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Author Topic: Gold collapsing. Bitcoin UP.  (Read 2011304 times)
thezerg
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November 14, 2014, 12:19:42 PM
 #16761

Dont u get VISA position?   If is separable who runs the servers secure the chain?  VISA of course.  And they'll charge 2 to 5 pct per txn for the service.  TBH a blockchain backend would be a lot better than a sql db to store financial txns... so it is not all bad.
Financial transaction DBs aren't typically SQL and are more often journaling DBs like the block chain already, but without PoW as they trust their systems.

 Huh You can have journaling with SQL I think.  But the point is not so much the POW but the key signing required to change an account balance.   With journaling you can use the journal to trace the fraud provided you notice it.  With blockchain you stop it from happening in the first place.
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November 14, 2014, 02:36:05 PM
 #16762

Dont u get VISA position?   If is separable who runs the servers secure the chain?  VISA of course.  And they'll charge 2 to 5 pct per txn for the service.  TBH a blockchain backend would be a lot better than a sql db to store financial txns... so it is not all bad.
Financial transaction DBs aren't typically SQL and are more often journaling DBs like the block chain already, but without PoW as they trust their systems.

 Huh You can have journaling with SQL I think.  But the point is not so much the POW but the key signing required to change an account balance.   With journaling you can use the journal to trace the fraud provided you notice it.  With blockchain you stop it from happening in the first place.

Consider whether the banks make more money by not forcing themselves to be honest?

This isn't a problem they are looking to fix.  That we are proving that it can be fixed, and have done so, has not gone without notice.
You should understand the reason behind all this weird and often useless regulation efforts.

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November 14, 2014, 04:14:07 PM
 #16763

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.
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November 14, 2014, 04:29:33 PM
 #16764

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.


If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?
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November 14, 2014, 04:32:07 PM
 #16765

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

I don't see this assumption.  The assumption is that the ledger can be extended.  BTC are locked, creating an entry on a subledger.  Only by proving the validity of the subledger can the BTC be unlocked.  I don't see how this breaks Bitcoin as money.

Quote
Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

Centralized entities have no need for a SPV proof, the federated model using m-of-n bitcoin addresses will work just fine for them.  BTW, this is still a SC under the definitions given in the paper, and it can be done today.

Quote
there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

The only way "all the bitcoin" will move to a sidechain is if the sidechain is obviously better than BTC.  If that's the case, why not upgrade?  Your BTC will be convertible.  I see no losers here.

If "all the bitcoin" move to many sidechains, BTC is still needed as the backbone to move between the different sidechains.  That's where the fees will come in, and maintaining a limited block size will ensure they are high enough.

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Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

I don't think you understand their business model very well.  The have an obligation to profit, yes.  But their business is developing new capabilities by extending the Bitcoin platform.  In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable.  A dairy farmer doesn't eat his cattle.

https://www.bitcoin.org/bitcoin.pdf
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November 14, 2014, 04:38:54 PM
 #16766

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.


If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles.  these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors.  these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges.  their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess.  but those assets will not be the Bitcoin Money as we know it.  they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.
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November 14, 2014, 04:41:11 PM
 #16767

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.


If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles.  these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors.  these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges.  their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess.  but those assets will not be the Bitcoin Money as we know it.  they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

Won't the free market take those things into account making scBtc less valuable and higher risk? And those who stayed in btc have their value rise?
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November 14, 2014, 04:42:50 PM
 #16768

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.


If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles.  these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors.  these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges.  their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess.  but those assets will not be the Bitcoin Money as we know it.  they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

Again, SPV proofs are only needed for decentralized sidechains.  These will be mined by independent, distributed, third party mining auditors.

https://www.bitcoin.org/bitcoin.pdf
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November 14, 2014, 04:44:13 PM
 #16769

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.


If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles.  these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors.  these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges.  their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess.  but those assets will not be the Bitcoin Money as we know it.  they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

Won't the free market take those things into account making scBtc less valuable and higher risk? And those who stayed in btc have their value rise?

Cypher only believes in the free market when it helps make his case.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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November 14, 2014, 04:53:19 PM
 #16770

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.


If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles.  these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors.  these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges.  their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess.  but those assets will not be the Bitcoin Money as we know it.  they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.
You are talking of a case where : market cap of [BTC pre Sidechain release] = market cap of [BTC chain + SC]
Then indeed value will flow from a secure chain to a less secure chain which will undermine the whole system.

But the purpose of SC is to create value, so we can expect that:
Market cap of [BTC chain + SC] > market cap of [BTC pre Sidechain release]
Where the delta of the total value doesn't come from a zero sum game between BTC and SC, but from a positive sum game where value is added because of new SC's features.
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November 14, 2014, 04:55:45 PM
 #16771

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

I don't see this assumption.  The assumption is that the ledger can be extended.  BTC are locked, creating an entry on a subledger.  Only by proving the validity of the subledger can the BTC be unlocked.  I don't see how this breaks Bitcoin as money.

