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Author Topic: Gold collapsing. Bitcoin UP.  (Read 2011638 times)
Odalv
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November 06, 2014, 01:54:10 PM
 #15981

who here has gone thru the math in Appendix B on SPV proofs?  is it sound and how does a compact SPV proof work in practical terms?

also, what is the structure of a SC?  does it start at the same block height (328739) as Bitcoin on day 1 with a complete history going back to the genesis block or does it start at it's own Block 1 w/o a coinbase?

i assume the crypto would be the same?  ECDSA and sha256, ripemd160?

New SC starts when peg is created (bitcoins are locked). All credibility for SC is in MC.
It does not matters what crypto will SC use. (it can use any cypto)

example:
SC can create paper coupons, this coupons is backed by bitcoin. (no new coupons can be created, only by depositing more bitcoins)
 - there is not digital ledger in couponSC
 - transaction are doing exchanging coupon by hand
 - somebody is doing 2wp exchanging coupons for BTC
 - no changes to existing bitcoin protocol is needed.

Some people in africa may find this useful. There is no way paper coupons can affect your bitcoins.
Only users of paper coupons take risk if they exchange this coupons for BTC they already owned and locked in MC.

Again "It does not matters what crypto will SC use. "

Yes... it does matter.
If a SC uses a compromised crypto, say one that incorporates key escrow, then the one with the escrowed keys can redeem the bitcoin that have been sent to the side chain.
Advocating for blind trust of all SC just on the merits that they are SC, is not a service to your readers.

There are 2 different things. 2wp(escrow), and side-blockchain crypto

LOL, of course the notion of 2wp and the cryptography used to accomplish it are different things.  That is however orthagonal to the point that the cryptography used to accomplish it does matter, it matters quite a bit.

Here are some simple ways that it matters, there are many others.
1) It is either compatible with the ASICs used for MC mining, or not (this matters for merge mining potential).

I can use any crypto, even no crypto :-) eg.  chain or tree of hashes + hashing oracle
Then I can use last/root-hash and ask MC to timestamp for fees => side side-chain block was mined and No MM is needed.

Quote
2) It is either using a key escrow or not (this would allow the initiator of the side chain to seize any of the side chain that doesn't comply with its rules - like the govSC discussed earlier).

this is 2wp ->
 - it can be single entity like Mark Karppeles :-)
 - or it can be created using multisig (functionaries). see "Appendix A  Fedearted Peg".  Some functionaries can be Human (They have power of brain), some functionaries  can be software who can annalyse sidechain
 - or it can be Bitcoin with OP_SIDECHAINPROOFVERIFY

Quote
3) It is either a well established cryptographc algorithm or not.
4) The algorithm uses cryptographic primitives which are either compromised or not.
5) The algorithm is either conducive to a PoW structure, or not.

If what you mean by "it doesn't matter what crypto SC will use" is that SC can use any crypto, good bad or ugly, then we agree.  I would just suggest that it does matter whether the crypto is good bad or ugly.

If sidechain is not safe enough then I'll not use it.
But we can build safe SC and "it doesn't matter what crypto SC will use"  b/c it depends what SC will do. It can be Exchange, WebWallet .. Circle

Exchange will not own Bitcoin. Btc are in escrow by 2wp. This can be different party who is able to verify Exchange SPV proof.
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November 06, 2014, 01:57:35 PM
 #15982

....
Then we agree.
Side chains accommodate arbitrary crypto (good bad or ugly) and which crypto is used for a particular chain matters.

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November 06, 2014, 02:21:10 PM
 #15983

....
Then we agree.
Side chains accommodate arbitrary crypto (good bad or ugly) and which crypto is used for a particular chain matters.

It is my understanding that while the transactions can use arbitrary crypto, block hashing would be limited to sha256 (or possibly a small list of others).  In order to ensure a malicious attacker can not simply lie, the bitcoin miners supporting SPV proofs will need to verify the block hash is valid for the headers provided.  The transaction's details that destroy the pegged coin and unlock the bitcoin will be used, but the signature can be trusted since it is in the block with the highest amount of work.  If nobody presents a higher difficulty block header that contains a contradicting transaction within the contest period, the bitcoins unlock.  But, to verify all this, the miners must be able to hash the headers.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
12jh3odyAAaR2XedPKZNCR4X4sebuotQzN
brg444
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November 06, 2014, 02:27:14 PM
 #15984

Its pretty exhausting because it is difficult to determine what you are trying to communicate.
This post in particular is merely self contradictory rhetoric.  It doesn't contain any reasoned arguments.
Parse it yourself and you will see...

