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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1807043 times)
cypherdoc
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November 02, 2014, 03:03:36 PM
 #15341


It is POS like in that the servers are set up by stakeholders and are centralized. Is that really the direction you want to move Bitcoin?

Fine, don't force  us to change the source code for your own purposes.  

What changes exactly do you mean ? Nobody proposes to change PoW to POS in bitcoin network.

I thought that was the last time you were  going to respond to this topic?

The SPV proof, waddaya think? The pos reference was to the federated model.

Simplified payment verification proof can be used on SC and will be created by SC.

No. To initiate the first transfer requires change in Bitcoin source to construct the SPV proof so that BTC can access SC
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November 02, 2014, 03:12:37 PM
 #15342

I see a sidecoin as an altcoin, but with an interesting bootstrap method.

The peg is not really possible, unless there is a full reserve, that is, the bitcoins are paralyzed while the corresponding sidecoins exist. Forget about independent coin creation in the sidechain aka govcoin. That makes the new sidecoins unbacked, and the peg fails.

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November 02, 2014, 03:18:23 PM
 #15343


It is POS like in that the servers are set up by stakeholders and are centralized. Is that really the direction you want to move Bitcoin?

Fine, don't force  us to change the source code for your own purposes.  

What changes exactly do you mean ? Nobody proposes to change PoW to POS in bitcoin network.

I thought that was the last time you were  going to respond to this topic?

The SPV proof, waddaya think? The pos reference was to the federated model.

Simplified payment verification proof can be used on SC and will be created by SC.

No. To initiate the first transfer requires change in Bitcoin source to construct the SPV proof so that BTC can access SC

In bitcoin participants will send bitcoins to some addresses. Side chain will observe if all transactions were sent and every tansaction has enough confirmation.
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November 02, 2014, 03:30:52 PM
 #15344


It is POS like in that the servers are set up by stakeholders and are centralized. Is that really the direction you want to move Bitcoin?

Fine, don't force  us to change the source code for your own purposes.  

What changes exactly do you mean ? Nobody proposes to change PoW to POS in bitcoin network.

I thought that was the last time you were  going to respond to this topic?

The SPV proof, waddaya think? The pos reference was to the federated model.

Simplified payment verification proof can be used on SC and will be created by SC.

No. To initiate the first transfer requires change in Bitcoin source to construct the SPV proof so that BTC can access SC

In bitcoin participants will send bitcoins to some addresses. Side chain will observe if all transactions were sent and every tansaction has enough confirmation.

You can try to spin this anyway you like but the SPV proof construction requires a change to the source code to make it happen.
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November 02, 2014, 03:51:56 PM
 #15345


It is POS like in that the servers are set up by stakeholders and are centralized. Is that really the direction you want to move Bitcoin?

Fine, don't force  us to change the source code for your own purposes.  

What changes exactly do you mean ? Nobody proposes to change PoW to POS in bitcoin network.

I thought that was the last time you were  going to respond to this topic?

The SPV proof, waddaya think? The pos reference was to the federated model.

Simplified payment verification proof can be used on SC and will be created by SC.

No. To initiate the first transfer requires change in Bitcoin source to construct the SPV proof so that BTC can access SC

In bitcoin participants will send bitcoins to some addresses. Side chain will observe if all transactions were sent and every tansaction has enough confirmation.

You can try to spin this anyway you like but the SPV proof construction requires a change to the source code to make it happen.

There is only one change that is required.  Extension to script which can recognise and validate(not create) SPV proof from SC. To withdraw bitcoins back. If we want fully decentralized SC.

But today we can use N of M signatures from trusted entities or oracles.
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November 02, 2014, 04:00:58 PM
 #15346

There is only one change that is required. 

that is the one i've been talking about all along. Roll Eyes
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November 02, 2014, 04:04:13 PM
 #15347


Everyone needs to read and digest this thoroughly.

One grammar error is that I believe  you meant SC proponents think BTC and Blockchain are "separable".


I think there is a distinction. Bitcoin proponents who are enthusiastic about SC believe BTC the currency is inseparable from the value in Bitcoin the blockchain and don't see the threat.

Where many Proponents pushing for protocol changes actually see them as separate and have devised a mechanism (SC) to do it.
 
The community enthusiasm for SC is evidence people overestimate the resilience of Bitcoin.