SC's only work in theory if they can be confined to "utility" chains as brg444 has defined them, ie, SC's w/o an altcoin that just processes tx's with enhanced features like fast tx or anon.  but since these utility chains won't make money for their devs, and IF no other speculative SC's will be formed, then you don't need a Blockstream for profit would you? 

Quote
Quote
Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

Centralized entities have no need for a SPV proof, the federated model using m-of-n bitcoin addresses will work just fine for them.  BTW, this is still a SC under the definitions given in the paper, and it can be done today.

i'm perfectly aware of that.  but centralized entities encourage usage of the SPVproof, as brg444 and the whitepaper have already suggested, as they are more secure (MM) and they are decentralized.  we've already seen this incentive live with the Truthcoin example.
Quote
Quote
there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

The only way "all the bitcoin" will move to a sidechain is if the sidechain is obviously better than BTC.  If that's the case, why not upgrade?  Your BTC will be convertible.  I see no losers here.

converting is highly risky.  especially to those who don't pay attention to Bitcointalk or Reddit on a regular basis.  this was the exact reason the proposal to harvest "supposedly" inactive address balances has been shot down many times.  it's risky and unnecessary to force a widespread migration to an improved SC.
Quote
Quote
If "all the bitcoin" move to many sidechains, BTC is still needed as the backbone to move between the different sidechains.  That's where the fees will come in, and maintaining a limited block size will ensure they are high enough.

no, we've already learned that scBTC can move btwn other SC's.  they don't "ever" have to come back to MC.
Quote
Quote
Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

I don't think you understand their business model very well.  The have an obligation to profit, yes.  But their business is developing new capabilities by extending the Bitcoin platform.  In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable.  A dairy farmer doesn't eat his cattle.

i understand it completely.  it's conflicted and it may not even be intentional.

think about it.  it's only realistic that utility chains can be MM'd.  that's b/c the data requirement and work involved would be too much to MM ALL SC's in existence which will be in the thousand/billions.  therefore, MM will be confined to perhaps 2 utility chains that make Bitcoin better as money, fast tx and anon debatedly.

all other speculative SC ledgers will be maintained by their owners.   owners who have paid Blockstream good money (USD's) to construct their SC. they will be less secure as they won't be mined by third party independent mining auditors ala Bitcoin miners.  the only way for these types of SC entities survive is by attracting BTC to their scBTC.  the more the better.  the more retention the better.  this take tx fees away from Bitcoin miners which is bad.  the Blockstream biz model depends on this siphoning of BTC -->scBTC for the survival of their clients.  otherwise they don't make money.
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November 14, 2014, 05:02:54 PM
 #16772

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.


If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles.  these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors.  these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges.  their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess.  but those assets will not be the Bitcoin Money as we know it.  they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

Again, SPV proofs are only needed for decentralized sidechains.  These will be mined by independent, distributed, third party mining auditors.

who will mine these decentralized SC's?  seriously.  Bitcoin miners are only incentivized to mine for BTC as money.  we've already agreed they will only mine those utility chains that enhance that function of money, not speculative SC's who take advantage of the SPV proof to advertise themselves as "decentralized or more secure". 
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November 14, 2014, 05:05:08 PM
 #16773

Cypher only believes in the free market when it helps make his case.

what free, and i'll add fair, market allows a for profit bunch of insiders to go in and change the rules of the game (yes, the protocol) to facilitate their own business model?  are you that dense?
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November 14, 2014, 05:10:48 PM
 #16774

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.


If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles.  these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors.  these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges.  their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess.  but those assets will not be the Bitcoin Money as we know it.  they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.
You are talking of a case where : market cap of [BTC pre Sidechain release] = market cap of [BTC chain + SC]
Then indeed value will flow from a secure chain to a less secure chain which will undermine the whole system.

But the purpose of SC is to create value, so we can expect that:
Market cap of [BTC chain + SC] > market cap of [BTC pre Sidechain release]
Where the delta of the total value doesn't come from a zero sum game between BTC and SC, but from a positive sum game where value is added because of new SC's features.

the question is, create value for who?  and at what cost? 

if the "stated" intentions of Blockstream is to create value for Bitcoin and not Blockstream, then they should restructure as a non-profit.  or create SC's as a public service.  b/c that's the other important point here:  imo, Bitcoin has evolved to a point where it has become a public good.  it is a form of Sound Money that cannot, in the slightest, be perceived to have any improprieties or self interested groups in control.  that is, if we want nations and ppl of all strata to buy in.   Blockstream for profit violates this.
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November 14, 2014, 05:13:01 PM
 #16775

