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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1805739 times)
Odalv
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November 10, 2014, 08:09:21 PM
 #16481

I can see 2 main types of SC
 - "permissionless transition between the two chains"
 - SC used as firewall
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November 10, 2014, 08:37:38 PM
 #16482

Soo.. Gold up. Bitcoin up?


Cheesy
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November 10, 2014, 09:43:12 PM
 #16483

as far as altcoins and SC's are concerned, let me come at this question from another direction.  

right now, we have 538 altcoins in existence of varying kinds with diff security models.  what are SC's going to do to make all of them go away?
brg444 has said "someone" is going to reduce them to utility SC's w/o the altcoin but only with the "innovation" and that will be what causes their destruction.  really?  who's going to waste their time doing this for 538 altchains?  who's going to dev a utility chain for Doge inflation?  who's going to dev a utility chain for Freicoin demurrage? who is going to dev a chain for any one of the 538 altcoins most of which have weird monetary models?  let alone mine them to make them secure? the answer is NO ONE. it's b/c it's too much work and there is no upside to doing so for a Bitcoin minded dev precisely b/c there is no altcoin! Bitcoiners won't use them as well. ppl are supporting these altcoins precisely b/c they have speculative upside and most of the time don't involve the sound money properties of Bitcoin.  they will continue to exist as they are and is why you're not seeing a selloff since the whitepaper.  SC's do nothing to altcoins. which removes a major argument for SC adoption.

now, let' take it one step further.  if we now allow all of them to bolt themselves onto the Bitcoin MC via the 2wp with 1:1, i ask again, exactly what has changed and what is going to make all these go away?  first off, not only will they not go away but now i think they get stronger. it is fundamentally worse for Bitcoin.  i suggest that these altcoin devs are jumping with joy at the opportunity to get into the Bitcoin house and siphon away valuable BTC.  let's use Dogecoin as an example.

let me very clear about the scenario/mechanism and my assumptions here so brg444 won't distort them yet again.  i'm suggesting that there will be 2 separate coins riding on this new bolted on Doge SC, the original Dogecoin and the new scBTC created from the 2wp in a 1:1.  there will be a Doge blockchain that continues to create Doge from its own block rewards, which is inflationary as we know.  there will be tx fees generated by mining tx fees from both scBTC and Dogecoin. in this scenario, i'm suggesting the 2wp will only more easily facilitate the movement of BTC<-->scBTC<-->Doge b/c of the risk free put along with the logarithmic increase in advertising claims that Doge will be able to use as we've seen with Truthcoin (TC).  the exact opposite of what SC devs expect.  i am NOT saying that Doge will be able to convert directly to BTC via the 2wp. it will only be exchangeable for scBTC.  consider that Doge already has its own security.  it already has it's own brand.  it already has its own attraction.  it already has its own followers.  and it already has its own philosophy which happens to be different from Bitcoin.  it can advertise that philosophy with logarithmic intensity to those ordinary Bitcoiners (who only care to make a fast buck and may not care about the inflation) just like we've already seen happen with TC.  

furthermore, if successful at siphoning off BTC, Bitcoin miners might want to follow defecting users via direct mining as well as MM as they now have the revenue from Dogecoin block rewards, and tx fees from both Dogecoin and scBTC.  

you see, the problem with brg444 and the SC proponents is that they think everyone thinks like Bitcoiners do.  i got news for you, they don't.  that is what the whole speculative altcoin movement is about and SC's do nothing to change that.  in fact, it might make it much worse for us by letting those altcoins into the house next to our core engine business (MC) and sucking out valuable BTC.
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November 10, 2014, 09:50:02 PM
 #16484

...
Agree that having names for each of the varieties would make it easier to discuss.
I'm not fond of using the term "pegged sidechain" but that is what the Blockstream folks call them now.
I don't think a "peg" is a good thing.  Currency pegs have horrible implications, almost always fail, and I think calling them this brings them down, but I didn't choose the name.

If it was mine to name, I might have gone with "coin wrappers" or something without all the bad historical connotations.

I'd suggest 'lock' instead of 'peg'.  'Peg' brings up images of a cribbage board where pegs are moved around as needed, and that is also the failure mode of many currency peg schemes (I imagine.)

'Lock' is more indicative of what is happening here.  BTC are locked with high security to back a sidechain extension.  As always, the security is a function of the quality of the implementation of course, but it's pretty clear to me that quality in implementation will bubble to the top (very much unlike the opaque world of off-chain extensions that we have seen to date.)



