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brg444
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November 04, 2014, 02:35:57 AM
 #15521

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

Why is it so hard for you people to understand this

irrelevant quote

 Roll Eyes

I know that you can create altcoins on top of sidechains.

My argument is they don't enable them to succeed any more than traditional altcoin.

And please don't bring up the "yes they will be merged mined" argument.... I would be very disappointed.

"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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brg444
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November 04, 2014, 02:40:19 AM
 #15522

It is economically naive to fail to consider that a feature that adds value in one economic condition, may subtract it in another, and that movement of money may follow this with a lag, sometimes a very significant lag due to practical constraints.
Further naivete would be in imaging that this is not happening all the time, and that this effect is commonly exploited.  "Economists" here are contemplating only static ideal cases, and implementing regulatory changes in spite of these concerns.  Changing the code is changing what ultimately regulates Bitcoin.

With this particular change, it is not so easy to undo it if it turns out to be a mistake.  Many Bitcoin may be destroyed.  People will make mistakes of trust.

There are many new risks with SC.  Lets address them rather than pretend that they don't exist.

You make many sensible comments and let me insist I am not trying to downplay the potential risks of sidechains.

My problem is that most of sidechains opponents in this thread are justifying their risk-case with a proposition that involves the creation of coins booted on sidechains.

To my knowledge, coins booted on sidechains are the economic equivalent of altcoins and in no way are sidecoins advantaged over altcoins. So in essence, sidecoins are not responsible for that problem and it is misguided to suggest that they are.

"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, 02:55:22 AM
 #15523

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 to zero?

a chunk of the assets != ALL of the assets

tx fees will come from miners mining all chains producing holding significant value

"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, 02:56:23 AM
 #15524

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

Why is it so hard for you people to understand this

irrelevant quote

 Roll Eyes

I know that you can create altcoins on top of sidechains.

My argument is they don't enable them to succeed any more than traditional altcoin.

And please don't bring up the "yes they will be merged mined" argument.... I would be very disappointed.

"irrelevant quote" Smiley FYI those were examples of inflation.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
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November 04, 2014, 02:57:57 AM
 #15525

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?

duh!

they will mine both chains!

one more comment like this and you've officially turned into a troll

"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, 02:59:09 AM
 #15526

brg444,

the difference btwn an altcoin as it exists today and a sidecoin that could exist on a SC tomorrow is a direct link to the Bitcoin network via the 2wp.  b/c the 2wp guarantees that scBTC can get back to BTC (theoretically), users will be encouraged to migrate to the SC to utilize the innovation and pay scBTC tx fees.  and they will be incentivized to stay there b/c of the 2wp.  initially, i believe these scBTC will be valued lower than BTC in fiat terms b/c they are indeed less secure and arbing can be expected to drag down the BTC price.  however, as time advances and if the innovation is significantly proven to be useful and confidence in security of the SC increases, more and more ppl will convert to scBTC.  you yourself concluded this should drive up the fiat price and i agree.  this should feed on itself to the point that everyone will perform their tx's on the SC if the Bitcoin core devs do nothing to update the MC with the innovation.  this would destroy Bitcoin miners over the long run as their block rewards diminish along with defecting tx fees.  how and when will they devs decide to upgrade the protocol?  they need consensus which you've already said is impossible.  will they do it under pressure, panic?  when 40, 50, or 60% of all BTC have become scBTC?  maybe it will be too late or maybe it gets blocked by Blockstream core devs b/c their biz model depends on SC development and success?  can you imagine how many $millions it would be worth to Blockstream if all BTC hodlers ended up having to move to a SC they had helped conceive and build?  who knows, i don't see it as guaranteed and i surely see the process as potentially being conflicted.  

