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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 2022643 times)
cypherdoc
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November 04, 2014, 01:12:55 AM
 #15501

so they moved this to pg 5:

The core observation is that
“Bitcoin” the blockchain is conceptually independent from “bitcoin” the asset: if we had technology
to support the movement of assets between blockchains, new systems could be developed which
users could adopt by simply reusing the existing bitcoin currency


wrong
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November 04, 2014, 01:17:10 AM
 #15502

pg 4 whitepaper:

For this reason, Bitcoin’s objective is relatively simple: it is a blockchain supporting the
transfer of a single native digital asset, which is not redeemable for anything else.


so if a chunk of the native digital assets are allowed to migrate to SC's, where will the tx fees come from to pay miners long term after block rewards diminish?

Sounds like he is saying, in effect, 'a reserve currency'.  That is exactly what BTC would be in a solution involving more than one sidechain.

Maybe that's why the author(s) deemed batch mode (periodic blocks forming a chain) to be a satisfactory design vs. a streaming or token design more appropriate for exchange duty.

I do wonder if Satoshi anticipated sidechains from the get-go.  Very possibly since they are quite logical and they occurred to dumb-ass me fairly quickly after putting my mind to the problem of how to make the thing scale.  Indeed, bitcoin seems almost custom made to serve as a reserve currency foundation.  If he did I would not be surprised at all if he declined to mention them given how they blow the mind of some of you mouth-breathing simpletons out there.

Oh! --->>>
Quote
pg 5:  

The fact that functionality must be broadly acceptable to gain adoption limits participants’
personal freedom and autonomy over their own coins.

That almost seals it for me.  Yup.


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November 04, 2014, 01:23:58 AM
 #15503

pg 7

If, in the medium term, there
were wide agreement that the new system was an improvement, it may end up seeing significantly
more use than Bitcoin. As there are no changes to parent chain consensus rules, everyone can switch
in their own time without any of the risks associated with consensus failure.


they never address the problem of mining tx fee fragmentation as a result of increasing usage of the SC.  how will Bitcoin miners ever make make money when SC's are attracting all the tx's?
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November 04, 2014, 01:28:41 AM
 #15504

Sounds like he is saying, in effect, 'a reserve currency'.  That is exactly what BTC would be in a solution involving more than one sidechain.


tv, how can Bitcoin act as a reserve currency in the presence of multiple SC's that are sucking BTC and miners away from the MC thus decreasing it's security model and therefore it's value?  think about 2140 when the block reward has gone to 0 and Bitcoin miners are supposed to rely on tx fees exclusively but they are being outcompeted by a SC that is processing all their tx's b/c everyone has migrated over to it b/c of an innovation?

edit:  i know some will say that the MC will just incorporate the innovation.  maybe, maybe not.  the whitepaper says everyone can/should move over.  also, if consensus is so hard to get now, what changes then?  and what about the conflict of interest that the Blockstream devs might use to block the innovation being added to MC b/c they have an interest in SC's being successful?
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November 04, 2014, 01:30:19 AM
 #15505

Personally I am considerably less worried about the effect of sidechains on Bitcoin, than I am about their effect on Bitcoiners.

However, I do not appreciate wanton ignoring of risks and claiming "don't worry it will be fine"
Whenever I hear that it is a good reason to hold my wallet tight and walk the other direction.

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November 04, 2014, 01:32:24 AM
 #15506

I think Satosi envisioned blockchain to blockchain transactions for sure, not sure he flushed out pegging them.

I believe he saw the decentralized exchanges using OpenTransaction trust free servers and backing new featured tokens with smart contracts.

Who knows I'm sure he's hands off.

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November 04, 2014, 01:34:29 AM
 #15507


how will Bitcoin miners ever make make money when SC's are attracting all the tx's?

Nobody ever imagined that SC's would "attract all the tx's".  Just the opposite else the two-way peg is meaningless.

In my mind there is significant concern that 500k transactions per day would satisfy even the peg transactions (given that I would like to see it be realistic for a reasonable swath of individual-class users store value on the primary chain.)  That is why I'm not opposed to some expansion of the transaction rate, but I am fiercely protective of keeping Bitcoin at a size that it can be both maintained by smaller players AND defended in the case of a broad attack by core global internet infrastructure providers.


