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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1805799 times)
Adrian-x
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November 07, 2014, 09:53:19 PM
 #16201

breaking the link btwn BTC the currency, from BTC the blockchain?

The "breaking the link" is pure marketing. You may be right that it is harmful marketing try to promote the idea of breaking that link. I consider it deceptive at best.

BTC-the-currency still has all 21 million on the main chain with or without sidechains. Some may be locked, some lost, some not yet mined, but they never go anywhere. They are on the main chain ever and always.


If you've read every post here Justice nailed it with this post.
https://bitcointalk.org/index.php?topic=68655.msg9448208#msg9448208

I don't for a second believe Austin Hill thinks like you do.

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Adrian-x
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November 07, 2014, 10:04:31 PM
 #16202

i think the true answer is, "it's impossible to know".  a loss of that magnitude would wipe out alot of Bitcoin's most ardent supporters, eliminate the perception of SOV, and could set the community back 100 yrs.  in that sense, the BTC price could tank.  i know i wouldn't trust crypto devs anymore in my lifetime if i lost scBTC from that scenario.  or, yes, it could "make all our BTC more valuable!"  that's certainly the conventional thinking around here.

the difference with your gold example is that i doubt the Chinese had any idea a Spanish armada ship laden with gold went to the bottom of the Atlantic.  today, we have the internet and the media would be all over it.

that's a fair statement but again, how does sidechain increase the risks of BTCs being lost to centralized, malicious or corrupted scheme?

if you believe Odalv, there are going to be billions of these federated server models of private community SC's doing their thing w/o MM.  that's where problems could arise.

In my mind those are the non threatening applications. They are already materializing and will come to dominate with or without the this SC proposed protocol change.

It's the MM decentralized verily that pose a threat to the Bitcoin incentive structure. That combination is why I tread with cation.

And BlockStream should do a pier reviewed economic study.

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November 07, 2014, 10:05:05 PM
 #16203

breaking the link btwn BTC the currency, from BTC the blockchain?

The "breaking the link" is pure marketing. You may be right that it is harmful marketing try to promote the idea of breaking that link. I consider it deceptive at best.

BTC-the-currency still has all 21 million on the main chain with or without sidechains. Some may be locked, some lost, some not yet mined, but they never go anywhere. They are on the main chain ever and always.


If you've read every post here Justice nailed it with this post.
https://bitcointalk.org/index.php?topic=68655.msg9448208#msg9448208

I don't for a second believe Austin Hill thinks like you do.

Never has it been said anywhere that the link between the blockchain and BTC should be broken.

What Blockstream, and Adam Hill, are proposing is to allow the BTC to move between subchains and not be restricted to Bitcoin's blockchain features.

In the end, the BTC locked on a sidechain is still accounted for on the mainchain, as rocks has discussed.

"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 07, 2014, 10:11:24 PM
 #16204

I would feel far more comfortable if over the next 2 years we cleaned up the code we had, commenting it, and reconciling it with projects like btcd addressing the bug for bug issues that propagate over time. before introducing more financial complexity.  I empathize with the community as a whole to add features they think will increase their investment, however, i would rather see the code base fare more secure - and a stable foundation before adding new dependencies.

Wladimir van der Laan, the new Bitcoin Core lead dev, on the same thread linked
above said that they are working on separating the consensus code from all the rest.
The first step will be a script verification library to be first introduced in 0.10 and
extended to other parts of consensus code by 0.11

So I think that the direction the project is moving toward is the one you aimed,
having "stable foundation" to build things on top.  

Bitcoin is a participatory system which ought to respect the right of self determinism of all of its users - Gregory Maxwell.
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November 07, 2014, 10:12:04 PM
 #16205

i think the true answer is, "it's impossible to know".  a loss of that magnitude would wipe out alot of Bitcoin's most ardent supporters, eliminate the perception of SOV, and could set the community back 100 yrs.  in that sense, the BTC price could tank.  i know i wouldn't trust crypto devs anymore in my lifetime if i lost scBTC from that scenario.  or, yes, it could "make all our BTC more valuable!"  that's certainly the conventional thinking around here.

the difference with your gold example is that i doubt the Chinese had any idea a Spanish armada ship laden with gold went to the bottom of the Atlantic.  today, we have the internet and the media would be all over it.

that's a fair statement but again, how does sidechain increase the risks of BTCs being lost to centralized, malicious or corrupted scheme?