MM an altcoin as it's defined today is seriously risky and not worth the trouble for Bitcoin miners.  MM a sidecoin adds additional badly needed revenue to struggling smaller miners who will be more willing to defect to a sidecoin.  the revenue stream will be more easy to envision for these miners.  the other difference is that no, Bitcoin miners can't just simply start mining an altcoin today if they wanted to.  the altcoin's protocol has to be specifically modified by the altcoin devs to accept Bitcoin DMMS.  i don't see them offering this to Bitcoin miners so that's why it's not happening.  since sidecoins represent a direct link to the Bitcoin MC for BTC users to convert to scBTC, the process is simpler and worth more to miners b/c they can mine not only sidecoin reward & tx fees but scBTC tx fees as well.  
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November 04, 2014, 03:02:39 AM
 #15527

It is economically naive to fail to consider that a feature that adds value in one economic condition, may subtract it in another, and that movement of money may follow this with a lag, sometimes a very significant lag due to practical constraints.
Further naivete would be in imaging that this is not happening all the time, and that this effect is commonly exploited.  "Economists" here are contemplating only static ideal cases, and implementing regulatory changes in spite of these concerns.  Changing the code is changing what ultimately regulates Bitcoin.

With this particular change, it is not so easy to undo it if it turns out to be a mistake.  Many Bitcoin may be destroyed.  People will make mistakes of trust.

There are many new risks with SC.  Lets address them rather than pretend that they don't exist.

You make many sensible comments and let me insist I am not trying to downplay the potential risks of sidechains.

My problem is that most of sidechains opponents in this thread are justifying their risk-case with a proposition that involves the creation of coins booted on sidechains.

To my knowledge, coins booted on sidechains are the economic equivalent of altcoins and in no way are sidecoins advantaged over altcoins. So in essence, sidecoins are not responsible for that problem and it is misguided to suggest that they are.

brg444, what is you critique of doing all the things you like about SC with Open-Transactions http://opentransactions.org/wiki/index.php/Main_Page, and none of the inflation?

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
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November 04, 2014, 03:03:47 AM
 #15528


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.

no, your logic fails you again.

if faster tx times is implemented WITHOUT security tradoff to the SC then it makes perfect sense that the mainchain would incorporate the feature natively.

since you refuse this scenario, then indeed, as mentionned in the whitepaper, the scBTC might attract considerable, even the majority of the coin.

BUT

Quote
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.
[/i]

The price of scBTC will NOT riser faster than BTC's since a BTC can claim a 1:1 stake in the SC so they are effectively worth the same.

"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, 03:05:56 AM
 #15529

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

Why is it so hard for you people to understand this

irrelevant quote

 Roll Eyes

I know that you can create altcoins on top of sidechains.

My argument is they don't enable them to succeed any more than traditional altcoin.

And please don't bring up the "yes they will be merged mined" argument.... I would be very disappointed.

"irrelevant quote" Smiley FYI those were examples of inflation.

Inflation on the sidechain is not affecting the mainchain  Wink

"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, 03:07:18 AM
 #15530

It is economically naive to fail to consider that a feature that adds value in one economic condition, may subtract it in another, and that movement of money may follow this with a lag, sometimes a very significant lag due to practical constraints.
Further naivete would be in imaging that this is not happening all the time, and that this effect is commonly exploited.  "Economists" here are contemplating only static ideal cases, and implementing regulatory changes in spite of these concerns.  Changing the code is changing what ultimately regulates Bitcoin.

With this particular change, it is not so easy to undo it if it turns out to be a mistake.  Many Bitcoin may be destroyed.  People will make mistakes of trust.

There are many new risks with SC.  Lets address them rather than pretend that they don't exist.

You make many sensible comments and let me insist I am not trying to downplay the potential risks of sidechains.

My problem is that most of sidechains opponents in this thread are justifying their risk-case with a proposition that involves the creation of coins booted on sidechains.

To my knowledge, coins booted on sidechains are the economic equivalent of altcoins and in no way are sidecoins advantaged over altcoins. So in essence, sidecoins are not responsible for that problem and it is misguided to suggest that they are.

brg444, what is you critique of doing all the things you like about SC with Open-Transactions http://opentransactions.org/wiki/index.php/Main_Page, and none of the inflation?

Utility sidechains (1:1) peg have no inflation and are more decentralized than OT is.


I win?

