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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1805157 times)
cypherdoc
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November 02, 2014, 09:25:49 PM
 #15401

Considering the apparent serious implementation and backing behind the sidechain, the market starts using it and finds considerable value in it. price of BTC goes UP



why would price do this?
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November 02, 2014, 09:32:49 PM
 #15402

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 :

Man,  you crack me up.

A 24yo insolent  kid with a  self admitted shitty job coming in here and insulting everybody when you've only been a member here since February 16, 2014. Where were you in 2011 when we were figuring this whole thing out? Oh yeah, you were 21! How many bitcoin do you own? Are you a butt hurt kid who wants a 2nd shot at Bitcoin at the expense of the rest of us?

I don't begrudge Cypherdoc not going into detail on dismembering these, because they aren't all that substantial as critic defenses go.  I don't know if it was sincere claim that these "debunk" all concerns for all people reading this or if that is just baiting.
Quote
Mistake 1 : Sidechains can protect the value through merged mining.
This protection isn't needed for Bitcoin, but for what risk SC introduce to Bitcoin mining.  Bitcoin mining is sufficient and expected to remain so absent continued centralization and pooling.  SC are parasitic in this way.  They are dependent on Bitcoin mining.  If at some point in the future, there is a particular SC that consumes the bulk of bitcoins in circulation, there is a non-zero risk to Bitcoin that there will be insufficient bitcoin transactions to support bitcoin mining in the later days.  It will have ended Bitcoin (albeit presumably for something better).  People are not always right, that's how we got to where we are with pervasive central banking.
Cypherdoc's allusion to your ability to predict human behavior is a trope to this.
So while your statement is true it doesn't answer the criticism.  (Yes SC "can" protect the value through merged mining, but that is not their purpose or intent, and it is not such a likely outcome.  Cypher "can" go into space if he pays Virgin enough bitcoin, but I don't think he intends to do that either.)

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 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.
This one is simply wrong.  Further, it makes several claims in succession that are not entirely related.  These are specifically a risk that SC do introduce.  In the same way that if physical bitcoin were what everyone wanted, and we traded those instead, there wouldn't be any Bitcoin TX fees.  These do have greater value in the free market than electronic bitcoins.  There is no peg, what there is, is inclusion and embedding of btc in another block chain which is separately traded off Bitcoin's block chain.  

Quote
Mistake 3 : Assuming the transfer of scBTC does not generate, by proxy, the movement of economic energy to the main blockchain.
Patently false.  We can transfer scBTC back and forth to each other, and this does not necessarily have any effect on the main block chain, economic or otherwise.
There might be some effect, but there is no assurance of that at all.  The Bitcoin block chain could even end without impacting the ability to transact amongst ourselves on a SC of BTC.  They may be independent economically.  

Quote
Mistake 4 : Failure to understand that sidechains can preserve the ledger AND allow for more features to the unit in the ledger.
This is your mistake.
SC assures neither of these.
SC does not assure any preserving of the Bitcoin ledger.
The additional features are not in the Bitcoin ledger, they are on the SC.
They are "possible" effects.  You are using the word "can" here and pretending that it means "does", and suggesting that this answers the concern.  Many people do this subconsciously, it is human nature.  Don't feel too bad about it.

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brg444
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November 02, 2014, 09:37:55 PM
 #15403

that was not his argument.  a simple SC with an innovation should be able to defeat the MC w/o the innovation once block rewards disappear.  why?  the risk free put and everyone taking advantage of the innovation to transact.

No, because a 1:1 SC with an innovation only serves as a subset of Bitcoin's money function.

Example :

An anonymous sidechain is only useful to those wanting to participate in private transactions.

A faster transacting is only useful to those needing faster transactions.

BTC, on the other hand, sit on the most liquid & secure chain, are supported by the biggest infrastructure, carry the most important network effect AND can move freely, back and forth, between the two aforementioned sidechains. The features are effectively user-defined and can be used at will, depending on the user's need.

I don't see exactly how the block reward is relevant considering there is no block subsidy on "a simple SC". Miners will mine both chains and profit from both chains' transactions.




"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, 09:42:28 PM
 #15404

that was not his argument.  a simple SC with an innovation should be able to defeat the MC w/o the innovation once block rewards disappear.  why?  the risk free put and everyone taking advantage of the innovation to transact.

No, because a 1:1 SC with an innovation only serves as a subset of Bitcoin's money function.