I forgot to add that miners if for profit only ones without Bitcoin savings should welcome MM SC as they get a better return on there mining investment and would be handicapped if Bitcoin diminishing block rewards were limited to Bitcoin the dominant Value Chain.

Looking at examples of past pool operators one may even be incentivized and financially motivated to lock value in the side chain with an attack on Bitcoin.

Thanks for reading cypher these ideas are not mine but to be distilled built on or disproved.


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November 02, 2014, 04:08:25 PM
 #15348

There is only one change that is required. 

that is the one i've been talking about all along. Roll Eyes

Is this fundamental change ? This is same as verify multi signature.
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November 02, 2014, 04:19:40 PM
 #15349



Everyone needs to read and digest this thoroughly.

One grammar error is that I believe  you meant SC proponents think BTC and Blockchain are "separable".

http://www.blockstream.com/sidechains.pdf

Some SC opponents believe.
 1) "To secure this value it will need to be mined, MM is the only option as the value will be comparable to that of Bitcoin. " This is a big mistake.

Co-signed SPV proofs. Introducing signers who must sign off on valid SPV proofs, watching for false proofs. This results in a direct tradeoff between centralisation and security against a high-hashpower attack.

A futuristic idea for a low-value or experimental sidechain is to invoke a trusted authority, whose only job is to execute a trusted setup for a SNARK scheme. Then SC blocks could be constructed which prove their changes to the unspent-output set, but do so in zero-knowledge in the actual transactions. They could even commit to the full verification of all previous SC blocks, allowing new users to get up to speed by verifying only the single latest SC block.

 2) They believe SC is an alt(Shit)Coin.  SC is not new ShitCoin.  SC is new service.

You are correct MM is not the only option. There are others.

My point remains that SC secure BTC but the value is transferred to the SC. So long as Bitcoin is more valuable one will have a motive to redeem the BTC.

So SC are a threat to Bitcoin because they separate The currency for the value in the blockchain. This will distort mining over time and predictability have a negative impact on Bitcoin.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
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November 02, 2014, 04:26:27 PM
 #15350

I see a sidecoin as an altcoin, but with an interesting bootstrap method.

The peg is not really possible, unless there is a full reserve, that is, the bitcoins are paralyzed while the corresponding sidecoins exist. Forget about independent coin creation in the sidechain aka govcoin. That makes the new sidecoins unbacked, and the peg fails.



The peg is just valued at $ 4.5 billion.

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November 02, 2014, 04:28:19 PM
 #15351


Everyone needs to read and digest this thoroughly.

One grammar error is that I believe  you meant SC proponents think BTC and Blockchain are "separable".


I think there is a distinction. Bitcoin proponents who are enthusiastic about SC believe BTC the currency is inseparable from the value in Bitcoin the blockchain and don't see the threat.

Where many Proponents pushing for protocol changes actually see them as separate and have devised a mechanism (SC) to do it.
 
The community enthusiasm for SC is evidence people overestimate the resilience of Bitcoin.

I forgot to add that miners if for profit only ones without Bitcoin savings should welcome MM SC as they get a better return on there mining investment and would be handicapped if Bitcoin diminishing block rewards were limited to Bitcoin the dominant Value Chain.

Looking at examples of past pool operators one may even be incentivized and financially motivated to lock value in the side chain with an attack on Bitcoin.

Thanks for reading cypher these ideas are not mine but to be distilled built on or disproved.



there are so many good points here.

most small miner are unprofitable currently. many large miners are too.  all these will be happy to have a SC to move to.  but i guess that is what SC proponents are banking on.  but it comes at an expense.  the MC has a real and present danger of being replaced.

Bitcoin is hard.  it's not meant to be an easy money making scheme.  it's hard to understand, it's hard for investors b/c of volatility, it's hard for miners b/c of intense competition, and it's especially hard for techno geeks who can't keep their hands off and who fail to understand that which Satoshi hath created.