"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, 03:09:57 AM
 #15531

brg444,

the difference btwn an altcoin as it exists today and a sidecoin that could exist on a SC tomorrow is a direct link to the Bitcoin network via the 2wp.  b/c the 2wp guarantees that scBTC can get back to BTC (theoretically), users will be encouraged to migrate to the SC to utilize the innovation and pay scBTC tx fees.  and they will be incentivized to stay there b/c of the 2wp.  initially, i believe these scBTC will be valued lower than BTC in fiat terms b/c they are indeed less secure and arbing can be expected to drag down the BTC price.  however, as time advances and if the innovation is significantly proven to be useful and confidence in security of the SC increases, more and more ppl will convert to scBTC.  you yourself concluded this should drive up the fiat price and i agree.  this should feed on itself to the point that everyone will perform their tx's on the SC if the Bitcoin core devs do nothing to update the MC with the innovation.  this would destroy Bitcoin miners over the long run as their block rewards diminish along with defecting tx fees.  how and when will they devs decide to upgrade the protocol?  they need consensus which you've already said is impossible.  will they do it under pressure, panic?  when 40, 50, or 60% of all BTC have become scBTC?  maybe it will be too late or maybe it gets blocked by Blockstream core devs b/c their biz model depends on SC development and success?  can you imagine how many $millions it would be worth to Blockstream if all BTC hodlers ended up having to move to a SC they had helped conceive and build?  who knows, i don't see it as guaranteed and i surely see the process as potentially being conflicted.  

MM an altcoin as it's defined today is seriously risky and not worth the trouble for Bitcoin miners.  MM a sidecoin adds additional badly needed revenue to struggling smaller miners who will be more willing to defect to a sidecoin.  the revenue stream will be more easy to envision for these miners.  the other difference is that no, Bitcoin miners can't just simply start mining an altcoin today if they wanted to.  the altcoin's protocol has to be specifically modified by the altcoin devs to accept Bitcoin DMMS.  i don't see them offering this to Bitcoin miners so that's why it's not happening.  since sidecoins represent a direct link to the Bitcoin MC for BTC users to convert to scBTC, the process is simpler and worth more to miners b/c they can mine not only sidecoin reward & tx fees but scBTC tx fees as well.  

 Huh

You were wrong by your first sentence, should I continue reading?

Sidecoins do NOT guarantee that the scBTC can get back to the BTC. Sidecoins have a floating peg and not a 1:1 2wp.

"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, 03:13:42 AM
 #15532

brg444,

the difference btwn an altcoin as it exists today and a sidecoin that could exist on a SC tomorrow is a direct link to the Bitcoin network via the 2wp.  b/c the 2wp guarantees that scBTC can get back to BTC (theoretically), users will be encouraged to migrate to the SC to utilize the innovation and pay scBTC tx fees.  and they will be incentivized to stay there b/c of the 2wp.  initially, i believe these scBTC will be valued lower than BTC in fiat terms b/c they are indeed less secure and arbing can be expected to drag down the BTC price.  however, as time advances and if the innovation is significantly proven to be useful and confidence in security of the SC increases, more and more ppl will convert to scBTC.  you yourself concluded this should drive up the fiat price and i agree.  this should feed on itself to the point that everyone will perform their tx's on the SC if the Bitcoin core devs do nothing to update the MC with the innovation.  this would destroy Bitcoin miners over the long run as their block rewards diminish along with defecting tx fees.  how and when will they devs decide to upgrade the protocol?  they need consensus which you've already said is impossible.  will they do it under pressure, panic?  when 40, 50, or 60% of all BTC have become scBTC?  maybe it will be too late or maybe it gets blocked by Blockstream core devs b/c their biz model depends on SC development and success?  can you imagine how many $millions it would be worth to Blockstream if all BTC hodlers ended up having to move to a SC they had helped conceive and build?  who knows, i don't see it as guaranteed and i surely see the process as potentially being conflicted.  

MM an altcoin as it's defined today is seriously risky and not worth the trouble for Bitcoin miners.  MM a sidecoin adds additional badly needed revenue to struggling smaller miners who will be more willing to defect to a sidecoin.  the revenue stream will be more easy to envision for these miners.  the other difference is that no, Bitcoin miners can't just simply start mining an altcoin today if they wanted to.  the altcoin's protocol has to be specifically modified by the altcoin devs to accept Bitcoin DMMS.  i don't see them offering this to Bitcoin miners so that's why it's not happening.  since sidecoins represent a direct link to the Bitcoin MC for BTC users to convert to scBTC, the process is simpler and worth more to miners b/c they can mine not only sidecoin reward & tx fees but scBTC tx fees as well.  