You could call it a money substitute, except the delay is a problem, if it is substantial.
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November 10, 2014, 10:52:00 PM
 #16485

as far as altcoins and SC's are concerned, let me come at this question from another direction.  

right now, we have 538 altcoins in existence of varying kinds with diff security models.  what are SC's going to do to make all of them go away?
brg444 has said "someone" is going to reduce them to utility SC's w/o the altcoin but only with the "innovation" and that will be what causes their destruction.  really?  who's going to waste their time doing this for 538 altchains?  who's going to dev a utility chain for Doge inflation?  who's going to dev a utility chain for Freicoin demurrage? who is going to dev a chain for any one of the 538 altcoins most of which have weird monetary models?  let alone mine them to make them secure? the answer is NO ONE. it's b/c it's too much work and there is no upside to doing so for a Bitcoin minded dev precisely b/c there is no altcoin! ppl are supporting these altcoins precisely b/c they have speculative upside and most of the time don't involve the sound money properties of Bitcoin.  they will continue to exist as they are and is why you're not seeing a selloff since the whitepaper.  SC's do nothing to altcoins. which removes a major argument for their adoption.

now, let' take it one step further.  if we now allow all of them to bolt themselves onto the Bitcoin MC via the 2wp with 1:1, i ask again, exactly what has changed and what is going to make all these go away?  first off, not only will they not go away but now i think they get stronger. it is fundamentally for the worse for Bitcoin.  i suggest that these altcoin devs are jumping with joy at the opportunity to get into the Bitcoin house and siphon away valuable BTC.  let's use Dogecoin as an example.

let me very clear about the mechanism and my assumptions here so brg444 won't distort them yet again.  i'm suggesting that there will be 2 separate coins riding on this new bolted on Doge, the original Dogecoin and the new scBTC created from the 2wp in a 1:1.  there will be a Doge blockchain that continues to create Doge from its own block rewards, which is inflationary as we know.  there will be tx fees generated by mining tx fees from both scBTC and Doge. in this scenario, i'm suggesting the 2wp will only more easily facilitate the movement of BTC-->scBTC-->Doge b/c of the risk free put along with the logarithmic increase in advertising claims that Doge will be able to use as we've seen with TC.  the exact opposite of what SC devs expect consider that Doge already has its own security.  it already has it's own brand.  it already has its own attraction.  it already has its own followers.  and it already has its own philosophy which happens to be different from Bitcoin.  it can advertise that philosophy with logarithmic intensity to those ordinary Bitcoiners (who only care to make a fast buck and may not care about the inflation) just like we've already seen happen with TC.  

furthermore, if successful at siphoning off BTC, Bitcoin miners might want to follow via direct mining as well as MM as they now have the revenue from Doge block rewards, and tx fees from both Doge and scBTC.  

you see, the problem with brg444 and the SC proponents is that they think everyone thinks like Bitcoiners do.  i got news for you, they don't.  that is what the whole speculative altcoin movement is about and SC's do nothing to change that.  in fact, it might make it much worse for us by letting those guys into the house next to our core engine business and sucking out valuable BTC.

I have only 1 simple question. What can we do to prevent this ? (I mean, how NOT validating  SPV proof can save us from this disaster)
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November 10, 2014, 11:04:54 PM
 #16486

as far as altcoins and SC's are concerned, let me come at this question from another direction.  

right now, we have 538 altcoins in existence of varying kinds with diff security models.  what are SC's going to do to make all of them go away?
brg444 has said "someone" is going to reduce them to utility SC's w/o the altcoin but only with the "innovation" and that will be what causes their destruction.  really?  who's going to waste their time doing this for 538 altchains?  who's going to dev a utility chain for Doge inflation?  who's going to dev a utility chain for Freicoin demurrage? who is going to dev a chain for any one of the 538 altcoins most of which have weird monetary models?  let alone mine them to make them secure? the answer is NO ONE. it's b/c it's too much work and there is no upside to doing so for a Bitcoin minded dev precisely b/c there is no altcoin! ppl are supporting these altcoins precisely b/c they have speculative upside and most of the time don't involve the sound money properties of Bitcoin.  they will continue to exist as they are and is why you're not seeing a selloff since the whitepaper.  SC's do nothing to altcoins. which removes a major argument for their adoption.

now, let' take it one step further.  if we now allow all of them to bolt themselves onto the Bitcoin MC via the 2wp with 1:1, i ask again, exactly what has changed and what is going to make all these go away?  first off, not only will they not go away but now i think they get stronger. it is fundamentally for the worse for Bitcoin.  i suggest that these altcoin devs are jumping with joy at the opportunity to get into the Bitcoin house and siphon away valuable BTC.  let's use Dogecoin as an example.

let me very clear about the mechanism and my assumptions here so brg444 won't distort them yet again.  i'm suggesting that there will be 2 separate coins riding on this new bolted on Doge, the original Dogecoin and the new scBTC created from the 2wp in a 1:1.  there will be a Doge blockchain that continues to create Doge from its own block rewards, which is inflationary as we know.  there will be tx fees generated by mining tx fees from both scBTC and Doge. in this scenario, i'm suggesting the 2wp will only more easily facilitate the movement of BTC-->scBTC-->Doge b/c of the risk free put along with the logarithmic increase in advertising claims that Doge will be able to use as we've seen with TC.  the exact opposite of what SC devs expect consider that Doge already has its own security.  it already has it's own brand.  it already has its own attraction.  it already has its own followers.  and it already has its own philosophy which happens to be different from Bitcoin.  it can advertise that philosophy with logarithmic intensity to those ordinary Bitcoiners (who only care to make a fast buck and may not care about the inflation) just like we've already seen happen with TC.  

furthermore, if successful at siphoning off BTC, Bitcoin miners might want to follow via direct mining as well as MM as they now have the revenue from Doge block rewards, and tx fees from both Doge and scBTC.  

you see, the problem with brg444 and the SC proponents is that they think everyone thinks like Bitcoiners do.  i got news for you, they don't.  that is what the whole speculative altcoin movement is about and SC's do nothing to change that.  in fact, it might make it much worse for us by letting those guys into the house next to our core engine business and sucking out valuable BTC.