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
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November 07, 2014, 10:14:42 PM
 #16206

What Blockstream, and Adam Hill, are proposing is to allow the BTC to move between subchains and not be restricted to Bitcoin's blockchain features.


this is conceptually how i view SC's.  to me, the 2wp is just a pass thru with hopefully solid math to allow scBTC to return to MC.
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November 07, 2014, 10:23:37 PM
 #16207


Never has it been said anywhere that the link between the blockchain and BTC should be broken.

What Blockstream, and Adam Hill, are proposing is to allow the BTC to move between subchains and not be restricted to Bitcoin's blockchain features.

In the end, the BTC locked on a sidechain is still accounted for on the mainchain, as rocks has discussed.
I don't think you understand what I've beet talking about and why SideChains are interesting to financial asset management companies.

Bitcoin the private key has no value, securing it in a SC doesn't secure value stored in the Bitcoin blockchain, (just like securing my keys on an offline computer can't secure the value in the blockchain)  only now it could be allowed to freely move into the SideChain. This is new this is a big change, this changes how I see Bitcoin, there are pros and cons, I'm not interested in understand the pros I have a lifetime to explore those I want to understand the cons.

And your not helping.

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smooth
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November 07, 2014, 10:31:48 PM
 #16208

breaking the link btwn BTC the currency, from BTC the blockchain?

The "breaking the link" is pure marketing. You may be right that it is harmful marketing try to promote the idea of breaking that link. I consider it deceptive at best.

BTC-the-currency still has all 21 million on the main chain with or without sidechains. Some may be locked, some lost, some not yet mined, but they never go anywhere. They are on the main chain ever and always.


If you've read every post here Justice nailed it with this post.
https://bitcointalk.org/index.php?topic=68655.msg9448208#msg9448208

I don't for a second believe Austin Hill thinks like you do.

Never has it been said anywhere that the link between the blockchain and BTC should be broken.

What Blockstream, and Adam Hill, are proposing is to allow the BTC to move between subchains and not be restricted to Bitcoin's blockchain features.

That is breaking the link.

They are taking the Bitcoin brand and applying it to their (and others' but I think they are more concerned with theirs) sidechain coin, which is not Bitcoin but is another coin backed by Bitcoin held in reserve.

If Bitcoin were a defended trademark this appropriation would likely not be allowed. As a practical factual matter it is also untrue. The actual Bitcoin do not and can not leave the Bitcoin blockchain.

They may get away with it though, because as others have pointed out here, the Bitcoin-the-currency/Bitcoin-the-blockchain meme is popular and spreading.
Adrian-x
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November 07, 2014, 10:32:13 PM
 #16209

I would feel far more comfortable if over the next 2 years we cleaned up the code we had, commenting it, and reconciling it with projects like btcd addressing the bug for bug issues that propagate over time. before introducing more financial complexity.  I empathize with the community as a whole to add features they think will increase their investment, however, i would rather see the code base fare more secure - and a stable foundation before adding new dependencies.

Wladimir van der Laan, the new Bitcoin Core lead dev, on the same thread linked
above said that they are working on separating the consensus code from all the rest.
The first step will be a script verification library to be first introduced in 0.10 and
extended to other parts of consensus code by 0.11

So I think that the direction the project is moving toward is the one you aimed,
having "stable foundation" to build things on top.  

Music to my ears. They should take as much time as possible to perfect each step. before adding to the code base.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
brg444
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November 07, 2014, 10:33:07 PM
 #16210

i think the true answer is, "it's impossible to know".  a loss of that magnitude would wipe out alot of Bitcoin's most ardent supporters, eliminate the perception of SOV, and could set the community back 100 yrs.  in that sense, the BTC price could tank.  i know i wouldn't trust crypto devs anymore in my lifetime if i lost scBTC from that scenario.  or, yes, it could "make all our BTC more valuable!"  that's certainly the conventional thinking around here.

the difference with your gold example is that i doubt the Chinese had any idea a Spanish armada ship laden with gold went to the bottom of the Atlantic.  today, we have the internet and the media would be all over it.

that's a fair statement but again, how does sidechain increase the risks of BTCs being lost to centralized, malicious or corrupted scheme?

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

well essentially you're suggesting the coins were initially transferred to a non-secure scheme without proper due diligence from the owner so my answer is no, this is not a "new" risk.