 Huh

You were wrong by your first sentence, should I continue reading?

Sidecoins do NOT guarantee that the scBTC can get back to the BTC. Sidecoins have a floating peg and not a 1:1 2wp.

you're not reading properly.  a SC with a sidecoin can also accept scBTC.  it's the scBTC that have the 2wp, as you say.  therefore, any miner mining the SC gets 3 revenue streams; scBTC and sidecoin tx fees and sidecoin block rewards.  this is why they will MM and eventually directly mine if enough scBTC appears on the SC.
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November 04, 2014, 03:15:19 AM
 #15533

Nikkei +657 (4%)


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November 04, 2014, 03:15:59 AM
 #15534

brg444,
MM an altcoin as it's defined today is seriously risky and not worth the trouble for Bitcoin miners.  MM a sidecoin adds additional badly needed revenue to struggling smaller miners who will be more willing to defect to a sidecoin.  the revenue stream will be more easy to envision for these miners.  the other difference is that no, Bitcoin miners can't just simply start mining an altcoin today if they wanted to.  the altcoin's protocol has to be specifically modified by the altcoin devs to accept Bitcoin DMMS.  i don't see them offering this to Bitcoin miners so that's why it's not happening.  since sidecoins represent a direct link to the Bitcoin MC for BTC users to convert to scBTC, the process is simpler and worth more to miners b/c they can mine not only sidecoin reward & tx fees but scBTC tx fees as well.  

Maybe I should repeat again? Sidecoin = altcoin. Same dynamics. Floating exchange rate with BTC and all. So MM an altcoin more risky than MM a sidecoin?

Absolutely not.

"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, 03:16:12 AM
 #15535

It is economically naive to fail to consider that a feature that adds value in one economic condition, may subtract it in another, and that movement of money may follow this with a lag, sometimes a very significant lag due to practical constraints.
Further naivete would be in imaging that this is not happening all the time, and that this effect is commonly exploited.  "Economists" here are contemplating only static ideal cases, and implementing regulatory changes in spite of these concerns.  Changing the code is changing what ultimately regulates Bitcoin.

With this particular change, it is not so easy to undo it if it turns out to be a mistake.  Many Bitcoin may be destroyed.  People will make mistakes of trust.

There are many new risks with SC.  Lets address them rather than pretend that they don't exist.

You make many sensible comments and let me insist I am not trying to downplay the potential risks of sidechains.

My problem is that most of sidechains opponents in this thread are justifying their risk-case with a proposition that involves the creation of coins booted on sidechains.

To my knowledge, coins booted on sidechains are the economic equivalent of altcoins and in no way are sidecoins advantaged over altcoins. So in essence, sidecoins are not responsible for that problem and it is misguided to suggest that they are.

brg444, what is you critique of doing all the things you like about SC with Open-Transactions http://opentransactions.org/wiki/index.php/Main_Page, and none of the inflation?

Utility sidechains (1:1) peg have no inflation and are more decentralized than OT is.


I win?

how are those cheep coins working for you  Smiley OT can be as decentralized as using a BitTorrent client to assess the BitTorrent network, 100%  decentralized, and available without a prototypical change why so insistent SC are better?  

FYI inflation in value on a SC is what prevents one converting back into BTC, one want to use the value enabled by the SC, and if it isn't there you want to convert back the BTC.

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November 04, 2014, 03:21:23 AM
 #15536

you're not reading properly.  a SC with a sidecoin can also accept scBTC.  it's the scBTC that have the 2wp, as you say.  therefore, any miner mining the SC gets 3 revenue streams; scBTC and sidecoin tx fees and sidecoin block rewards.  this is why they will MM and eventually directly mine if enough scBTC appears on the SC.

I don't believe this is quite exact.

A SC with a sidecoin will reward BTC locked into this sidechain with a deterministic amount of scBTC (not 1:1). For example 1 BTC will get you 5000 scBTC. From that point on these sidecoins have a floating exchange rate. If the sidechain fails to attract speculators/users than the exchange rate is more expensive ex: it now cost you 10000 scBTC to redeem 1 BTC.