I don't think you understand their business model very well.  The have an obligation to profit, yes.  But their business is developing new capabilities by extending the Bitcoin platform.  In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable.  A dairy farmer doesn't eat his cattle.

damn formatting:

i understand it completely.  it's conflicted and it may not even be intentional.

think about it.  it's  realistic that only utility chains can be MM'd.  that's b/c the data requirement and work involved would be too much to MM ALL SC's in existence which will be in the thousand/billions.  therefore, MM will be confined to perhaps 2 utility chains that make Bitcoin better as money, fast tx and anon debatedly.

all other speculative SC ledgers will be maintained by their owners.   owners who have paid Blockstream good money (USD's) to construct their SC. they will be less secure as they won't be mined by third party independent mining auditors ala Bitcoin miners and therefore you have to "trust" them.  the only way for these types of SC entities survive is by attracting BTC to their scBTC.  the more the better.  the more retention the better.  this take tx fees away from Bitcoin miners which is bad.  the Blockstream biz model depends on this siphoning of BTC -->scBTC for the survival of their clients.  otherwise they don't make money.
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November 14, 2014, 05:16:37 PM
 #16776

I don't think you understand their business model very well.  The have an obligation to profit, yes.  But their business is developing new capabilities by extending the Bitcoin platform.  In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable.  A dairy farmer doesn't eat his cattle.

damn formatting:

i understand it completely.  it's conflicted and it may not even be intentional.

think about it.  it's  realistic that only utility chains can be MM'd.  that's b/c the data requirement and work involved would be too much to MM ALL SC's in existence which will be in the thousand/billions.  therefore, MM will be confined to perhaps 2 utility chains that make Bitcoin better as money, fast tx and anon debatedly.

all other speculative SC ledgers will be maintained by their owners.   owners who have paid Blockstream good money (USD's) to construct their SC. they will be less secure as they won't be mined by third party independent mining auditors ala Bitcoin miners and therefore you have to "trust" them.  the only way for these types of SC entities survive is by attracting BTC to their scBTC.  the more the better.  the more retention the better.  this take tx fees away from Bitcoin miners which is bad.  the Blockstream biz model depends on this siphoning of BTC -->scBTC for the survival of their clients.  otherwise they don't make money.

Then who in their right mind would ever send their btc to these chains?
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November 14, 2014, 05:23:20 PM
 #16777

I don't think you understand their business model very well.  The have an obligation to profit, yes.  But their business is developing new capabilities by extending the Bitcoin platform.  In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable.  A dairy farmer doesn't eat his cattle.

damn formatting:

i understand it completely.  it's conflicted and it may not even be intentional.

think about it.  it's  realistic that only utility chains can be MM'd.  that's b/c the data requirement and work involved would be too much to MM ALL SC's in existence which will be in the thousand/billions.  therefore, MM will be confined to perhaps 2 utility chains that make Bitcoin better as money, fast tx and anon debatedly.

all other speculative SC ledgers will be maintained by their owners.   owners who have paid Blockstream good money (USD's) to construct their SC. they will be less secure as they won't be mined by third party independent mining auditors ala Bitcoin miners and therefore you have to "trust" them.  the only way for these types of SC entities survive is by attracting BTC to their scBTC.  the more the better.  the more retention the better.  this take tx fees away from Bitcoin miners which is bad.  the Blockstream biz model depends on this siphoning of BTC -->scBTC for the survival of their clients.  otherwise they don't make money.

Then who in their right mind would ever send their btc to these chains?

we don't know.  but we do know that it will have to be Blockstreams mandate to make it so.  otherwise, they don't make money constructing SC's.
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November 14, 2014, 05:23:53 PM
 #16778

Bitcoin is money - I am with cypher on this one.

Speaking of currencies, this good article suggests the yen is the first to go, of the big currencies. I see no flaws in this article:

http://davidstockmanscontracorner.com/bojs-yen-trashing-will-ignite-a-tital-wave-of-asian-devaluation-and-deflation/

I haven't even clicked the link and I see a flaw in the title, or should I say 'tital'.

If you liked this post -> 1KRYhandiYsjecZw7mtdLnoeuKUYoGRkH4
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November 14, 2014, 05:31:35 PM
 #16779

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles.  these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors.  these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges.  their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess.  but those assets will not be the Bitcoin Money as we know it.  they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

mostly all of your arguments are shown to be irrelevant if we consider that sidechains can be implemented today without the SPV proof.

bitcoins being converted to represent assets is not a new proposition and something that will exist sidechain or not.

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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November 14, 2014, 05:31:50 PM
 #16780

btw, since everyone around here seems to not mind for-profits changing the source code to their own advantage, why don't we increase OP_return back up to 80 bytes, from 40 bytes, so that Counterparty can fit back in their tx proofs for their share issuance that they were so badly depending on, so as to further their profit model? Roll Eyes
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