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November 04, 2014, 01:38:19 AM
 #15508


how will Bitcoin miners ever make make money when SC's are attracting all the tx's?

Nobody ever imagined that SC's would "attract all the tx's".  Just the opposite else the two-way peg is meaningless.




why wouldn't a SC with an innovation like faster tx times attract all the tx's?  and why wouldn't the scBTC stay scBTC with the perceived risk free put (2wp)?  and if i'm right, they will be rewarded by staying on the SC b/c the price of scBTC on that SC will start to rise faster in fiat terms than BTC itself as the SC becomes more and more successful.
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November 04, 2014, 01:38:45 AM
 #15509

Sounds like he is saying, in effect, 'a reserve currency'.  That is exactly what BTC would be in a solution involving more than one sidechain.


tv, how can Bitcoin act as a reserve currency in the presence of multiple SC's that are sucking BTC and miners away from the MC thus decreasing it's security model and therefore it's value?  think about 2140 when the block reward has gone to 0 and Bitcoin miners are supposed to rely on tx fees exclusively but they are being outcompeted by a SC that is processing all their tx's b/c everyone has migrated over to it b/c of an innovation?

This will happen a lot sooner if we get the level of transactions that Gavin is anticipating.
Currently TX fees are 1/300th of the total reward.
If we get 40x the transactions in a decade, the fees with be anywhere from equivalent to as low as 1/3 the reward (the coinbase block reward will go down twice - maybe thrice by then so 1/4 or 1/8).
This would be about 80 TX per second.
Visa does about 2000/second on average today.

However if we get accompanying price appreciation for BTC along with such adoption, we may likely have fee reduction by an order of magnitude or two, which could put us back to only fees = 1/100th the block reward.

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November 04, 2014, 01:47:06 AM
 #15510

@cypherdoc - SC is not simple to understand

transacting in SC can be separated in 3 steps
1. entering SC
2. using SC
3. exiting SC

steps #1 and #3 => entering and exiting is 2-way-peg
a) 2-way-peg can be done by
 - trusted entity (human or server will convert between MC and SC) => it can be you (cypherSC)
 - Federated peg (N humans or oracles will create transactions on MC and SC -> locking and unlocking BTC and scBTC)
 - Co-signed (N humans or oracles ) and SPV proof from SC will be required to convert between MC and SC
 - bitcoin (bitcoin protocol wlll exchange  BTC <-> scBTC)
 - ... and many more
 
b) Then there is step #2 "using SC". This is separated from creating 2wp.
Using SC will require mining. This can be done by
 - MM merge mining
 - trusted entity (server will confirm blocks)
 - using Federated miners (those can by differnet from those who created Federated peg)
 - Oracle/s
 - bitcoin timestamping
 - SNARK
 - ... and many more

c) Block in SC can be new blockchain concept (aka, 'faster transactions', 'different monetary policy', 'better privacy', 'more extensive scripting', 'contracts', 'different cryptography', 'different mining models' and so on).


edit:
2wp, mining, blockchain concept are orthogonal. They create new 3-dimensional world.

that is how i understand it.  but as far as you pumping the Federated server model, this is from the paper itself pg 7:

Although it is possible to use a simple trust-based solution involving fixed signers
(see Appendix A) to verify locking of coins, there are important reasons to avoid the introduction
of single points of failure:

Trusting individual signers does not only mean expecting them to behave honestly; they must
also never be compromised, never leak secret key material, never be coerced, and never stop
participating in the network.

Because digital assets are long-lived, any trust requirements must be as well. Experience has
shown that trust requirements are dangerous expectations even for timespans on the order of
months, let alone the generational timespans we expect financial systems to last.
180

Digital currencies were unable to gain traction until Bitcoin was able to eliminate single
points of failure, and the community is strongly averse to the introduction of such weaknesses.
Community mistrust is reinforced by financial events since 2007; public trust in the financial
system and other public institutions is likewise at historical lows.
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November 04, 2014, 01:52:12 AM
 #15511


how will Bitcoin miners ever make make money when SC's are attracting all the tx's?

Nobody ever imagined that SC's would "attract all the tx's".  Just the opposite else the two-way peg is meaningless.


why wouldn't a SC with an innovation like faster tx times attract all the tx's?  and why wouldn't the scBTC stay scBTC with the perceived risk free put (2wp)?  and if i'm right, they will be rewarded by staying on the SC b/c the price of scBTC on that SC will start to rise faster in fiat terms as the SC becomes more and more successful.