they think b/c it is source code, Bitcoin belongs to them.  they think that they should be allowed and have the right to fiddle, tinker, and be paid for devving.  "devs gotta dev".   what they failed to realize back in the early days when i got involved in Jan 2011, and still fail to realize, is that investors such as myself saw something they didn't and poured significant amount of fiat into the system back when they thought it would go nowhere.  they thought it would go nowhere b/c they failed to understand what would eventually drive the price skyhigh.  and that is that Bitcoin is about Sound Money.  not stocks, bonds, assurance contracts, smart property.  that is what the blockchain was designed for; to secure bitcoin as money.  it HAS accomplished this b/c the protocol has not once failed us.  yet they want to tinker, fiddle, massage, even build for-profit companies around a unique fork designed to benefit their business model.  what i saw was that Bitcoin is a self contained financial system.  what that meant to me was that BTC was to forever only travel on it's unique and sole blockchain forever secured by an escalating hashrate from miners.

the reason this thread was established and has become so popular is b/c everything is working according to plan.  the price of gold is plummeting and just broke intermediate term support and is headed even further down.  i believe Bitcoin is destined to replace gold as the digital gold of the new millenium.  tinkering with the source code, which was donated by the way by Satoshi, risks this whole new paradigm in money.

as i said, it's up to SC proponents to prove to the rest of us, as close to a shadow of a doubt (b/c they are risking our entire market cap), that their significant complexities they want to implement to the source code not only technically but economically won't do harm.  i saw not even one economic analysis by a third party in their proposal.  the fact they didn't provide one indicates to me they never got one.  who here really trusts GM's and LukeJr's economic views?
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November 02, 2014, 04:30:21 PM
 #15352



Everyone needs to read and digest this thoroughly.

One grammar error is that I believe  you meant SC proponents think BTC and Blockchain are "separable".

http://www.blockstream.com/sidechains.pdf

Some SC opponents believe.
 1) "To secure this value it will need to be mined, MM is the only option as the value will be comparable to that of Bitcoin. " This is a big mistake.

Co-signed SPV proofs. Introducing signers who must sign off on valid SPV proofs, watching for false proofs. This results in a direct tradeoff between centralisation and security against a high-hashpower attack.

A futuristic idea for a low-value or experimental sidechain is to invoke a trusted authority, whose only job is to execute a trusted setup for a SNARK scheme. Then SC blocks could be constructed which prove their changes to the unspent-output set, but do so in zero-knowledge in the actual transactions. They could even commit to the full verification of all previous SC blocks, allowing new users to get up to speed by verifying only the single latest SC block.

 2) They believe SC is an alt(Shit)Coin.  SC is not new ShitCoin.  SC is new service.

You are correct MM is not the only option. There are others.

My point remains that SC secure BTC but the value is transferred to the SC. So long as Bitcoin is more valuable one will have a motive to redeem the BTC.

So SC are a threat to Bitcoin because they separate The currency for the value in the blockchain. This will distort mining over time and predictability have a negative impact on Bitcoin.

There is not difference between
a) holding bitcoins and not use them.
b) holding bitcoins on SC and use them on SC (eg. trade on exchange if this SC is exchange)

They both have same value 1 BTC.
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November 02, 2014, 04:31:28 PM
 #15353

I see a sidecoin as an altcoin, but with an interesting bootstrap method.

The peg is not really possible, unless there is a full reserve, that is, the bitcoins are paralyzed while the corresponding sidecoins exist. Forget about independent coin creation in the sidechain aka govcoin. That makes the new sidecoins unbacked, and the peg fails.



The bitcoins are always 'locked in' or paralysed as you put it when transferred to a sidechain. But the peg can be whatever the sidechain wants it to be. It can be fixed or it can float. If it floats then the chain is still backed to a degree by bitcoins, but that backing floats depending upon the value of the side chain coin relative to bitcoin.
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November 02, 2014, 04:31:44 PM
 #15354


It is POS like in that the servers are set up by stakeholders and are centralized. Is that really the direction you want to move Bitcoin?

Fine, don't force  us to change the source code for your own purposes.  

What changes exactly do you mean ? Nobody proposes to change PoW to POS in bitcoin network.

I thought that was the last time you were  going to respond to this topic??

The SPV proof, waddaya think? The pos reference was to the federated model.

Simplified payment verification proof can be used on SC and will be created by SC.

No. To initiate the first transfer requires change in Bitcoin source to construct the SPV proof so that BTC can access SC

In bitcoin participants will send bitcoins to some addresses. Side chain will observe if all transactions were sent and every tansaction has enough confirmation.

You can try to spin this anyway you like but the SPV proof construction requires a change to the source code to make it happen.