Example :

An anonymous sidechain is only useful to those wanting to participate in private transactions.

A faster transacting is only useful to those needing faster transactions.

BTC, on the other hand, sit on the most liquid & secure chain, are supported by the biggest infrastructure, carry the most important network effect AND can move freely, back and forth, between the two aforementioned sidechains. The features are effectively user-defined and can be used at will, depending on the user's need.

I don't see exactly how the block reward is relevant considering there is no block subsidy on "a simple SC". Miners will mine both chains and profit from both chains' transactions.

The current situation of BTC being the most liquid and secure chain supported by the biggest infrastructure is not necessarily the future situation.

The coinbase TX block reward is the primary incentive for mining currently.  It is 300x the fees.  This may not be the case in the future.
It is not a good position to take the current situation and suggest that because it is that way today that it will be that way in the future when we can be pretty sure that it won't be.  Especially so when one of the effects of scBTC is to transfer that liquidity and security to the SC.

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November 02, 2014, 09:44:30 PM
 #15405

MM SC costs a lot of resources.
MM SC has to keep(and collect) all transaction from SC.
No one will be able to keep all sc-blockchain (for 1,000,000,000 SC) and MM them.

this sounds reasonable
Quote
=> There will be only few (1 .. 5 ?) MM SC's
MM will be only used for change bitcoin protocol.



but it doesn't solve the increase in mining centralization as only larger mining pools will be able to MM.
You can choose mining pools. Mining pools operators will offer you more than 1 pool. They will offer you
 a) 1 pool for MM SC1,
 b) 1 pool for MM SC2
 c) 1 pool for MM (SC1+SC2)
 d) 1 pool for NO MM

Quote
and it doesn't solve the increased susceptibility to attack.

Please explain, I do not understand. How somebody will attack.
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November 02, 2014, 09:45:26 PM
 #15406

I hope you don't think I am being argumentative for any reason other than that I would like to see you improve your arguments.  The arguments you are using aren't compelling, but never the less I do think that there may be some utility to MM SCs.  I just don't think you are representing them very well.

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November 02, 2014, 09:46:29 PM
 #15407

that was not his argument.  a simple SC with an innovation should be able to defeat the MC w/o the innovation once block rewards disappear.  why?  the risk free put and everyone taking advantage of the innovation to transact.

No, because a 1:1 SC with an innovation only serves as a subset of Bitcoin's money function.

Example :

An anonymous sidechain is only useful to those wanting to participate in private transactions.

A faster transacting is only useful to those needing faster transactions.

BTC, on the other hand, sit on the most liquid & secure chain, are supported by the biggest infrastructure, carry the most important network effect AND can move freely, back and forth, between the two aforementioned sidechains. The features are effectively user-defined and can be used at will, depending on the user's need.

I don't see exactly how the block reward is relevant considering there is no block subsidy on "a simple SC". Miners will mine both chains and profit from both chains' transactions.





you could be right about anonymity being a niche feature, altho i'd bet you're wrong on this.  the vast majority of Bitcoiners, i believe, want increased privacy.  as far as faster tx's, you are definitely wrong on this.  ask anyone, "would you rather have your tx confirmed in 1 min or 10min?  every single one of them would pick 1 min.

point being, when the block subsidy in MC runs out in 2140 or sooner, the SC will be competing with the MC simply on tx fees but the SC has the added advantage of faster tx's and/or anonymity.  which chain would you rather be on, especially if you were a miner?
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November 02, 2014, 09:49:05 PM
 #15408

In the end you do NOT have to run a SC-enabled client.

If enough of the network do NOT ....

I'll be running a SC-enabled client because they allow for organic network growth using scale-free principles free from hacks like hard-coded MAX_BLOCK_SIZE changes.

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November 02, 2014, 09:54:19 PM
 #15409

MM SC costs a lot of resources.
MM SC has to keep(and collect) all transaction from SC.
No one will be able to keep all sc-blockchain (for 1,000,000,000 SC) and MM them.

this sounds reasonable
Quote
=> There will be only few (1 .. 5 ?) MM SC's
MM will be only used for change bitcoin protocol.



but it doesn't solve the increase in mining centralization as only larger mining pools will be able to MM.
You can choose mining pools. Mining pools operators will offer you more than 1 pool. They will offer you
 a) 1 pool for MM SC1,
 b) 1 pool for MM SC2
 c) 1 pool for MM (SC1+SC2)
 d) 1 pool for NO MM

not sure how that helps.  as you said, only larger actors can afford storing the huge data reqs for MM.  since they are the only ones who can derive income from MM, they push out at the very least solo miners and smaller pools.  that's centralization.
Quote
Quote
and it doesn't solve the increased susceptibility to attack.