People keep talking about a peg.
As if there were such a thing.


One of these days there will be an SC with some very useful feature, but the devs used compromised cryptographic primitives, and can factor out SC private keys and run off with all the BTC that moved into that chain.
If this is done as a long enough con, it could become an existential risk to bitcoin, yes?  (both the SC and Bitcoin could be essentially destroyed).

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November 04, 2014, 01:58:47 AM
 #15512

I think Bitcoin proponents who are Side Chane enthusiasts will finally understand when a Side Chane takes over with less desirable qualities than Bitcoin provides its proponents today - or not, the argument that Bitcoin was an experiment due to fail anyway will still be valid.

today: It is SC allow inflation in SC tokens (currency) while backing it with and fixing the value of Bitcoin and by this means Blockstream and their future partners may secretly and unobserved, confiscate the wealth of the Bitcoiners, and not one man in a million will detect the theft. (problem is there arrant that many Bitcoiners)

you just need Fiat money to make this happen, and not a lot either, fractions of that is pumped out in the past QE (more than I have but I am not at risk of a failing Fiat system.)

This makes so little sense I don't know where to begin.

A sidechain taking over Bitcoin that has less desirable qualities than Bitcoin provides? I... I just can't

SC does not allow inflation. Altcoins allow inflation. SC does not enable altcoin.

Why is it so hard for you people to understand this

"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 04, 2014, 01:59:50 AM
 #15513

People keep talking about a peg.
As if there were such a thing.


One of these days there will be an SC with some very useful feature, but the devs used compromised cryptographic primitives, and can factor out SC private keys and run off with all the BTC that moved into that chain.
If this is done as a long enough con, it could become an existential risk to bitcoin, yes?  (both the SC and Bitcoin could be essentially destroyed).

 Huh


Open source

 Huh

"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 04, 2014, 02:03:59 AM
 #15514


how will Bitcoin miners ever make make money when SC's are attracting all the tx's?

Nobody ever imagined that SC's would "attract all the tx's".  Just the opposite else the two-way peg is meaningless.


why wouldn't a SC with an innovation like faster tx times attract all the tx's?  and why wouldn't the scBTC stay scBTC with the perceived risk free put (2wp)?  and if i'm right, they will be rewarded by staying on the SC b/c the price of scBTC on that SC will start to rise faster in fiat terms as the SC becomes more and more successful.

People keep talking about a peg.
As if there were such a thing.


One of these days there will be an SC with some very useful feature, but the devs used compromised cryptographic primitives, and can factor out SC private keys and run off with all the BTC that moved into that chain.
If this is done as a long enough con, it could become an existential risk to bitcoin, yes?  (both the SC and Bitcoin could be essentially destroyed).

Call me paranoid but that's how I feel about wallet that generate my private keys.
Why would it be bad for Bitcoin? How would it be destroyed?

I can see how the BTC price would drop but wouldn't this be like other scams in the past? When people clue in it would be like a run on the bank SideChain?

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November 04, 2014, 02:12:39 AM
 #15515


how will Bitcoin miners ever make make money when SC's are attracting all the tx's?

Nobody ever imagined that SC's would "attract all the tx's".  Just the opposite else the two-way peg is meaningless.


why wouldn't a SC with an innovation like faster tx times attract all the tx's?  and why wouldn't the scBTC stay scBTC with the perceived risk free put (2wp)?  and if i'm right, they will be rewarded by staying on the SC b/c the price of scBTC on that SC will start to rise faster in fiat terms as the SC becomes more and more successful.

People keep talking about a peg.
As if there were such a thing.


One of these days there will be an SC with some very useful feature, but the devs used compromised cryptographic primitives, and can factor out SC private keys and run off with all the BTC that moved into that chain.
If this is done as a long enough con, it could become an existential risk to bitcoin, yes?  (both the SC and Bitcoin could be essentially destroyed).

i've brought up a number of times that this SPV proof is unproven and untested no matter what you call it.  they can vet it all they want but no one knows it will work until it's been tested live under market conditions.
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November 04, 2014, 02:17:45 AM
 #15516


SC does not allow inflation. Altcoins allow inflation. SC does not enable altcoin.