Either (a) side chains have no capability to "mess with" Bitcoin, or (b) they are empowered to improve, ensure preservation, and adaptability...  

Then, you claim to know the purpose of side chains.  As if there is only one purpose that *the people* that create side chains can have.  This is an outlandishly impossible claim to make.

Followed by another self contradiction.  Either (a) side chains do not change the incentive structure, or (b) they improve it.  Both of these can not be true.


I think you should just stop advocating for side chains.  You are a bad spokesperson for the cause.  People will read these posts of yours and get the idea that someone is hyping SC for some nefarious purpose, because these posts of yours just don't make sense, and not even internally consistent with itself.  

I knew this would be your argument, and yes, I can see how it might sound contradictory.

Adrian's use of those terms, "mess with" and "change", were made in a notably pejorative way. My point is that these changes are, IMO, for the better. Someone could have a different opinion but while you accuse me of not making sense, the same could be said of much of the arguments made against SC so far in this thread.

"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 06, 2014, 02:32:03 PM
 #15985

Its pretty exhausting because it is difficult to determine what you are trying to communicate.
This post in particular is merely self contradictory rhetoric.  It doesn't contain any reasoned arguments.
Parse it yourself and you will see...

Either (a) side chains have no capability to "mess with" Bitcoin, or (b) they are empowered to improve, ensure preservation, and adaptability...  

Then, you claim to know the purpose of side chains.  As if there is only one purpose that *the people* that create side chains can have.  This is an outlandishly impossible claim to make.

Followed by another self contradiction.  Either (a) side chains do not change the incentive structure, or (b) they improve it.  Both of these can not be true.


I think you should just stop advocating for side chains.  You are a bad spokesperson for the cause.  People will read these posts of yours and get the idea that someone is hyping SC for some nefarious purpose, because these posts of yours just don't make sense, and not even internally consistent with itself.  

And yes, of course I can proclaim to know the purpose of sidechain.

It is perfectly obvious to anyone who has taken some time to study them and observe what they enable and what they don't. It is simple deduction using the premise that altcoins existed before sidechains therefore sidechains did not come about to enable 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 06, 2014, 02:42:45 PM
 #15986

"There is one ledger"
Is untrue if (as it appears) you are referring to the side chain and Bitcoin, and true only if you are referring only to Bitcoin.
Each side chain has its own ledger, its own block chain.
Understanding side chains is much easier than understanding your descriptions of them. 

"There is one ledger to rule them all" is, I believe, the correct statement. Yes, sidechains create sub-ledgers but their scarcity is dependent upon Bitcoin's

"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 06, 2014, 02:55:36 PM
 #15987

The problem that you share with brg444 is that you not only make claims which are unsubstantiated and too grand, you also encourage discounting of reasonable risks and concerns.  This "answers" criticism without explaining it, which should not be your goal if you are looking for agreement with your position.

You do realise that most if not everyone of the concerns put forward by SC opponents in this thread can be qualified as "unsubstantiated and too grand"?

I'm sorry but all myself, and some others, in this thread have been doing is encourage discounting unreasonable risks and concerns

"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 06, 2014, 02:58:03 PM
 #15988

LOL, of course the notion of 2wp and the cryptography used to accomplish it are different things.  That is however orthagonal to the point that the cryptography used to accomplish it does matter, it matters quite a bit.

Here are some simple ways that it matters, there are many others.
1) It is either compatible with the ASICs used for MC mining, or not (this matters for merge mining potential).
2) It is either using a key escrow or not (this would allow the initiator of the side chain to seize any of the side chain that doesn't comply with its rules - like the govSC discussed earlier).
3) It is either a well established cryptographc algorithm or not.
4) The algorithm uses cryptographic primitives which are either compromised or not.
5) The algorithm is either conducive to a PoW structure, or not.

If what you mean by "it doesn't matter what crypto SC will use" is that SC can use any crypto, good bad or ugly, then we agree.  I would just suggest that it does matter whether the crypto is good bad or ugly.

This is so obvious to anyone reading this thread I'm not sure why it deserves to be mentioned.

