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Question: Will you support Gavin's new block size limit hard fork of 8MB by January 1, 2016 then doubling every 2 years?
1.  yes
2.  no

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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1981934 times)
cypherdoc
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November 15, 2014, 07:10:06 PM
 #16961

This is a popular thread in that it's always at the top. I've been fascinated by Bitcoin for for over a year, and have decided to join bitcointalk.org to get more involved.
I see Side Chains as more interesting than gold and would really appreciate a summary of the pros and cons they have for Bitcoin.

Why is this even a debated topic?

Probably because some people became invested (financially and/or emotionally) in various strategies which were predicated on certain expectations of how Bitcoin would overcome it's rather obvious weaknesses and did not anticipate sidechains as being one of them.

In this respect sidechains are every bit as much of a 'disruptive technology' to Bitcoin as Bitcoin is to the mainstream debt-based monetary system.  Naturally some people will lose, but they won't be going down without a fight.


I'm glad to see that we agree for once. It IS disruptive. And it will cause massive volatility whereby we all may lose as you obviously can't comprehend in your eagerness to criticize me out of spite. I'd  love to see your face if and when you lose all your Sound Money BTC value to speculative SC's.  
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brg444
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November 15, 2014, 07:10:23 PM
 #16962

This is how pitiful this guy is. Either he's lying or he's dirt poor with a nefarious agenda:

What is YOUR agenda?

I'm not sure you have noticed but you are the one who seems really desperate here.

What is your basis for saying I'm lying? Or dirt poor?

You need a SS from one of my trezors?

"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 15, 2014, 07:26:47 PM
 #16963

If you have big enough user base then even 100% hash power attack cannot spend this BTC b/c it is not valid transaction.

1. you can ignore OP_SIDECHAINPROOFVERIFY
2. if some miner will add transaction what will spent BTC from address using OP_SIDECHAINPROOFVERIFY  into block  without valid "SideChain proof"  then this block will be ignored b/c it will contain invalid tx.

Yes, in order for the SPV locking/unlocking mechanism to be secure, strong support for sidechains across the bitcoin community is required.  

I brought up the fact that implementing SPV proofs in bitcoin still requires broad support because there's been confusion caused by the word "soft" in "soft fork."  For some reason many people seem to think that soft-forking changes can "just be done" and that because the fork is "soft" it's like a little furry and unthreatening bunny.  I think this is disingenuous, as soft-forks still require broad support and a lot of bad stuff could be implemented with them (e.g., blacklisting).  

At the risk of taking maaku's comment out of context:

Quote from: Mark Friedenbach (23 October 2014 Reddit "Sidechain" AMA)
It is possible for multiple sidechains to exist, each with larger block sizes and/or shorter block times, and only the transfers between these high-speed payment networks need to hit the bitcoin blockchain. This would allow bitcoin the currency to scale as required without requiring significant block size increases.

While this is true, it seems to imply that achieving scalability via sidechains is superior (easier and safer) than some version of Gavin's scalability proposal.  One of my concerns with the sidechain proposal is that it might seem like an "alternative" to moving forward with the max-block-size hard fork.  I think we should be looking at both proposals as orthogonal (and we should move forward with a hard fork to address scalability, regardless).

I would also argue that adding OP_SIDECHAINPROOFVERIFY poses a larger existential risk to bitcoin than a hard-fork to increase the max block size.  The reason I think this is that OP_SIDECHAINPROOFVERIFY fundamentally changes bitcoin, whereas increasing the max block size has always been on our road map.  Will support for SPV sidechains set a precedent that adding "features" to bitcoin is OK if it can be done with a soft fork?  Remember, "features" like blacklisting and other nasty stuff can be implemented as a soft fork too.  

I'm trying to make two points: (1) soft forks pose no less an existential threat to bitcoin than hard forks (although they pose less technical risk), and (2) soft forks still require consensus, it's just that that consensus is probably easier to obtain since it only requires support from the majority of network hash power.  

I'll conclude by saying that I think sidechains are exciting, I hope to see federated sidechains become a thing, and I'm "undecided" on SPV sidechains that require a change to bitcoin (let's see what happens with federated sidechains first Smiley).  I support moving forward with a hard fork to address scalability now.

Run Bitcoin Unlimited (www.bitcoinunlimited.info)
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November 15, 2014, 07:28:27 PM
 #16964

This is a popular thread in that it's always at the top. I've been fascinated by Bitcoin for for over a year, and have decided to join bitcointalk.org to get more involved.
I see Side Chains as more interesting than gold and would really appreciate a summary of the pros and cons they have for Bitcoin.