There is only one change that is required.  Extension to script which can recognise and validate(not create) SPV proof from SC. To withdraw bitcoins back. If we want fully decentralized SC.

But today we can use N of M signatures from trusted entities or oracles.
why do we need to make that change given the risk to the economics that make Bitcoin?

What is wrong with Oracles like OT?

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November 02, 2014, 04:36:55 PM
 #15355

There is not difference between
a) holding bitcoins and not use them.
b) holding bitcoins on SC and use them on SC (eg. trade on exchange if this SC is exchange)

They both have same value 1 BTC.


Sure and calculated physics in a vacuum is useful in space.
Theory and practice are different.
Even some bitcoin have different price than other bitcoin, or hadn't you noticed?
Bitcoin is not perfectly fungible with other bitcoin, why should you expect it to be so with SC-bitcoins?
(Want to buy some gox-coins?)

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
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November 02, 2014, 04:37:24 PM
 #15356

Man you people are so dense it's like you refuse to acknowledge the arguments made in most of my previous posts and insist on your incomprehension of the whole dynamics at stake to justify your ignorance.

Let us do it then step by step so you understand where you mistakes are

Bitcoin the currency is a mental bridge to understanding money as memory. The blockchain is the money. The blockchains existence is dependent on the economic incentive to wright transactions to it, it is an economic ledger if you adopt it. (Adopting Bitcoin is agreeing with the utility that it is the ledger.)

Agreed.

When rewards drop to a low quantity, possibly 20 months from now more likely 6 years, transaction fees will be a significant portion of the incentive to mine blocks. The network is dependent on incentivizing miners - to write transactions. In this model there is no wasted hashing, hashing grows to a point where it is supported by the value it provides eventually it grows to the marginal cost of transactions fees necessary to secure the network.  The drop in reward forces efficiency. And competition to mine for fees is incentivized by accepting the lowest fees possible. The mining market will tend to maximize profit by accepting the lowest fees that are viable or competition will get a sustaining advantage.

Messing with this has ramifications it changes the core of Bitcoin.
It really doesn't matter what miners think so long as they are at least 2 and they are in competition to write to the ledger in exchange for value that is redeemable in that ledger. The economic incentives, the value in the network, will ensure the appropriate industrial energy is invested.

This all sounds good to me... except maybe your inference that Sidechains "mess with this". moving on...

SC offer a secure way to use your BTC (Bitcoin the currency) but they don't secure the value, SC give me a choice transfer the value into another chain if it has greater value, and exchange it back if the other chain has less value.

Mistake 1 : Sidechains can protect the value through merged mining.
Mistake 2 : A chain that has greater value than Bitcoin = an alt-coin with greater value than Bitcoin. Utility features/services annexed to the main blockchain DO NOT have greater value than Bitcoin, only an alt-coin (supported through a sidechain or not) can claim this. If that is what you are suggesting (altcoin taking over) Sidechains are NOT introducing this risk and do little to enable it. As smooth has pointed out, the creator of such an altcoin would realize it is not necessarily desirable for his coin to utilize a sidechain.

I only believe BTC has a value because the only way in and out is by moving economic energy to the blockchain, Bitcoin in my mind is the blockchain and the currency are inseparable. It is just money is memory, value on the blockchain.

Mistake 3 : Assuming the transfer of scBTC does not generate, by proxy, the movement of economic energy to the main blockchain.

SC obviously have to be innovative (cypher' arguments have largely IMO focused on how you can fake success by messing with price.) But assuming they offer better value fake or real BTC will lock in. The BTC stay there but the value expressed as economic energy moves across.

See Mistake 2 :.

To secure this value it will need to be mined, MM is the only option as the value will be comparable to that of Bitcoin.
The miners will mine where ever the value is. If the SC becomes more valuable than Bitcoin (note the value can come from speculation manipulation or innovation we don't get a choice) then miners will derive there reward from the chain that gives the most incentives, nothing guarantees it will be Bitcoin.

See Mistake 2 :.