Did you somehow think it escaped us that some SC could be used for nefarious purposes? That we believe ALL SC should be trusted?

"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 06, 2014, 03:01:25 PM
 #15989

....
Then we agree.
Side chains accommodate arbitrary crypto (good bad or ugly) and which crypto is used for a particular chain matters.

It is my understanding that while the transactions can use arbitrary crypto, block hashing would be limited to sha256 (or possibly a small list of others).  In order to ensure a malicious attacker can not simply lie, the bitcoin miners supporting SPV proofs will need to verify the block hash is valid for the headers provided.  The transaction's details that destroy the pegged coin and unlock the bitcoin will be used, but the signature can be trusted since it is in the block with the highest amount of work.  If nobody presents a higher difficulty block header that contains a contradicting transaction within the contest period, the bitcoins unlock.  But, to verify all this, the miners must be able to hash the headers.

Is  it possible for attackers to do this in reverse?

Take someone's cold wallet and lock them into an SPVPROOF on a SC while the true owner is indisposed for some reason? Or is this impossible because they would need the private keys to begin with? 
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November 06, 2014, 03:07:33 PM
 #15990

My Noob Questions:

Say a sidechain were created for paypal:

Would paypal have to buy existing coins and move them to sidechain?

When in that sidechain these coins would have same fiat price as existing chain coins?

The better question is what is the use case for a paypal chain?

Paypal is used to send money over the world. Bitcoin does that natively so honestly I don't see it.



I think a corp of that size could build a "buyer protection" scheme, just as they do for fiat now. It would work like this:

Merchants have to register with paypal, photo ID, prooof of address, bank account info etc.

Buyers can contest trades, and will get refund if they can prove non delivery or defective goods etc.

Paypal instantly refunds buyer and then collects off seller by taking coin/fiat from account or if none then suspending account.

Why would a sidechain be needed for this? Maybe it wouldn't but paypal might want to have extra features giving an element of central control to the new blockchain, like each transaction is multisig and they always have a needed key. Pure speculation on my part here.

But regardless of paypal I am still interested to know if existing coin debasement can occur through SC.

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November 06, 2014, 03:10:36 PM
 #15991

geezuz crimony.  i actually AM starting to feel bad...

Maybe this will lessen the bad... hmmmm... maybe not  Shocked

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November 06, 2014, 03:16:49 PM
 #15992


Did you somehow think it escaped us that some SC could be used for nefarious purposes? That we believe ALL SC should be trusted?

Sounds like we have a core dev in our midst. 
Odalv
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November 06, 2014, 03:18:04 PM
 #15993

....
Then we agree.
Side chains accommodate arbitrary crypto (good bad or ugly) and which crypto is used for a particular chain matters.

It is my understanding that while the transactions can use arbitrary crypto, block hashing would be limited to sha256 (or possibly a small list of others).  In order to ensure a malicious attacker can not simply lie, the bitcoin miners supporting SPV proofs will need to verify the block hash is valid for the headers provided.  The transaction's details that destroy the pegged coin and unlock the bitcoin will be used, but the signature can be trusted since it is in the block with the highest amount of work.  If nobody presents a higher difficulty block header that contains a contradicting transaction within the contest period, the bitcoins unlock.  But, to verify all this, the miners must be able to hash the headers.

Is  it possible for attackers to do this in reverse?

Take someone's cold wallet and lock them into an SPVPROOF on a SC while the true owner is indisposed for some reason? Or is this impossible because they would need the private keys to begin with? 

The only safe cold wallet is in MC. And bitcoin cannot be moved to SPVPROOF bitcoin address without private key.
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November 06, 2014, 03:23:30 PM
 #15994

You should have ended that particular sentence with the first phrase.
I can't understand what you mean.

Your statement:
Quote from: Dusty
Again, I don't know if the 2wp using SPV could work as defined, but if they to, SC would solve all the problems Bitcoin has today and guarantee his success in the way forward.

Side chains per se, do not solve all the problems Bitcoin has today, nor are they a guarantee of anything.
What they are is a mechanism.  They may have the potential to solve problems.  That will depend entirely on what people do with them.  They are another tool in the tool belt.  It can be used to build or destroy.  The existence of this mechanism does not guarantee the success of Bitcoin.  It would be nice if it did, and we could all just sit back and wait for the magic to happen.