"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 07, 2014, 10:37:19 PM
 #16211

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

well essentially you're suggesting the coins were initially transferred to a non-secure scheme without proper due diligence from the owner so my answer is no, this is not a "new" risk.

Can you help me understand how do we do this without the side chains?
For example, using an alt coin does something quite different:
If I sell bitcoin for an alt coin which turns out to be a long con scam, but before the scam was sprung, I had traded them to a different alt coin, I could still trade that second alt coin for BTC, and the BTC I initially traded away are not essentially "burned" they are still being exchanged on MC by whomever got them from me.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
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November 07, 2014, 10:37:32 PM
 #16212

spv proof

I can tell you only what is in whitepaper. (crystal clear)
Quote
"We observe that Bitcoin’s blockheaders can be regarded as an example of a dynamic-membership multi-party signature (or DMMS ),
which we consider to be of independent interest as a new type of group signature"

This new signature can be verified by Bitcoin ... or for begging  oracle can verify DMMS  and if is valid  then oracle will sign Bitcoin multi-signature transaction.

yes, but that's for getting BTC--->scBTC.  how does scBTC get exchanged while on SC other than simply by localtrading p2p w/o centralizing it?

No oracle is on SC and oracle check SC.
It is same chain as Bitcoin
It know longest SC b/c it is same as every bitcoin client can verify

 and is unlocking bitcoins in MC by signing bitcoin transaction in MC.

?

maybe i can answer my own question.  once someone holds scBTC, they can transact just like they would with BTC except being able to take advantage of faster tx and anonymity be it online or p2p.  my question is that these same scBTC can be traded with other scBTC holders.  i suppose that could be p2p as well but if done on a centralized exchange that doesn't advance our anonymity desires.  which is what i was getting at to address your question about how a SC may or may not be analogous to mtgox.

Now this new SC is same as original Bitcoin + has native support for new signatures (SPV, SNARK ...) -> new version of bitcoin.
Now inside this SC, it is possible to create new SCs (eg fastWallet, exchanges, ...)

you don't mean another second SC for fastWallet and exchanges, do you?  b/c i would consider that a disadvantage as that would mean BTC would have to traverse 2 separate SPV proofs with contest/confirmation periods in order to get to 2nd SC which would increase risk of escaping SC's in general in an emergency due to time delays and technical failures.  

i would hope fastWallet exchanges  would be decentralized and anonymous and exist on the 1st SC away from Bitcoin.  

I think I'll not need create more oracles inside SC b/c bitcoinSC may support it. I'm not sure. I have to go for now.

i sure love your imagination with these things.  it's so much more imaginative and mind expanding than some others around here.

i agree with you. there are going to be billions of these things!

Thank you. (I'm not owner/creator of SC idea)
I like SC idea .. I'm glad if my explanation can help.
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November 07, 2014, 10:37:40 PM
 #16213

That is breaking the link.

They are taking the Bitcoin brand and applying it to their (and others' but I think they are more concerned with theirs) sidechain coin, which is not Bitcoin but is another coin backed by Bitcoin held in reserve.

If Bitcoin were a defended trademark this appropriation would likely not be allowed. As a practical factual matter it is also untrue. The actual Bitcoin do not and can not leave the Bitcoin blockchain.

They may get away with it though, because as others have pointed out here, the Bitcoin-the-currency/Bitcoin-the-blockchain meme is popular and spreading.

Hmm I hope you realise the contradiction in your comment here : if the "actual Bitcoin do not and can not leave the Bitcoin blockchain" then no "that is *not* breaking the link.

I do understand your argument though and I don't see any malicious intent in the marketing of their scheme as "Bitcoin moving across" chain. It is simply easier for everyone to understand and if the math are properly implemented making the algorithmic peg safe & sound then while it may be true it is not the actual Bitcoin that is moved to the sidechain, its representing unit is as close to bitcoin as anything can be.

"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 07, 2014, 10:47:36 PM
 #16214


That is breaking the link.

They are taking the Bitcoin brand and applying it to their (and others' but I think they are more concerned with theirs) sidechain coin, which is not Bitcoin but is another coin backed by Bitcoin held in reserve.

If Bitcoin were a defended trademark this appropriation would likely not be allowed. As a practical factual matter it is also untrue. The actual Bitcoin do not and can not leave the Bitcoin blockchain.

They may get away with it though, because as others have pointed out here, the Bitcoin-the-currency/Bitcoin-the-blockchain meme is popular and spreading.