Please explain, I do not understand. How somebody will attack.

currently mining pie includes Discus 29%, ghash 18%, Knc 7%.  let's say Austin convinces all 3 of these pools to MM his SC.  well, right there all it would take is for Discus unilaterally to perform a 51% attack.  see Peter Todd explanation as to why this might be beneficial for Discus:

https://www.reddit.com/r/Bitcoin/comments/2k01du/peter_todd_on_twitter_the_sidechains_paper_is/clgpjpx
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November 02, 2014, 09:58:52 PM
 #15410

Quote
... when the block subsidy in MC runs out in 2140 or sooner, the SC will be competing with the MC simply on tx fees but the SC has the added advantage of faster tx's and/or anonymity.  which chain would you rather be on, especially if you were a miner?

my take on it...

afaik, the peg is maintained algorithmically. there aren't new coins issued on the side chains, but rather, when you convert btc to SC, the units no longer reside on the MC. they now reside on the SC. there is no new issuance of coins. the total number of units is maintained. this is the peg.

as for merge mining. this means you mine both chains, or multiple chains simultaneously. no extra cost. no extra coins. what are the incentives for miners to also merge mine SCs? fees most likely, just like nmc, devcoin etc. whatever they are, they are in addition to the incentives for mining bitcoin. so its not creating a choice of which to be on. they are merge mined and you can transfer your coins back and forth. they reside on the main chain or side chain. the risk is that if you send your coins to a SC and something happens and you lose em, you can't send them back! same as burning them.

i think the idea is fascinating, and worth considering.

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November 02, 2014, 10:08:18 PM
 #15411

Quote
... when the block subsidy in MC runs out in 2140 or sooner, the SC will be competing with the MC simply on tx fees but the SC has the added advantage of faster tx's and/or anonymity.  which chain would you rather be on, especially if you were a miner?

my take on it...

afaik, the peg is maintained algorithmically. there aren't new coins issued on the side chains, but rather, when you convert btc to SC, the units no longer reside on the MC. they now reside on the SC. there is no new issuance of coins. the total number of units is maintained. this is the peg.

as for merge mining. this means you mine both chains, or multiple chains simultaneously. no extra cost. no extra coins. what are the incentives for miners to also merge mine SCs? fees most likely, just like nmc, devcoin etc. whatever they are, they are in addition to the incentives for mining bitcoin. so its not creating a choice of which to be on. they are merge mined and you can transfer your coins back and forth. they reside on the main chain or side chain. the risk is that if you send your coins to a SC and something happens and you lose em, you can't send them back! same as burning them.

i think the idea is fascinating, and worth considering.



but MM does come at a cost; data storage.  that's what odalv was saying above.  therefore when the MC has to compete with a SC simply on fees, miners and BTC holders will have to switch to mine the SC primarily b/c the innovation will have caused defection of BTC and miners and then choose what other blockchains might be out there to MM.  and it probably won't be Bitcoin.
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November 02, 2014, 10:12:18 PM
 #15412

I don't begrudge Cypherdoc not going into detail on dismembering these, because they aren't all that substantial as critic defenses go.  I don't know if it was sincere claim that these "debunk" all concerns for all people reading this or if that is just baiting.

Mistake 1 : Sidechains can protect the value through merged mining.
If at some point in the future, there is a particular SC that consumes the bulk of bitcoins in circulation, there is a non-zero risk to Bitcoin that there will be insufficient bitcoin transactions to support bitcoin mining in the later days.  It will have ended Bitcoin (albeit presumably for something better).  People are not always right, that's how we got to where we are with pervasive central banking

The bolded is what I cannot comprehend.

To suggest such a thing would happen is essentially to suggest that a sidechain would be created that carries all of Bitcoin features and more. So essentially, what you are speculating is that a sidechain could be created that is so innovative it removes the need for the Bitcoin blockchain.

But it begs the question : what features could be so compelling?

Anonymity? My opinion is this should be user-defined?
Faster transactions? This comes at the cost of network security

If such a chain emerges that offers these features in a user-defined manner without any tradeoff, then why should we not welcome it with open arms?