I have only 1 simple question. What can we do to prevent this ? (I mean, how NOT validating  SPV proof can save us from this disaster)


altcoins are slowly being ground down by Bitcoin.  but it's taking longer than expected no doubt.  but it will happen w/o SC's.

my only pt is that i think it's disingenuous to suggest that SC's will kill altcoins when in fact they may do the opposite by allowing them to tap into BTC by the 2wp.  i know brg444 will try to say there is no reason for current Bitcoiner's to migrate into a Doge.  that may be true for Doge but there are 537 others that might have just enough attraction for current BTC holders to do so.  it's not the Sound Money Bitcoiner's i'm worried about; it's the speculators holding BTC that might migrate or even the ones who bought up around $1200 who think Bitcoin has failed them.  and there are future generations of Bitcoiners who may think differently.

i think the 2wp lets them get too close.
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November 10, 2014, 11:15:52 PM
 #16487

as far as altcoins and SC's are concerned, let me come at this question from another direction.  

right now, we have 538 altcoins in existence of varying kinds with diff security models.  what are SC's going to do to make all of them go away?
brg444 has said "someone" is going to reduce them to utility SC's w/o the altcoin but only with the "innovation" and that will be what causes their destruction.  really?  who's going to waste their time doing this for 538 altchains?  who's going to dev a utility chain for Doge inflation?  who's going to dev a utility chain for Freicoin demurrage? who is going to dev a chain for any one of the 538 altcoins most of which have weird monetary models?  let alone mine them to make them secure? the answer is NO ONE. it's b/c it's too much work and there is no upside to doing so for a Bitcoin minded dev precisely b/c there is no altcoin! ppl are supporting these altcoins precisely b/c they have speculative upside and most of the time don't involve the sound money properties of Bitcoin.  they will continue to exist as they are and is why you're not seeing a selloff since the whitepaper.  SC's do nothing to altcoins. which removes a major argument for their adoption.

now, let' take it one step further.  if we now allow all of them to bolt themselves onto the Bitcoin MC via the 2wp with 1:1, i ask again, exactly what has changed and what is going to make all these go away?  first off, not only will they not go away but now i think they get stronger. it is fundamentally for the worse for Bitcoin.  i suggest that these altcoin devs are jumping with joy at the opportunity to get into the Bitcoin house and siphon away valuable BTC.  let's use Dogecoin as an example.

let me very clear about the mechanism and my assumptions here so brg444 won't distort them yet again.  i'm suggesting that there will be 2 separate coins riding on this new bolted on Doge, the original Dogecoin and the new scBTC created from the 2wp in a 1:1.  there will be a Doge blockchain that continues to create Doge from its own block rewards, which is inflationary as we know.  there will be tx fees generated by mining tx fees from both scBTC and Doge. in this scenario, i'm suggesting the 2wp will only more easily facilitate the movement of BTC-->scBTC-->Doge b/c of the risk free put along with the logarithmic increase in advertising claims that Doge will be able to use as we've seen with TC.  the exact opposite of what SC devs expect consider that Doge already has its own security.  it already has it's own brand.  it already has its own attraction.  it already has its own followers.  and it already has its own philosophy which happens to be different from Bitcoin.  it can advertise that philosophy with logarithmic intensity to those ordinary Bitcoiners (who only care to make a fast buck and may not care about the inflation) just like we've already seen happen with TC.  

furthermore, if successful at siphoning off BTC, Bitcoin miners might want to follow via direct mining as well as MM as they now have the revenue from Doge block rewards, and tx fees from both Doge and scBTC.  

you see, the problem with brg444 and the SC proponents is that they think everyone thinks like Bitcoiners do.  i got news for you, they don't.  that is what the whole speculative altcoin movement is about and SC's do nothing to change that.  in fact, it might make it much worse for us by letting those guys into the house next to our core engine business and sucking out valuable BTC.

I have only 1 simple question. What can we do to prevent this ? (I mean, how NOT validating  SPV proof can save us from this disaster)


altcoins are slowly being ground down by Bitcoin.  but it's taking longer than expected no doubt.  but it will happen w/o SC's.

my only pt is that i think it's disingenuous to suggest that SC's will kill altcoins when in fact they may do the opposite by allowing them to tap into BTC by the 2wp.  i know brg444 will try to say there is no reason for current Bitcoiner's to migrate into a Doge.  that may be true for Doge but there are 537 others that might have just enough attraction for current BTC holders to do so.  it's not the Sound Money Bitcoiner's i'm worried about; it's the speculators holding BTC that might migrate or even the ones who bought up around $1200 who think Bitcoin has failed them.

