoins were destroyed but one? Would it have less value?

they only interact with the fiat system in terms of the price at the edges at exchanges or in p2p tx's.

You can think of SCs as exchanges because they are in fact different currencies.

anything that breaks this linkage potentially kills Bitcoin.
Don't more exchanges actually increase liquidity?

SC's break this linkage as it moves these units onto a different blockchain with a different security model and different properties.
How is that any different than selling them for fiat like is happening now? Bitcoin will have to earn confidence, and that will just take time. If a better altcoin comes along, then so be it, but SCs will be designed to trade risk for additional functionality. If they become altcoins, then they will suffer the same fate as their 1000 predecessors.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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November 02, 2014, 12:26:57 AM
 #15274

another way to address your point is that a "theoretical" will never trump a "known".

we know MM is less secure than direct mining.  we don't know that a new untested "innovation" will exactly counter weigh the value of less security.

remember a week ago when you proposed that your anonymous sidechain would be so attractive it would effectively siphon all the BTC out of the mainchain  Huh

now you are not so certain about "innovations" because they don't fit your argument ?

"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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November 02, 2014, 12:29:57 AM
 #15275

that's b/c altcoins don't have the luxury of being MM'd by the Bitcoin miners.

the only chance SC's have to sell their whole concept is if Austin Hill can introduce a market distortion by convincing miners to MM.  you know, the "something for nothing" concept.

"market distortion"

 Cheesy

surely you mean "profit incentive" right?

"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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November 02, 2014, 12:36:13 AM
 #15276

I do want to ask though, does this mean you're bearish on Bitcoin now?
I had to sell some, Gavin talking about a fork not an evolution, and this this is devastating IMO.
Forks are the definition of evolution. Every species goes extinct. All of them. We are not the same species as our predecessors and our future progeny will not be the same species as us. Still, they trace a direct lineage. Forking the blockchain will allow a more adaptable Bitcoin that can survive the changing economic environment. Just because all the others who have tried failed, doesn't mean Gavin's version will fail. What will happen if nothing is done?

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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November 02, 2014, 12:37:18 AM
 #15277

the guy is not known for his manners.  in fact, if i say one thing, you can be guaranteed he'll just say the opposite to disagree.

Not true.  We were both saying BTC was possibly a good buy in late 2011.  Just saying it in different tones, and possibly for different reasons.  My clairvoyance is not sufficient to speak authoritatively about the latter though.  You are pretty much right since that time though.  We disagree about more than we agree about to be sure.  And I do have a propensity to disagree (and often enough to be disagreeable.)


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November 02, 2014, 12:37:49 AM
 #15278

I do want to ask though, does this mean you're bearish on Bitcoin now?
I had to sell some, Gavin talking about a fork not an evolution, and this this is devastating IMO.
Forks are the definition of evolution. Every species goes extinct. All of them. We are not the same species as our predecessors and our future progeny will not be the same species as us. Still, they trace a direct lineage. Forking the blockchain will allow a more adaptable Bitcoin that can survive the changing economic environment. Just because all the others who have tried failed, doesn't mean Gavin's version will fail. What will happen if nothing is done?

Apes losing their tail was a fork in the evolution of primates.

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November 02, 2014, 12:38:27 AM
 #15279

another way to address your point is that a "theoretical" will never trump a "known".

we know MM is less secure than direct mining.  we don't know that a new untested "innovation" will exactly counter weigh the value of less security.

remember a week ago when you proposed that your anonymous sidechain would be so attractive it would effectively siphon all the BTC out of the mainchain  Huh

now you are not so certain about "innovations" because they don't fit your argument ?

via a speculative attack.

point being, there are many scenarios here where problems could occur.
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November 02, 2014, 12:39:05 AM
 #15280

I do want to ask though, does this mean you're bearish on Bitcoin now?
I had to sell some, Gavin talking about a fork not an evolution, and this this is devastating IMO.
Forks are the definition of evolution. Every species goes extinct. All of them. We are not the same species as our predecessors and our future progeny will not be the same species as us. Still, they trace a direct lineage. Forking the blockchain will allow a more adaptable Bitcoin that can survive the changing economic environment. Just because all the others who have tried failed, doesn't mean Gavin's version will fail. What will happen if nothing is done?

Apes losing their tail was a fork in the evolution of primates.
No. That's not the point and also not true.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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