This one is simply wrong.  Further, it makes several claims in succession that are not entirely related.  These are specifically a risk that SC do introduce.  In the same way that if physical bitcoin were what everyone wanted, and we traded those instead, there wouldn't be any Bitcoin TX fees.  These do have greater value in the free market than electronic bitcoins.  There is no peg, what there is, is inclusion and embedding of btc in another block chain which is separately traded off Bitcoin's block chain.  

Analogy to physical bitcoin is asinine. There are transaction fees for every sidechains transactions and every miner is able to process and profit from these. And no, as I have stated in my previous comment, the features of a sidechain are user-defined and so I don't believe it is correct to assume "there wouldn't be any Bitcoin TX fees". There are several reasons for why I would prefer my transaction to take place on the main chain. I don't need anonymity or faster confirmation time for every transactions.

This is your mistake.
SC assures neither of these.
SC does not assure any preserving of the Bitcoin ledger.
The additional features are not in the Bitcoin ledger, they are on the SC.
They are "possible" effects.  You are using the word "can" here and pretending that it means "does", and suggesting that this answers the concern.  Many people do this subconsciously, it is human nature.  Don't feel too bad about it.

The essence of my argument throughout this thread is that the real innovations in sidechains are the utility of 1:1 two-way peg to make additional features possible WITHOUT disrupting the ledger/affecting the scarcity.

You can argue all day that altcoins could be created booted on top of sidechains and that they COULD be a danger to Bitcoin but this is not something that was enabled by sidechains. This risk (altcoins) was always present.

"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, 10:15:31 PM
 #15413

Considering the apparent serious implementation and backing behind the sidechain, the market starts using it and finds considerable value in it. price of BTC goes UP



why would price do this?

 Huh

People find value in the ability to make anonymous transactions. Buy BTC to use particular sidechain. Price of BTC goes up

"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, 10:17:46 PM
 #15414

not sure how that helps.  as you said, only larger actors can afford storing the huge data reqs for MM.  since they are the only ones who can derive income from MM, they push out at the very least solo miners and smaller pools.  that's centralization.
p2ppool would be just plain out of luck for now.

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November 02, 2014, 10:18:15 PM
 #15415

Considering the apparent serious implementation and backing behind the sidechain, the market starts using it and finds considerable value in it. price of BTC goes UP



why would price do this?

 Huh

People find value in the ability to make anonymous transactions. Buy BTC to use particular sidechain. Price of BTC goes up

ah, but in your world it's not possible for a sidescam to cause the price of BTC to go down?
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November 02, 2014, 10:25:29 PM
 #15416

MM SC costs a lot of resources.
MM SC has to keep(and collect) all transaction from SC.
No one will be able to keep all sc-blockchain (for 1,000,000,000 SC) and MM them.

this sounds reasonable
Quote
=> There will be only few (1 .. 5 ?) MM SC's
MM will be only used for change bitcoin protocol.



but it doesn't solve the increase in mining centralization as only larger mining pools will be able to MM.
You can choose mining pools. Mining pools operators will offer you more than 1 pool. They will offer you
 a) 1 pool for MM SC1,
 b) 1 pool for MM SC2
 c) 1 pool for MM (SC1+SC2)
 d) 1 pool for NO MM

not sure how that helps.  as you said, only larger actors can afford storing the huge data reqs for MM.  since they are the only ones who can derive income from MM, they push out at the very least solo miners and smaller pools.  that's centralization.
Quote
Quote
and it doesn't solve the increased susceptibility to attack.

Please explain, I do not understand. How somebody will attack.

currently mining pie includes Discus 29%, ghash 18%, Knc 7%.  let's say Austin convinces all 3 of these pools to MM his SC.  well, right there all it would take is for Discus unilaterally to perform a 51% attack.  see Peter Todd explanation as to why this might be beneficial for Discus:

https://www.reddit.com/r/Bitcoin/comments/2k01du/peter_todd_on_twitter_the_sidechains_paper_is/clgpjpx

>as you said, only larger actors can afford storing the huge data reqs for MM

As I said, there will be only few MM SC. (for purpose of protocol change).
There will be 1B SC's using different security model (oracles, trusted entities, SNARK, .. who knows)

It is possible to create SC what is resilient to 51% attack of MC(every SC what is not MM with MC). This makes 51% attack on MC even more worthless.
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November 02, 2014, 10:28:57 PM
 #15417

I don't begrudge Cypherdoc not going into detail on dismembering these, because they aren't all that substantial as critic defenses go.  I don't know if it was sincere claim that these "debunk" all concerns for all people reading this or if that is just baiting.