I'm not sure You answered my question. ("What can we do to prevent this ?")
and how NOT validating  SPV proof can save us from this disaster => ignoring them will not allowing them to tap into BTC by the 2wp
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November 10, 2014, 11:23:59 PM
 #16488

as far as altcoins and SC's are concerned, let me come at this question from another direction.  

right now, we have 538 altcoins in existence of varying kinds with diff security models.  what are SC's going to do to make all of them go away?
brg444 has said "someone" is going to reduce them to utility SC's w/o the altcoin but only with the "innovation" and that will be what causes their destruction.  really?  who's going to waste their time doing this for 538 altchains?  who's going to dev a utility chain for Doge inflation?  who's going to dev a utility chain for Freicoin demurrage? who is going to dev a chain for any one of the 538 altcoins most of which have weird monetary models?  let alone mine them to make them secure? the answer is NO ONE. it's b/c it's too much work and there is no upside to doing so for a Bitcoin minded dev precisely b/c there is no altcoin! ppl are supporting these altcoins precisely b/c they have speculative upside and most of the time don't involve the sound money properties of Bitcoin.  they will continue to exist as they are and is why you're not seeing a selloff since the whitepaper.  SC's do nothing to altcoins. which removes a major argument for their adoption.

now, let' take it one step further.  if we now allow all of them to bolt themselves onto the Bitcoin MC via the 2wp with 1:1, i ask again, exactly what has changed and what is going to make all these go away?  first off, not only will they not go away but now i think they get stronger. it is fundamentally for the worse for Bitcoin.  i suggest that these altcoin devs are jumping with joy at the opportunity to get into the Bitcoin house and siphon away valuable BTC.  let's use Dogecoin as an example.

let me very clear about the mechanism and my assumptions here so brg444 won't distort them yet again.  i'm suggesting that there will be 2 separate coins riding on this new bolted on Doge, the original Dogecoin and the new scBTC created from the 2wp in a 1:1.  there will be a Doge blockchain that continues to create Doge from its own block rewards, which is inflationary as we know.  there will be tx fees generated by mining tx fees from both scBTC and Doge. in this scenario, i'm suggesting the 2wp will only more easily facilitate the movement of BTC-->scBTC-->Doge b/c of the risk free put along with the logarithmic increase in advertising claims that Doge will be able to use as we've seen with TC.  the exact opposite of what SC devs expect consider that Doge already has its own security.  it already has it's own brand.  it already has its own attraction.  it already has its own followers.  and it already has its own philosophy which happens to be different from Bitcoin.  it can advertise that philosophy with logarithmic intensity to those ordinary Bitcoiners (who only care to make a fast buck and may not care about the inflation) just like we've already seen happen with TC.  

furthermore, if successful at siphoning off BTC, Bitcoin miners might want to follow via direct mining as well as MM as they now have the revenue from Doge block rewards, and tx fees from both Doge and scBTC.  

you see, the problem with brg444 and the SC proponents is that they think everyone thinks like Bitcoiners do.  i got news for you, they don't.  that is what the whole speculative altcoin movement is about and SC's do nothing to change that.  in fact, it might make it much worse for us by letting those guys into the house next to our core engine business and sucking out valuable BTC.

I have only 1 simple question. What can we do to prevent this ? (I mean, how NOT validating  SPV proof can save us from this disaster)


altcoins are slowly being ground down by Bitcoin.  but it's taking longer than expected no doubt.  but it will happen w/o SC's.

my only pt is that i think it's disingenuous to suggest that SC's will kill altcoins when in fact they may do the opposite by allowing them to tap into BTC by the 2wp.  i know brg444 will try to say there is no reason for current Bitcoiner's to migrate into a Doge.  that may be true for Doge but there are 537 others that might have just enough attraction for current BTC holders to do so.  it's not the Sound Money Bitcoiner's i'm worried about; it's the speculators holding BTC that might migrate or even the ones who bought up around $1200 who think Bitcoin has failed them.

I'm not sure You answered my question. ("What can we do to prevent this ?")
and how NOT validating  SPV proof can save us from this disaster => ignoring them will not allowing them to tap into BTC by the 2wp

sure, altcoins could bolt onto BTC by using a custom 2wp via a Federated server as you're fond of saying but that is much different than systematizing it via the SPV proof (changing the source code).  we've already discussed Federated servers are a centralized solution.

by making it systemic via the SPVproof you can expect all of the altcoins to bolt on immediately as it gives them opportunity they never had before.
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November 10, 2014, 11:29:38 PM
 #16489

as far as altcoins and SC's are concerned, let me come at this question from another direction.  

right now, we have 538 altcoins in existence of varying kinds with diff security models.  what are SC's going to do to make all of them go away?
brg444 has said "someone" is going to reduce them to utility SC's w/o the altcoin but only with the "innovation" and that will be what causes their destruction.  really?  who's going to waste their time doing this for 538 altchains?  who's going to dev a utility chain for Doge inflation?  who's going to dev a utility chain for Freicoin demurrage? who is going to dev a chain for any one of the 538 altcoins most of which have weird monetary models?  let alone mine them to make them secure? the answer is NO ONE. it's b/c it's too much work and there is no upside to doing so for a Bitcoin minded dev precisely b/c there is no altcoin! ppl are supporting these altcoins precisely b/c they have speculative upside and most of the time don't involve the sound money properties of Bitcoin.  they will continue to exist as they are and is why you're not seeing a selloff since the whitepaper.  SC's do nothing to altcoins. which removes a major argument for their adoption.