For that reason, sidecoins are exactly like altcoins

"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, 03:28:29 AM
 #15537

you're not reading properly.  a SC with a sidecoin can also accept scBTC.  it's the scBTC that have the 2wp, as you say.  therefore, any miner mining the SC gets 3 revenue streams; scBTC and sidecoin tx fees and sidecoin block rewards.  this is why they will MM and eventually directly mine if enough scBTC appears on the SC.

I don't believe this is quite exact.

A SC with a sidecoin will reward BTC locked into this sidechain with a deterministic amount of scBTC (not 1:1). For example 1 BTC will get you 5000 scBTC. From that point on these sidecoins have a floating exchange rate. If the sidechain fails to attract speculators/users than the exchange rate is more expensive ex: it now cost you 10000 scBTC to redeem 1 BTC.

For that reason, sidecoins are exactly like altcoins

the dev can design the peg and the SC with any properties he wants.  he could design the exact scenario i outline; a SC with a 1:1 peg for BTC <--> scBTC that also issues a block reward for a new sidecoin while at the same time processing scBTC and sidecoin tx for fees.

this would definitely attract MM initially, and if highly successful, defecting Bitcoin miners who direct mine the SC.
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November 04, 2014, 03:29:12 AM
 #15538

how are those cheep coins working for you  Smiley OT can be as decentralized as using a BitTorrent client to assess the BitTorrent network, 100%  decentralized, and available without a prototypical change why so insistent SC are better?  

FYI inflation in value on a SC is what prevents one converting back into BTC, one want to use the value enabled by the SC, and if it isn't there you want to convert back the BTC.

I will be honest I haven't looked into OT in much details but if I understand it right, can the same concern you guys parade around not be applied to OT as well?

If OT gains traction and develops innovative utilities then is it not right that most txs would occur on their network and would be even more dangerous for the miners than SCs?

I'm not sure I understand your last comment. Value is not inflated using utility chains working with a 1:1 peg, the ledger is preserved and no additional coins are created.

"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, 03:31:25 AM
 #15539

you're not reading properly.  a SC with a sidecoin can also accept scBTC.  it's the scBTC that have the 2wp, as you say.  therefore, any miner mining the SC gets 3 revenue streams; scBTC and sidecoin tx fees and sidecoin block rewards.  this is why they will MM and eventually directly mine if enough scBTC appears on the SC.

I don't believe this is quite exact.

A SC with a sidecoin will reward BTC locked into this sidechain with a deterministic amount of scBTC (not 1:1). For example 1 BTC will get you 5000 scBTC. From that point on these sidecoins have a floating exchange rate. If the sidechain fails to attract speculators/users than the exchange rate is more expensive ex: it now cost you 10000 scBTC to redeem 1 BTC.

For that reason, sidecoins are exactly like altcoins

pg 11 Complexity:

On the level of assets, we no longer have a simple “one chain, one asset” maxim; individual
chains may support arbitrarily many assets, even ones that did not exist when the chain was first
created. Each of these assets is labelled with the chain it was transferred from to ensure that their
transfers can be unwound correctly.
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November 04, 2014, 03:31:29 AM
 #15540

you're not reading properly.  a SC with a sidecoin can also accept scBTC.  it's the scBTC that have the 2wp, as you say.  therefore, any miner mining the SC gets 3 revenue streams; scBTC and sidecoin tx fees and sidecoin block rewards.  this is why they will MM and eventually directly mine if enough scBTC appears on the SC.

I don't believe this is quite exact.

A SC with a sidecoin will reward BTC locked into this sidechain with a deterministic amount of scBTC (not 1:1). For example 1 BTC will get you 5000 scBTC. From that point on these sidecoins have a floating exchange rate. If the sidechain fails to attract speculators/users than the exchange rate is more expensive ex: it now cost you 10000 scBTC to redeem 1 BTC.

For that reason, sidecoins are exactly like altcoins

the dev can design the peg and the SC with any properties he wants.  he could design the exact scenario i outline; a SC with a 1:1 peg for BTC <--> scBTC that also issues a block reward for a new sidecoin while at the same time processing scBTC and sidecoin tx for fees.

this would definitely attract MM initially, and if highly successful, defecting Bitcoin miners who direct mine the SC.

The moment an additional coined is issued on the sidechain that cannot be redeemed 1:1 with BTC ALL the coins on that sidechain become sidecoins.

"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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