Mistake 1 : Sidechains can protect the value through merged mining.
If at some point in the future, there is a particular SC that consumes the bulk of bitcoins in circulation, there is a non-zero risk to Bitcoin that there will be insufficient bitcoin transactions to support bitcoin mining in the later days. It will have ended Bitcoin (albeit presumably for something better).  People are not always right, that's how we got to where we are with pervasive central banking

The bolded is what I cannot comprehend.

To suggest such a thing would happen is essentially to suggest that a sidechain would be created that carries all of Bitcoin features and more. So essentially, what you are speculating is that a sidechain could be created that is so innovative it removes the need for the Bitcoin blockchain.

But it begs the question : what features could be so compelling?

Anonymity? My opinion is this should be user-defined?
Faster transactions? This comes at the cost of network security

like i said above, user anonymity should be a widely sought after feature.  and your security argument is a logical fallacy in that it is perfectly reasonable to expect that faster tx times will be achieved in the future that doesn't effect network security, point being SC's coupled with that innovation will obsolete Bitcoin

Quote

If such a chain emerges that offers these features in a user-defined manner without any tradeoff, then why should we not welcome it with open arms?

you should.  but how inconvenient, insecure, along with identity compromise from having to move all your BTC to a SC every few years.
Quote
This one is simply wrong.  Further, it makes several claims in succession that are not entirely related.  These are specifically a risk that SC do introduce.  In the same way that if physical bitcoin were what everyone wanted, and we traded those instead, there wouldn't be any Bitcoin TX fees.  These do have greater value in the free market than electronic bitcoins.  There is no peg, what there is, is inclusion and embedding of btc in another block chain which is separately traded off Bitcoin's block chain.  

Analogy to physical bitcoin is asinine. There are transaction fees for every sidechains transactions and every miner is able to process and profit from these. And no, as I have stated in my previous comment, the features of a sidechain are user-defined and so I don't believe it is correct to assume "there wouldn't be any Bitcoin TX fees". There are several reasons for why I would prefer my transaction to take place on the main chain. I don't need anonymity or faster confirmation time for every transactions.

This is your mistake.
SC assures neither of these.
SC does not assure any preserving of the Bitcoin ledger.
The additional features are not in the Bitcoin ledger, they are on the SC.
They are "possible" effects.  You are using the word "can" here and pretending that it means "does", and suggesting that this answers the concern.  Many people do this subconsciously, it is human nature.  Don't feel too bad about it.

The essence of my argument throughout this thread is that the real innovations in sidechains are the utility of 1:1 two-way peg to make additional features possible WITHOUT disrupting the ledger/affecting the scarcity.

You can argue all day that altcoins could be created booted on top of sidechains and that they COULD be a danger to Bitcoin but this is not something that was enabled by sidechains. This risk (altcoins) was always present.

if a SC employs sidecoins/altcoins, the risk for Bitcoin is even greater than that of a simple SC alone just paying fees.  miners who defect would now be getting paid not only tx fees but also block rewards on a SC that everybody has migrated to b/c of the innovation.
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November 02, 2014, 10:30:03 PM
 #15418

you could be right about anonymity being a niche feature, altho i'd bet you're wrong on this.  the vast majority of Bitcoiners, i believe, want increased privacy.  as far as faster tx's, you are definitely wrong on this.  ask anyone, "would you rather have your tx confirmed in 1 min or 10min?  every single one of them would pick 1 min.

point being, when the block subsidy in MC runs out in 2140 or sooner, the SC will be competing with the MC simply on tx fees but the SC has the added advantage of faster tx's and/or anonymity.  which chain would you rather be on, especially if you were a miner?

I'd bet the picture your are painting of current BTC user does NOT represent the vast majority of future Bitcoin holder. Privacy should absolutely be user-defined in my opinion and the mainstream, right or wrong, has little need or want for anonymity.

As far as faster tx, remember that they come at the cost of lesser network security. I don't believe you can simply provide faster transactions on a POW algorithm without a tradeoff in security because if that were the case then Bitcoin would've had it by now.