now, let' take it one step further.  if we now allow all of them to bolt themselves onto the Bitcoin MC via the 2wp with 1:1, i ask again, exactly what has changed and what is going to make all these go away?  first off, not only will they not go away but now i think they get stronger. it is fundamentally for the worse for Bitcoin.  i suggest that these altcoin devs are jumping with joy at the opportunity to get into the Bitcoin house and siphon away valuable BTC.  let's use Dogecoin as an example.

let me very clear about the mechanism and my assumptions here so brg444 won't distort them yet again.  i'm suggesting that there will be 2 separate coins riding on this new bolted on Doge, the original Dogecoin and the new scBTC created from the 2wp in a 1:1.  there will be a Doge blockchain that continues to create Doge from its own block rewards, which is inflationary as we know.  there will be tx fees generated by mining tx fees from both scBTC and Doge. in this scenario, i'm suggesting the 2wp will only more easily facilitate the movement of BTC-->scBTC-->Doge b/c of the risk free put along with the logarithmic increase in advertising claims that Doge will be able to use as we've seen with TC.  the exact opposite of what SC devs expect consider that Doge already has its own security.  it already has it's own brand.  it already has its own attraction.  it already has its own followers.  and it already has its own philosophy which happens to be different from Bitcoin.  it can advertise that philosophy with logarithmic intensity to those ordinary Bitcoiners (who only care to make a fast buck and may not care about the inflation) just like we've already seen happen with TC.  

furthermore, if successful at siphoning off BTC, Bitcoin miners might want to follow via direct mining as well as MM as they now have the revenue from Doge block rewards, and tx fees from both Doge and scBTC.  

you see, the problem with brg444 and the SC proponents is that they think everyone thinks like Bitcoiners do.  i got news for you, they don't.  that is what the whole speculative altcoin movement is about and SC's do nothing to change that.  in fact, it might make it much worse for us by letting those guys into the house next to our core engine business and sucking out valuable BTC.

I have only 1 simple question. What can we do to prevent this ? (I mean, how NOT validating  SPV proof can save us from this disaster)


altcoins are slowly being ground down by Bitcoin.  but it's taking longer than expected no doubt.  but it will happen w/o SC's.

my only pt is that i think it's disingenuous to suggest that SC's will kill altcoins when in fact they may do the opposite by allowing them to tap into BTC by the 2wp.  i know brg444 will try to say there is no reason for current Bitcoiner's to migrate into a Doge.  that may be true for Doge but there are 537 others that might have just enough attraction for current BTC holders to do so.  it's not the Sound Money Bitcoiner's i'm worried about; it's the speculators holding BTC that might migrate or even the ones who bought up around $1200 who think Bitcoin has failed them.

I'm not sure You answered my question. ("What can we do to prevent this ?")
and how NOT validating  SPV proof can save us from this disaster => ignoring them will not allowing them to tap into BTC by the 2wp

sure, altcoins could bolt onto BTC by using a custom 2wp via a Federated server as you're fond of saying but that is much different than systematizing it via the SPV proof (changing the source code).  we've already discussed that thats a centralized solution.

by making it systemic via the SPVproof you can expect all of the altcoins to bolt on immediately as it gives them opportunity they never had before.

Maybe Blockstream will create first SPVproof accepting  SC and we all will have years to test it. There is not a reason to hurry.
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November 10, 2014, 11:32:24 PM
 #16490

In this scheme, there will be only BTC buying with the fiat at exchanges.  No BTC is sold to the market.  Only scBTC is sold to the market but people believe the notion of the peg so they pay the same for them as they would for BTC (because after all they can be redeemed for BTC with only a 100 block delay in spend-ability).

Endgame is there are a lot of the scBTC created, reducing BTC liquidity and pumping the BTC fiat price... until it unwinds.

There is no peg.
There is no spoon.

Here is what I believe to be the flaw in your scenario :

If, as you say, people believe in the peg (which they absolutely should) then they will not buy your scBTC. In reality, the market has no incentive to purchase your scBTC over BTC if they are the same price.  

The reason for this? Well you have suggested it yourself : the "block delay in spend-ability". What makes the best money? The most cost effective and versatile exchangeable asset. BTC is more easily exchangeable with fiat (because of liquidity) and other scBTCs than scBTC is and is also more cost-effective at doing so. No matter the 1:1 fiat peg, BTC is a more desirable unit than scBTC. BTC has better fungibility and liquidity in the economy than scBTC.

Here is where you are flatly wrong.  There clearly is an incentive, the time incentive.
To change BTC to scBTC, you will have to wait for 100 blocks or so, whatever the confirmation time may be.
If you buy them at exchange, there is no wait.

This confirmation exchange value is created in both ways in the transaction.  People will pay a premium for time, localbitcoin pricing is evidence enough of this.
Maybe I'm wrong but don't the atomic swaps described in the paper remove "the time incentive"?
Am I missing something obvious?