Well it hasn't come to pass yet, that idea atm remains fiction.

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November 07, 2014, 10:51:31 PM
 #16215

i think the true answer is, "it's impossible to know".  a loss of that magnitude would wipe out alot of Bitcoin's most ardent supporters, eliminate the perception of SOV, and could set the community back 100 yrs.  in that sense, the BTC price could tank.  i know i wouldn't trust crypto devs anymore in my lifetime if i lost scBTC from that scenario.  or, yes, it could "make all our BTC more valuable!"  that's certainly the conventional thinking around here.

the difference with your gold example is that i doubt the Chinese had any idea a Spanish armada ship laden with gold went to the bottom of the Atlantic.  today, we have the internet and the media would be all over it.

that's a fair statement but again, how does sidechain increase the risks of BTCs being lost to centralized, malicious or corrupted scheme?

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

this scenario is helpful in conceptualizing what is happening. 

the "BTC is locked up on the MC in UTXO and never leaves" potentially gives a false impression that there will always be 21M.  it tempts one to ignore what's happening beyond the other side of the 2wp out there in SC world.  the pass thru model forces one to consider and concentrate on what is going on out there as these scBTC are jumping from SC to SC each one of each could fail or be a scam.  assuming there will be attrition of scBTC over time, the conclusion is there will always be <21M ever decreasing.
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November 07, 2014, 10:55:46 PM
 #16216

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

well essentially you're suggesting the coins were initially transferred to a non-secure scheme without proper due diligence from the owner so my answer is no, this is not a "new" risk.

Can you help me understand how do we do this without the side chains?
For example, using an alt coin does something quite different:
If I sell bitcoin for an alt coin which turns out to be a long con scam, but before the scam was sprung, I had traded them to a different alt coin, I could still trade that second alt coin for BTC, and the BTC I initially traded away are not essentially "burned" they are still being exchanged on MC by whomever got them from me.

It doesn't matter if you transfer it to a second, third or fourth sidechain. The onus of your decision is in validating the security of your initial transfer off the Bitcoin mainchain.

Either you keep your Bitcoin on chain or you take the risk of trusting some other scheme with your coins. What is the incentive? What are the risks? Any ensuing event will be a consequence of that decision. Once you leave the mainchain you forego your position in the only established trustless crypto environment.


"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 07, 2014, 11:04:01 PM
 #16217


That is breaking the link.

They are taking the Bitcoin brand and applying it to their (and others' but I think they are more concerned with theirs) sidechain coin, which is not Bitcoin but is another coin backed by Bitcoin held in reserve.

If Bitcoin were a defended trademark this appropriation would likely not be allowed. As a practical factual matter it is also untrue. The actual Bitcoin do not and can not leave the Bitcoin blockchain.

They may get away with it though, because as others have pointed out here, the Bitcoin-the-currency/Bitcoin-the-blockchain meme is popular and spreading.

Well it hasn't come to pass yet, that idea atm remains fiction.

I'm sorry but you guys are confusing two ideologies for one.

Blockstream's idea, whether you support it or not, does not suggest that the Blockchain can be supported without Bitcoin.

The meme Peter R was referring to is the one parroted by mainstream media pretending that Blockchain tech does not need its own native currency. "Why not use it to trade USD"


"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 07, 2014, 11:04:44 PM
 #16218

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

well essentially you're suggesting the coins were initially transferred to a non-secure scheme without proper due diligence from the owner so my answer is no, this is not a "new" risk.

Can you help me understand how do we do this without the side chains?
For example, using an alt coin does something quite different:
If I sell bitcoin for an alt coin which turns out to be a long con scam, but before the scam was sprung, I had traded them to a different alt coin, I could still trade that second alt coin for BTC, and the BTC I initially traded away are not essentially "burned" they are still being exchanged on MC by whomever got them from me.

It doesn't matter if you transfer it to a second, third or fourth sidechain. The onus of your decision is in validating the security of your initial transfer off the Bitcoin mainchain.

Either you keep your Bitcoin on chain or you take the risk of trusting some other scheme with your coins. What is the incentive? What are the risks? Any ensuing event will be a consequence of that decision. Once you leave the mainchain you forego your position in the only established trustless crypto environment.



we're worried about ordinary ppl who in the future might want to get into Bitcoin.   they won't have the technical expertise or knowledge to know what's going on.  as we've seen from altcoins, they can always attract a crowd be it with deception or true value.  to think that SC's changes this is to be determined.  you did see my post from earlier today?

it's starting already.