Instead there is a new tool, a new mechanism.  It may be used by all sorts of people, and groups.  This is great, it is the nature of open source collaboration.  However we must recognize that only some people may share common goals with you or me, and others may not.  And you may not know whether any particular SC creator does or doesn't.  There may be wolves in alpaca clothing.

These are the sorts of things that I (and presumably CypherDoc and others) consider with caution.  What makes this even more of a concern is when we see these posts that essentially say "there is nothing to worry about", "this fixes everything" or "the details of the cryptography don't matter".
Those sort of statements are either (a) just misunderstood word choices (and something else was meant by the author), or (b) maybe the author is simply misguided or exuberant , or (c) perhaps they may be malicious attempts to misguide others.

If it is (a) it tends to get more clear with some attention.  If (b) it is worrisome that there are going to be coming disappointments when the hoped for effects don't materialize, and (c) is just expected and is dealt with in much the same way as (a).  


What you wrote here below is sensible.  We may disagree on some matters of preference, but I like that you say what side chains "can" do rather than what they "will" do.  It is important to understand that they can be used and also can be abused.  I think Cypherdoc is understanding the function and capabilities pretty well.  I also think his caution is reasonable.  Some SC may be great and solve some problems...And I think that there will be some SC that end up costing some people a LOT of their hard earned bitcoin due to fraud, misrepresentation, and blind trust.  So when I see folks saying "everything is great, Side Chains are here to save us" type stuff, all the red flags go up.

The problem that me, and seemingly a couple others, have with Cypherdoc's concerns is that most of them boil down to the creation of altcoins, something that sidechains did not introduce and do little to enable. I hope you have come to understand this part because the accusation that you make of SC proponents being "unreasonable" can equally be applied to most, if not all, of the SC opponents in this thread.

You seem to be a reasonable person who has a great ability to distill his ideas in thoughtful and concise manners. Maybe you want to share with us notable weaknesses of the 2wp and what considerable risks you can foresee?

"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 06, 2014, 03:28:17 PM
 #15995

We're going UP.

Last chance to get in the train.
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November 06, 2014, 03:28:32 PM
 #15996


Did you somehow think it escaped us that some SC could be used for nefarious purposes? That we believe ALL SC should be trusted?

Sounds like we have a core dev in our midst. 

 Cheesy



I think the obvious technical shortcomings I have displayed in this thread suggest this other brain fart of yours is not quite likely

"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 06, 2014, 03:41:23 PM
 #15997

We're going UP.

Last chance to get in the train.

I think that ~1% upward jolt a few minutes ago originated from ~1500 alot of BTC being market order purchased on BTC china.
All other exchanges arb bots went yummy spanning a few mins later. BTCe only did a small amount of the arb.

Yes get on the train, good chance of departure anytime now.
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November 06, 2014, 03:53:01 PM
 #15998

....
Then we agree.
Side chains accommodate arbitrary crypto (good bad or ugly) and which crypto is used for a particular chain matters.

It is my understanding that while the transactions can use arbitrary crypto, block hashing would be limited to sha256 (or possibly a small list of others).  In order to ensure a malicious attacker can not simply lie, the bitcoin miners supporting SPV proofs will need to verify the block hash is valid for the headers provided.  The transaction's details that destroy the pegged coin and unlock the bitcoin will be used, but the signature can be trusted since it is in the block with the highest amount of work.  If nobody presents a higher difficulty block header that contains a contradicting transaction within the contest period, the bitcoins unlock.  But, to verify all this, the miners must be able to hash the headers.

notme, you're into math.  you've looked at the SPV proof.  i take it you're satisfied.

can you distill it down for us non maths as to how it works and why we should take comfort?
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November 06, 2014, 03:55:00 PM
 #15999


Did you somehow think it escaped us that some SC could be used for nefarious purposes? That we believe ALL SC should be trusted?

Sounds like we have a core dev in our midst. 

 Cheesy



I think the obvious technical shortcomings I have displayed in this thread suggest this other brain fart of yours is not quite likely

We, we, Senor!!!
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November 06, 2014, 03:56:43 PM
 #16000


Did you somehow think it escaped us that some SC could be used for nefarious purposes? That we believe ALL SC should be trusted?

Sounds like we have a core dev in our midst. 

 Cheesy



I think the obvious technical shortcomings I have displayed in this thread suggest this other brain fart of yours is not quite likely

We, we, Senor!!!

as in : we, the proponents of SC.


"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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