Altcoins are not inflationary, the innovators grow the total market cap. The failure are bad investments, BTC just changes hands no inflation.

A SideChain token is a Bitcoin substitute it can be used as an alternative.

Growth in a SC that creates an arbitrage opportunity that exceeds the Bitcoin market cap would be inflationary.

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November 04, 2014, 02:21:12 AM
 #15517

and that would be to ignore what Odalv has said all along.  he envisions billions.  there certainly will be a lot as they are costless to implement.  and why not if you can attract valuable BTC to scBTC while possibly securing MM?

Did you read through my comment or just skim through it? I'm interested in the money function of Bitcoin and its subset in sidechains.

"Why not create a billion altcoins if you can attract valuable BTC to altchain while possibly securing MM". Well what do you know? We've seen that already and not much damage was caused to Bitcoin afaik.

we would hope not.  except with lots of miners losing money at this point, if SC's were implemented tomorrow even with a questionable innovation, speculative miners could be expected to support a speculative SC.

 Cheesy you really can't get it through your head heh. I will repeat it again in hope that you eventually get it. Miners can decide to merge mine any altcoin already RIGHT NOW if they find it profitable. There exists plenty of speculative ALTcoins. Evidently miners do not find any value in these speculative altcoins because they are NOT merge mining them.

Now, by what kind of strech of the imagination do you propose that if SC's were implemented tomorrow, a gang of sidecoins would be created that would create any incentive for the miners to merge mine them.

What is the sidecoins' value proposition for the miners that doesn't exist in current altcoins? Answer me that.

a sidecoin exacerbates the problem as i see it by introducing a block reward on the SC in addition to the tx fees paid.  as Bitcoin's mining reward dwindles, the inequity in payout becomes even more stark in favor of the SC.  we've been through this already, why ignore us?

Again, let's compare with altcoins shall we? Altcoins introduce blockrewards in addition to tx fees paid. Why are miners not merge mining altcoins right now then?

i disagree that these can ever be the only benefits that Bitcoin might ever derive from technological advancements.  better security might be one.   niche uses not dependent on MM are another huge source.  all these have the potential to suck the life out of Bitcoin (decreased tx fees) especially when there exists this theoretical risk free put.

There is NO risk free put in the creation of issued assets on a sidechain (sidecoins). The only "risk free put" is in utility sidechains.

you're still ignoring that they could take over the MC especially if the scBTC start to climb in price and we see migration to the SC over time if the innovation appears valid and useful. you've never answered my Q about how and when will the core devs be willing to integrate a new innovation into the MC?  maybe the Blockstream core devs don't want that to happen out of conflict of interest?
 

BTC climbs in price with the realization of added value in a utility sidechain (1:1 peg). That said, if innovation in a utility sidechain appears to gain significant market traction then it will be considered whether or not it should be implemented in the mainchain. It might necessitate a hardfork and the devs might simply decide it should be left as is : a sidechain working in synergy with the mainchain. Remember that we are only considering 1:1 pegged SC. Others are simply altcoins in disguise.

it is a risk in the sense that if successive innovative SC's are introduced, which is to be expected, then forcing all BTC hodlers to crack open cold wallets to migrate each time this happens would introduce all sorts of risk which i've already identified.

And that is precisely why it will not happen and sidechain will be used as UTILITY chains where coins will be sent only when their particular feature is necessary. It has been 6 years now since Bitcoin was published. Assuming it was created with sidechains, how many sidechains do your foresee would attract considerable market capital? What are their features? Is there any that would entice you to crack open your cold wallets to migrate all of you coins to it?


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November 04, 2014, 02:28:59 AM
 #15518

SC does not allow inflation. Altcoins allow inflation. SC does not enable altcoin.