Truthcoin, enabled by SC's!

http://www.truthcoin.info/
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November 07, 2014, 11:15:46 PM
 #16219

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

well essentially you're suggesting the coins were initially transferred to a non-secure scheme without proper due diligence from the owner so my answer is no, this is not a "new" risk.

Can you help me understand how do we do this without the side chains?
For example, using an alt coin does something quite different:
If I sell bitcoin for an alt coin which turns out to be a long con scam, but before the scam was sprung, I had traded them to a different alt coin, I could still trade that second alt coin for BTC, and the BTC I initially traded away are not essentially "burned" they are still being exchanged on MC by whomever got them from me.

It doesn't matter if you transfer it to a second, third or fourth sidechain. The onus of your decision is in validating the security of your initial transfer off the Bitcoin mainchain.

Either you keep your Bitcoin on chain or you take the risk of trusting some other scheme with your coins. What is the incentive? What are the risks? Any ensuing event will be a consequence of that decision. Once you leave the mainchain you forego your position in the only established trustless crypto environment.

brg444 once one understands the maths you may be correct.
i imagine NewLiberty scenario could be done by introducing some other cryptographic way to spoof steel the BTC from the scBTC and still trade unbaked scBTC coin on the open market.

I still feel more comfortable holding centralized entities accountable for stealing BTC and not say an autonomous SC- Satoshi inventor with nefarious intentions with hidden code that goes unnoticed for a a few years.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
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November 07, 2014, 11:22:29 PM
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i think the true answer is, "it's impossible to know".  a loss of that magnitude would wipe out alot of Bitcoin's most ardent supporters, eliminate the perception of SOV, and could set the community back 100 yrs.  in that sense, the BTC price could tank.  i know i wouldn't trust crypto devs anymore in my lifetime if i lost scBTC from that scenario.  or, yes, it could "make all our BTC more valuable!"  that's certainly the conventional thinking around here.

the difference with your gold example is that i doubt the Chinese had any idea a Spanish armada ship laden with gold went to the bottom of the Atlantic.  today, we have the internet and the media would be all over it.

that's a fair statement but again, how does sidechain increase the risks of BTCs being lost to centralized, malicious or corrupted scheme?

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC1.
2) Some scBTC1 is SPV'd to scBTC2.
3) scBTC1 is discovered to be a scam (or just a bad implementation) whereas scBTC1coin massively inflates so that no one on scBTC2 has any incentive to SPV back from scBTC2 to scBTC1 and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

this scenario is helpful in conceptualizing what is happening.  

the "BTC is locked up on the MC in UTXO and never leaves" potentially gives a false impression that there will always be 21M.  it tempts one to ignore what's happening beyond the other side of the 2wp out there in SC world.  the pass thru model forces one to consider and concentrate on what is going on out there as these scBTC are jumping from SC to SC each one of each could fail or be a scam.  assuming there will be attrition of scBTC over time, the conclusion is there will always be <21M ever decreasing.

Whether the BTC are transferred to one sidechain or to multiple links of the sidechains, the result is the same. Either:

1) Bitcoin is the backing reserve asset to any linked scBTC. If so then convertibility is maintained and Bitcoin functions as the security mechanism, or

2) scBTC jump from SC to SC (as your example) and one sidechain in the link breaks, which breaks the link back to the underlying backing BTC. This however in effect converts that scBTC into an altcoin, those scBTC are no longer convertible with BTC and Bitcoin is no longer providing the underlying security.

Such a situation converts a SC into an altcoin.

I'm fine with that because the market is showing how network effects are slowly crushing altcoins. Once an SC converts into an altcoin, it now loses all network effects and is cast off on it's own. It now functions separately from the entire bitcoin ecosystem and can not be used with that ecosystem. Such an altcoin I believe will lose value and diminish to nothingness. You can't hide this from users, they are now locked out of the rest of the bitcoin ecosystem, that is huge.

Altcoins scare the crap out of me, the are the only threat to the Sound Money principle. But as stated before network effects seem to be properly working, I expect that to continue.

The pegging mechanism ensures convertibility, which exposes if the sidechain is #1 or #2. If a sidechain breaks convertibility, it becomes #2 it is now an altcoin.
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