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November 02, 2014, 10:32:13 PM
 #15419

I don't begrudge Cypherdoc not going into detail on dismembering these, because they aren't all that substantial as critic defenses go.  I don't know if it was sincere claim that these "debunk" all concerns for all people reading this or if that is just baiting.

Mistake 1 : Sidechains can protect the value through merged mining.
If at some point in the future, there is a particular SC that consumes the bulk of bitcoins in circulation, there is a non-zero risk to Bitcoin that there will be insufficient bitcoin transactions to support bitcoin mining in the later days.  It will have ended Bitcoin (albeit presumably for something better).  People are not always right, that's how we got to where we are with pervasive central banking

The bolded is what I cannot comprehend.

To suggest such a thing would happen is essentially to suggest that a sidechain would be created that carries all of Bitcoin features and more. So essentially, what you are speculating is that a sidechain could be created that is so innovative it removes the need for the Bitcoin blockchain.

But it begs the question : what features could be so compelling?
That isn't what begs the question means.

Anonymity? My opinion is this should be user-defined?
Faster transactions? This comes at the cost of network security

If such a chain emerges that offers these features in a user-defined manner without any tradeoff, then why should we not welcome it with open arms?

You may indeed welcome it.  But others may have many reasons not to do so.
It raises the risk to the minority.
It is similar to the problem of democratic voting.  One wins, one loses.  If you do not agree with the majority, you lose.
So "we" in this case is a subset of "we" that may not include cypherdoc or any other particular person.
Do you see why this is not a compelling argument?

This one is simply wrong.  Further, it makes several claims in succession that are not entirely related.  These are specifically a risk that SC do introduce.  In the same way that if physical bitcoin were what everyone wanted, and we traded those instead, there wouldn't be any Bitcoin TX fees.  These do have greater value in the free market than electronic bitcoins.  There is no peg, what there is, is inclusion and embedding of btc in another block chain which is separately traded off Bitcoin's block chain.  

Analogy to physical bitcoin is asinine. There are transaction fees for every sidechains transactions and every miner is able to process and profit from these. And no, as I have stated in my previous comment, the features of a sidechain are user-defined and so I don't believe it is correct to assume "there wouldn't be any Bitcoin TX fees". There are several reasons for why I would prefer my transaction to take place on the main chain. I don't need anonymity or faster confirmation time for every transactions.
Your opinion is noted.  We disagree.  I think it is a closer analogy to any of those you've used.
The bitcoin is contained within the SC similar to how it is contained within a physical bitcoin.  The physical bitcoin offers features that are not available on the main chain.  Transactions with physical bitcoin do not affect the Bitcoin block chain.  Huh, asinine... ok

Analogy aside, consider here that you are postulating that the SC features may bleed out some of the contained bitcoin to be used for TX fees and claiming that this potential feature which has never been implemented is going to happen, and so no one should have any worries about this?

This is your mistake.
SC assures neither of these.
SC does not assure any preserving of the Bitcoin ledger.
The additional features are not in the Bitcoin ledger, they are on the SC.
They are "possible" effects.  You are using the word "can" here and pretending that it means "does", and suggesting that this answers the concern.  Many people do this subconsciously, it is human nature.  Don't feel too bad about it.

The essence of my argument throughout this thread is that the real innovations in sidechains are the utility of 1:1 two-way peg to make additional features possible WITHOUT disrupting the ledger/affecting the scarcity.

You can argue all day that altcoins could be created booted on top of sidechains and that they COULD be a danger to Bitcoin but this is not something that was enabled by sidechains. This risk (altcoins) was always present.

Right...  There is no peg.  You claiming that there is one does not make it so.  The SC is a container for bitcoin with different characteristics.  This is not the same thing as a peg.
(a peg is not necessarily a good thing in any case)

Are you entirely certain you know what a Side Chain is?  Your explanation of them makes them sound really horrible.

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November 02, 2014, 10:35:57 PM
 #15420

Considering the apparent serious implementation and backing behind the sidechain, the market starts using it and finds considerable value in it. price of BTC goes UP



why would price do this?

 Huh

People find value in the ability to make anonymous transactions. Buy BTC to use particular sidechain. Price of BTC goes up

ah, but in your world it's not possible for a sidescam to cause the price of BTC to go down?

No.

Is the price of BTC going down because of altscams? In fact, a successful sidescam might push BTC's value up since it would essentially increase the scarcity of the remaining coins.

"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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