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November 10, 2014, 11:45:41 PM
 #16491

In this scheme, there will be only BTC buying with the fiat at exchanges.  No BTC is sold to the market.  Only scBTC is sold to the market but people believe the notion of the peg so they pay the same for them as they would for BTC (because after all they can be redeemed for BTC with only a 100 block delay in spend-ability).

Endgame is there are a lot of the scBTC created, reducing BTC liquidity and pumping the BTC fiat price... until it unwinds.

There is no peg.
There is no spoon.

Here is what I believe to be the flaw in your scenario :

If, as you say, people believe in the peg (which they absolutely should) then they will not buy your scBTC. In reality, the market has no incentive to purchase your scBTC over BTC if they are the same price.  

The reason for this? Well you have suggested it yourself : the "block delay in spend-ability". What makes the best money? The most cost effective and versatile exchangeable asset. BTC is more easily exchangeable with fiat (because of liquidity) and other scBTCs than scBTC is and is also more cost-effective at doing so. No matter the 1:1 fiat peg, BTC is a more desirable unit than scBTC. BTC has better fungibility and liquidity in the economy than scBTC.

Here is where you are flatly wrong.  There clearly is an incentive, the time incentive.
To change BTC to scBTC, you will have to wait for 100 blocks or so, whatever the confirmation time may be.
If you buy them at exchange, there is no wait.

This confirmation exchange value is created in both ways in the transaction.  People will pay a premium for time, localbitcoin pricing is evidence enough of this.
Maybe I'm wrong but don't the atomic swaps described in the paper remove "the time incentive"?
Am I missing something obvious?

Atomic swaps don't involve BTC, they involve scBTC and an altcoin that also exists on the sidechain along with the scBTC.

https://www.bitcoin.org/bitcoin.pdf
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November 11, 2014, 12:23:05 AM
 #16492

In this scheme, there will be only BTC buying with the fiat at exchanges.  No BTC is sold to the market.  Only scBTC is sold to the market but people believe the notion of the peg so they pay the same for them as they would for BTC (because after all they can be redeemed for BTC with only a 100 block delay in spend-ability).

Endgame is there are a lot of the scBTC created, reducing BTC liquidity and pumping the BTC fiat price... until it unwinds.

There is no peg.
There is no spoon.

Here is what I believe to be the flaw in your scenario :

If, as you say, people believe in the peg (which they absolutely should) then they will not buy your scBTC. In reality, the market has no incentive to purchase your scBTC over BTC if they are the same price.  

The reason for this? Well you have suggested it yourself : the "block delay in spend-ability". What makes the best money? The most cost effective and versatile exchangeable asset. BTC is more easily exchangeable with fiat (because of liquidity) and other scBTCs than scBTC is and is also more cost-effective at doing so. No matter the 1:1 fiat peg, BTC is a more desirable unit than scBTC. BTC has better fungibility and liquidity in the economy than scBTC.

Here is where you are flatly wrong.  There clearly is an incentive, the time incentive.
To change BTC to scBTC, you will have to wait for 100 blocks or so, whatever the confirmation time may be.
If you buy them at exchange, there is no wait.

This confirmation exchange value is created in both ways in the transaction.  People will pay a premium for time, localbitcoin pricing is evidence enough of this.
Maybe I'm wrong but don't the atomic swaps described in the paper remove "the time incentive"?
Am I missing something obvious?

Atomic swaps don't remove it, but they are a different sort of exchange entirely.  They are a sort of middle ground, in between in terms of time and autonomy.  
They are p2p and negotiated (rather than something I can do on my own via exchange or SPV)
They also have a time requirement, just not as long.  
They could be somewhat automated with a hosted order book, so they may end up being closer to the exchange model, which would give them a bit of a premium over the SPV method.
The SPV folks (presumably the slowest of these three, each are more or less unused) pay in time and save in money.

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November 11, 2014, 12:37:05 AM
 #16493

...
Agree that having names for each of the varieties would make it easier to discuss.
I'm not fond of using the term "pegged sidechain" but that is what the Blockstream folks call them now.
I don't think a "peg" is a good thing.  Currency pegs have horrible implications, almost always fail, and I think calling them this brings them down, but I didn't choose the name.

If it was mine to name, I might have gone with "coin wrappers" or something without all the bad historical connotations.

I'd suggest 'lock' instead of 'peg'.  'Peg' brings up images of a cribbage board where pegs are moved around as needed, and that is also the failure mode of many currency peg schemes (I imagine.)

'Lock' is more indicative of what is happening here.  BTC are locked with high security to back a sidechain extension.  As always, the security is a function of the quality of the implementation of course, but it's pretty clear to me that quality in implementation will bubble to the top (very much unlike the opaque world of off-chain extensions that we have seen to date.)



They are correctly "freeze-locked" coins

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November 11, 2014, 12:40:46 AM
 #16494

...
Agree that having names for each of the varieties would make it easier to discuss.
I'm not fond of using the term "pegged sidechain" but that is what the Blockstream folks call them now.
I don't think a "peg" is a good thing.  Currency pegs have horrible implications, almost always fail, and I think calling them this brings them down, but I didn't choose the name.