Why is it so hard for you people to understand this

why is it so hard for you to read?:

5.2 Issued assets
To this point, we have mostly been thinking about sidechains which do not need their own native
currency: all coins on the sidechain are initially locked, until they are activated by a transfer from
some other sidechain. However, it is possible for sidechains to produce their own tokens, or
issued
assets
, which carry their own semantics. These can be transferred to other sidechains and traded for
other assets and currencies, all without trusting a central party, even if a trusted party is needed for
future redemption.
440
Issued asset chains have many applications, including traditional financial instruments such
as shares, bonds, vouchers, and IOUs. This allows external protocols to delegate ownership and
transfer tracking to the sidechain on which the ownership shares were issued. Issued asset chains
may also support more innovative instruments such as smart property.
These technologies can also be used in
complementary currencies
[Lie01]. Examples of
complementary currencies include community currencies, which are designed to preferentially
boost local businesses; business barter associations, which support social programs like education
or elderly care; and limited-purpose tokens which are used within organisations such as massive
15
multiplayer games, loyalty programs, and online communities
12
.
A suitably extended scripting system and an asset-aware transaction format would allow the
450
creation of useful transactions from well-audited components, such as the merger of a bid and
an ask to form an exchange transaction, enabling the creation of completely trustless peer-to-peer
marketplaces for asset exchange and more complex contracts such as trustless options[FT13]. These
contracts could, for example, help reduce the volatility of bitcoin itself.
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November 04, 2014, 02:33:27 AM
 #15519

that's not but what is: is failing to understanding that a feature that is more valuable will have an impact.

what if that value is laundering stolen coins? the arb opportunity will be 0ver 10% and there are about 1,000,000 stolen BTC out there.

what if some nation state: whats to use blockchain technology, and invests a failing fiat system or there gold reserves in a SC that is inflationary but comes with demurrage if saving in a private wallet and interest when held with a CB or some other feature that appeals to the 99% that is not Bitcoin. it is a great opportunity for Bitcoiners to arb initially until the arb gap is closed.  the goale here is to make Bitcoin attractive to Nation-State's note there isn't a Nation-State that should feel safe with bitcoin growing as it is.  

What if ? Well 1,000,000 in, laundry time, 1,000,000 laundered coin out to the main chain.

Are you serious when asking these questions? Do you seriously believe that there are an incentive for someone to leave their coins on a potentially less secure Sidechain when it's only feature is to launder coin and that somehow this feature is more valuable than the whole Bitcoin mainchain?

Here you go again with your GOVcoin argument  Cheesy You know what's the problem with this paranoiac idea, other than paranoia itself, is that GOVcoin is... guess what? An altcoin! And altcoin, well... they already exist.

Sidechains did not create altcoins
Sidechains do not enable altcoins


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November 04, 2014, 02:35:28 AM
 #15520


OK, how about a real problem with sidechains for a change?

Sidechains rely on Bitcoin since it is their reserve currency.  They will need to support it as a subsidized entity if it is not profitable to support by itself (and the design of Bitcoin ensures that we will always approach this condition.)

A sidechain, however, relies on Bitcoin being healthy for them.  That is to say, Bitcoin operates on the transactions which impact the sidechain and the rest of the transactions can go pound sand.  If a sidechain is subsidizing Bitcoin by mining it (or even if it's not) what would be the mechanism to deter them from prioritizing transactions which benefit themselves?  Or, for that matter, neglecting all other transactions?  Perhaps 'user pressure' or 'the goodness of their hearts', but this always makes me uncomfortable.

Now it is the case (I believe) that miners are autonomous and not necessarily tied to one sidechain or another.  But in design one must consider miners (and everyone else) to be completely predatory.  In many scenarios, however, a sidechain could induce them enough to consider the miner (pool) to be of a particular sidechain I would expect.

I was surprised and disappointed by Back's anticipation that there would be a small number of sidechains.  I'd like to see 1000's of them.  Now I am starting to visualize some of the dynamics which might be playing into his calculations.

In the end it all comes back to transaction fees I guess.  One of the huge appeals of sidechains, to me, is that they produce the possibility of sizable transaction fees on the Bitcoin blockchain and thus support the network without small-fry spam.

It would appear to be the case that sidechains in the presence of anything like pressure on the block capacity will indeed chase out the smaller individual players on Bitcoin proper since they'll be priced out by entities who are able to aggregate value flows.  I personally think this is a good thing but I can simpithize with those who see it as the opposite.  Three years ago I myself did as well.  My philosophy shifted suddenly (three years ago) when some of the economic and infrastructure ideas clicked.  By that time, however, I had envisioned the future as being something like sidechains so those who are chased out of Bitcoin proper would have a place to go.

(Also three years ago I was pretty fully vested in BTC...how much that had to do with my philosophy is unknown...)


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