We also know Bitcoin will be disadvantaged over time with it's diminishing reward, and if the value is in a SC it will derive the highest reward from transaction fees. (The most viable argument I've heard is miners just MM all the SC, and I don't think that is a secure stratergy.) SC's could be anything even have an inflation rate however improbable that is it's not impossible, and not unlikely.   I conclude that miners will treat the value chain as the main chain and the Bitcoin blockchain would become less secure as miners don't have an economic incentive to keep it secure. (They earn off another chain)

Refer to Mistake 2 :. Note also that "I don't think that is a secure strategy" is not a reasonable answer to the argument you have been presented. FACT : it is trivial for miners to merge mine just about any chain and they will if there is ANY value in it.

Given we don't know who how or what SC will prevail we can probably expect a greater variety than we see with Alts as there are fiewer risks, we know if they fail to become the value chain they lose nothng and everything to gain if they succeeded.

No different than creating altcoins.
SC represent an attack vector fare more viable than a 51% attack, I for one wouldn't want to get 1:1 BTC back if the SC had more liquidity and a bigger network. And if that happened Bitcoin would not be as viable for me.

Refer to Mistake 2 :

I am convinced Bitcoin has no place being the dominant money or Master Chain unless it represent the economic memory or the greatest liquidity, SC change that, one may emerge that is adopted for reasons that appeal to non Austrian ideals, and absorbs Bitcoins value

Mistake 4 : Failure to understand that sidechains can preserve the ledger AND allow for more features to the unit in the ledger.

Austin Hill : "The KEY idea here is to protect the concept of digital scarcity and 21 million Bitcoin limit"

This is also a reiteration of your GOVcoin wins scenario which is truly a disturbing though coming from a Bitcoin proponent. See Mistake 2 :

"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, 04:39:07 PM
 #15357

This thread was more interesting to read prior to SC discussion taking over... Roll Eyes

I agree. Now we have to wade through pages of that... it's interesting, but I don't have the time.

I used to come here for news and insights on metals vs. bitcoin and markets in general.

Can't even say wether something was provided regarding the recent metals slamdown (or USD run) because I keep having to skip 5 pages at a time.

I have adressed this issue a couple of pages ago.

cypher response was : I can and will talk about whatever I want in MY thread, if you don't like it, go away.

"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, 04:40:03 PM
 #15358

But this is where an altcoin added to the SC could factor in.

Refer to Mistake 2

"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, 04:46:47 PM
 #15359

I see a sidecoin as an altcoin, but with an interesting bootstrap method.

The peg is not really possible, unless there is a full reserve, that is, the bitcoins are paralyzed while the corresponding sidecoins exist. Forget about independent coin creation in the sidechain aka govcoin. That makes the new sidecoins unbacked, and the peg fails.

Troubling how after so many pages of arguments on sidechains you can still utter such nonsense

YES the peg is possible. YES there is a full reserve. OF COURSE the bitcoins are paralyzed while the corresponding sidecoins exist.

Correct.  I think its worth clarifying that the peg is algorithmic, because its seems from the thread that some people may not understand that.  You, personally, can ask the network automatically to swap unlimited quantities of BTC on the sidechain for BTC on the main bitcoin chain.

"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, 04:47:47 PM
 #15360

Mistake 1 : Sidechains can protect the value through merged mining.

inherently less secure and encourages mining centralization.  best case expect a MM of 50% that of Bitcoin.  that is insecure.  see https://www.reddit.com/r/Bitcoin/comments/2k01du/peter_todd_on_twitter_the_sidechains_paper_is/clgpjpx
Quote

Mistake 2 : A chain that has greater value than Bitcoin = an alt-coin with greater value than Bitcoin. Utility features/services annexed to the main blockchain DO NOT have greater value than Bitcoin, only an alt-coin (supported through a sidechain or not) can claim this. If that is what you are suggestion (altcoin taking over) Sidechains are NOT introducing this risk and do little to enable it. As smooth has pointed out, the creator of such an altcoin would realize it is not necessarily desirable for his coin to utilize a sidechain.

wrong.  you just ignored Adrian's model of declining BTC fees paid to Bitcoin miners, a result of ppl moving to scBTC b/c of the risk free put and innovation.  all the tx fees will migrate to the SC leaving Bitcoin miners no choice but to defect over the long run.
Quote

Mistake 3 : Assuming the transfer of scBTC does not generate, by proxy, the movement of economic energy to the main blockchain.

the correct way to look at this is you are breaking the link btwn the MC and its BTC by moving highly secure BTC to relatively insecure scBTC.  the equilibrium price of BTC will go DOWN.
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