If it was mine to name, I might have gone with "coin wrappers" or something without all the bad historical connotations.

I'd suggest 'lock' instead of 'peg'.  'Peg' brings up images of a cribbage board where pegs are moved around as needed, and that is also the failure mode of many currency peg schemes (I imagine.)

'Lock' is more indicative of what is happening here.  BTC are locked with high security to back a sidechain extension.  As always, the security is a function of the quality of the implementation of course, but it's pretty clear to me that quality in implementation will bubble to the top (very much unlike the opaque world of off-chain extensions that we have seen to date.)



They are correctly "freeze-locked" coins

i like "locked" too but the 2wp is effectively a "pass thru".
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November 11, 2014, 12:41:18 AM
 #16495

They are correctly "freeze-locked" coins
Give us some more words on this please?

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November 11, 2014, 12:55:43 AM
 #16496

They are correctly "freeze-locked" coins
Give us some more words on this please?

Virtual bitcoins, as opposed to real bitcoins....

(edit: no, i don't think it will reduce the level of confusion).
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November 11, 2014, 01:06:55 AM
 #16497

as far as altcoins and SC's are concerned, let me come at this question from another direction.  

right now, we have 538 altcoins in existence of varying kinds with diff security models.  what are SC's going to do to make all of them go away?
brg444 has said "someone" is going to reduce them to utility SC's w/o the altcoin but only with the "innovation" and that will be what causes their destruction.  really?  who's going to waste their time doing this for 538 altchains?  who's going to dev a utility chain for Doge inflation?  who's going to dev a utility chain for Freicoin demurrage? who is going to dev a chain for any one of the 538 altcoins most of which have weird monetary models?  let alone mine them to make them secure? the answer is NO ONE. it's b/c it's too much work and there is no upside to doing so for a Bitcoin minded dev precisely b/c there is no altcoin! ppl are supporting these altcoins precisely b/c they have speculative upside and most of the time don't involve the sound money properties of Bitcoin.  they will continue to exist as they are and is why you're not seeing a selloff since the whitepaper.  SC's do nothing to altcoins. which removes a major argument for their adoption.

now, let' take it one step further.  if we now allow all of them to bolt themselves onto the Bitcoin MC via the 2wp with 1:1, i ask again, exactly what has changed and what is going to make all these go away?  first off, not only will they not go away but now i think they get stronger. it is fundamentally for the worse for Bitcoin.  i suggest that these altcoin devs are jumping with joy at the opportunity to get into the Bitcoin house and siphon away valuable BTC.  let's use Dogecoin as an example.

let me very clear about the mechanism and my assumptions here so brg444 won't distort them yet again.  i'm suggesting that there will be 2 separate coins riding on this new bolted on Doge, the original Dogecoin and the new scBTC created from the 2wp in a 1:1.  there will be a Doge blockchain that continues to create Doge from its own block rewards, which is inflationary as we know.  there will be tx fees generated by mining tx fees from both scBTC and Doge. in this scenario, i'm suggesting the 2wp will only more easily facilitate the movement of BTC-->scBTC-->Doge b/c of the risk free put along with the logarithmic increase in advertising claims that Doge will be able to use as we've seen with TC.  the exact opposite of what SC devs expect consider that Doge already has its own security.  it already has it's own brand.  it already has its own attraction.  it already has its own followers.  and it already has its own philosophy which happens to be different from Bitcoin.  it can advertise that philosophy with logarithmic intensity to those ordinary Bitcoiners (who only care to make a fast buck and may not care about the inflation) just like we've already seen happen with TC.  

furthermore, if successful at siphoning off BTC, Bitcoin miners might want to follow via direct mining as well as MM as they now have the revenue from Doge block rewards, and tx fees from both Doge and scBTC.  

you see, the problem with brg444 and the SC proponents is that they think everyone thinks like Bitcoiners do.  i got news for you, they don't.  that is what the whole speculative altcoin movement is about and SC's do nothing to change that.  in fact, it might make it much worse for us by letting those guys into the house next to our core engine business and sucking out valuable BTC.

I have only 1 simple question. What can we do to prevent this ? (I mean, how NOT validating  SPV proof can save us from this disaster)


you've stated before we may already have SideChains with 1:1 2wp's. If they exist the way they do it is by using Multisig and distributing N of M signatures in a secure decentralized and obfuscated way even if they use Merger Mining, this approach is risk free to Bitcoins future and the correct approach in my opinion. The disadvantage is you have to go through a centralized clearing house, or trusted decentralized servers, this could be done something much like Bitshare's Delegates or secure OT servers. (the risk of loosing your BTC where the code is honest and open is equally eliminated but the market determines of the value of the SideChain not the BTC Peg.  it may always be 1:1 but if it is not its not an issue, it is a market failure if it unwinds not a Bitcoin protocol failure.) 

The above solutions give us decentralized exchanges, even corporate currencies, and secure user protected and untouchable BTC storage on nefarious sites like SR, the advantage are huge, and the risk to the user losing there BTC is reduced, to the actual fraud in the business interaction, (same as with SC) which will be mitigated over time with social reputation of honest players.

Its only when there is a decentralized protocol solution that allows bitcoin value to move onto other chains that I see the issues that have been presented arising.

What can we do to prevent this? seems simple to me, don't make the proposed Blockstream protocol change, lets use free market solutions. 

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November 11, 2014, 01:40:18 AM
 #16498

as far as altcoins and SC's are concerned, let me come at this question from another direction.  

right now, we have 538 altcoins in existence of varying kinds with diff security models.  what are SC's going to do to make all of them go away?
brg444 has said "someone" is going to reduce them to utility SC's w/o the altcoin but only with the "innovation" and that will be what causes their destruction.  really?  who's going to waste their time doing this for 538 altchains?  who's going to dev a utility chain for Doge inflation?  who's going to dev a utility chain for Freicoin demurrage? who is going to dev a chain for any one of the 538 altcoins most of which have weird monetary models?  let alone mine them to make them secure? the answer is NO ONE. it's b/c it's too much work and there is no upside to doing so for a Bitcoin minded dev precisely b/c there is no altcoin! Bitcoiners won't use them as well. ppl are supporting these altcoins precisely b/c they have speculative upside and most of the time don't involve the sound money properties of Bitcoin.  they will continue to exist as they are and is why you're not seeing a selloff since the whitepaper.  SC's do nothing to altcoins. which removes a major argument for SC adoption.

now, let' take it one step further.  if we now allow all of them to bolt themselves onto the Bitcoin MC via the 2wp with 1:1, i ask again, exactly what has changed and what is going to make all these go away?  first off, not only will they not go away but now i think they get stronger. it is fundamentally worse for Bitcoin.  i suggest that these altcoin devs are jumping with joy at the opportunity to get into the Bitcoin house and siphon away valuable BTC.  let's use Dogecoin as an example.

let me very clear about the scenario/mechanism and my assumptions here so brg444 won't distort them yet again.  i'm suggesting that there will be 2 separate coins riding on this new bolted on Doge SC, the original Dogecoin and the new scBTC created from the 2wp in a 1:1.  there will be a Doge blockchain that continues to create Doge from its own block rewards, which is inflationary as we know.  there will be tx fees generated by mining tx fees from both scBTC and Dogecoin. in this scenario, i'm suggesting the 2wp will only more easily facilitate the movement of BTC<-->scBTC<-->Doge b/c of the risk free put along with the logarithmic increase in advertising claims that Doge will be able to use as we've seen with Truthcoin (TC).  the exact opposite of what SC devs expect.  i am NOT saying that Doge will be able to convert directly to BTC via the 2wp. it will only be exchangeable for scBTC.  consider that Doge already has its own security.  it already has it's own brand.  it already has its own attraction.  it already has its own followers.  and it already has its own philosophy which happens to be different from Bitcoin.  it can advertise that philosophy with logarithmic intensity to those ordinary Bitcoiners (who only care to make a fast buck and may not care about the inflation) just like we've already seen happen with TC.  

furthermore, if successful at siphoning off BTC, Bitcoin miners might want to follow defecting users via direct mining as well as MM as they now have the revenue from Dogecoin block rewards, and tx fees from both Dogecoin and scBTC.  

you see, the problem with brg444 and the SC proponents is that they think everyone thinks like Bitcoiners do.  i got news for you, they don't.  that is what the whole speculative altcoin movement is about and SC's do nothing to change that.  in fact, it might make it much worse for us by letting those altcoins into the house next to our core engine business (MC) and sucking out valuable BTC.

I had a lengthy post written about how this was such a stupid, stupid post but I can see you're just never gonna get it.

Enjoy your moment of shine, for now. Celebrate your ignorance

"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 11, 2014, 02:24:53 AM
 #16499

They are correctly "freeze-locked" coins
Give us some more words on this please?

The TX that 'locks' the main chain coins is cryptographically much harder than a regular lock. It requires a 100 block confirmation depth (as for coinbase TX) for validity, and equally to reverse. Rightly, it is being called a "freeze" on those coins. Those coins are frozen on the main chain in such a way to cryptographically prove they cannot be moved, except within very specific conditions. The only way to move those coins, outside of the specific side-chain conditions, takes the same amount of hashpower as to change a coinbase TX. I.e. it is not merely a lock on those coins but a freeze-lock.

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November 11, 2014, 02:27:20 AM
 #16500

They are correctly "freeze-locked" coins
Give us some more words on this please?

The TX that 'locks' the main chain coins is cryptographically much harder than a regular lock. It requires a 100 block confirmation depth (as for coinbase TX) for validity, and equally to reverse. Rightly, it is being called a "freeze" on those coins. Those coins are frozen on the main chain in such a way to cryptographically prove they cannot be moved, except within very specific conditions. The only way to move those coins, outside of the specific side-chain conditions, takes the same amount of hashpower as to change a coinbase TX. I.e. it is not merely a lock on those coins but a freeze-lock.

You should start a side-chains thread. It's interesting as hell

Forgive my petulance and oft-times, I fear, ill-founded criticisms, and forgive me that I have, by this time, made your eyes and head ache with my long letter. But I cannot forgo hastily the pleasure and pride of thus conversing with you.
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