Why is this even a debated topic?

Probably because some people became invested (financially and/or emotionally) in various strategies which were predicated on certain expectations of how Bitcoin would overcome it's rather obvious weaknesses and did not anticipate sidechains as being one of them.

In this respect sidechains are every bit as much of a 'disruptive technology' to Bitcoin as Bitcoin is to the mainstream debt-based monetary system.  Naturally some people will lose, but they won't be going down without a fight.


Thanks for your reply. I'm not convinced Bitcoin is all that disruptive, the problem I see in fiat, is governments are creating more than relative GDP. To that existent Bitcoin can be a store of value to offset the overprinting.

So I'm not seeing the potential disruption to Bitcoin. As a small holder of Bitcoin having survived one bear market, how do Side Chains disrupt Bitcoin and what does this mean for it's function as a store of value?
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November 15, 2014, 07:32:07 PM
 #16965

This is a popular thread in that it's always at the top. I've been fascinated by Bitcoin for for over a year, and have decided to join bitcointalk.org to get more involved.
I see Side Chains as more interesting than gold and would really appreciate a summary of the pros and cons they have for Bitcoin.

Why is this even a debated topic?

Probably because some people became invested (financially and/or emotionally) in various strategies which were predicated on certain expectations of how Bitcoin would overcome it's rather obvious weaknesses and did not anticipate sidechains as being one of them.

In this respect sidechains are every bit as much of a 'disruptive technology' to Bitcoin as Bitcoin is to the mainstream debt-based monetary system.  Naturally some people will lose, but they won't be going down without a fight.


Thanks for your reply. I'm not convinced Bitcoin is all that disruptive, the problem I see in fiat, is governments are creating more than relative GDP. To that existent Bitcoin can be a store of value to offset the overprinting.

So I'm not seeing the potential disruption to Bitcoin. As a small holder of Bitcoin having survived one bear market, how do Side Chains disrupt Bitcoin and what does this mean for it's function as a store of value?

If you don't see the disruption in Bitcoin I would suggest you concentrate on this before engaging sidechains.

Here is an excellent post from Peter R here about the importance of money as a ledger and why Bitcoin is the best ledger technology available to us :

https://bitcointalk.org/index.php?topic=68655.msg9247581#msg9247581

"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 15, 2014, 07:37:56 PM
 #16966

Probably because some people became invested (financially and/or emotionally) in various strategies which were predicated on certain expectations of how Bitcoin would overcome it's rather obvious weaknesses and did not anticipate sidechains as being one of them.

In this respect sidechains are every bit as much of a 'disruptive technology' to Bitcoin as Bitcoin is to the mainstream debt-based monetary system.  Naturally some people will lose, but they won't be going down without a fight.

I'm glad to see that we agree for once. It IS disruptive. And it will cause massive volatility whereby we all may lose as you obviously can't comprehend in your eagerness to criticize me out of spite. I'd  love to see your face if and when you lose all your Sound Money BTC value to speculative SC's.  

Bitcoin already has massive volatility in case you didn't notice (which is possible considering the number of 'Bitcoin up' posts you have made in 2014.)  By the laws of nature we cannot all lose.  Sidechains will, if anything, tend to act as a buffer to this volatility just as they will act as a buffer to coding accidents, legislative hassles, etc, etc.

I'd love to see the look on your face as you find yourself sitting on a pile of useless CorpGovCoins (formerly Bitcoin) when it turns out that they are as interesting to people as PayPal-II and some other solution has taken the place that Bitcoin could have occupied as a trusted and autonomous value foundation.


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November 15, 2014, 07:56:32 PM
 #16967

If you have big enough user base then even 100% hash power attack cannot spend this BTC b/c it is not valid transaction.

1. you can ignore OP_SIDECHAINPROOFVERIFY
2. if some miner will add transaction what will spent BTC from address using OP_SIDECHAINPROOFVERIFY  into block  without valid "SideChain proof"  then this block will be ignored b/c it will contain invalid tx.

You are correct.  In order for the SPV locking/unlocking mechanism to be secure, strong support for sidechains across the bitcoin community is required.  

I brought up the fact that implementing SPV proofs in bitcoin still requires broad support because there's been confusion caused by the word "soft" in "soft fork."  For some reason many people seem to think that soft-forking changes can "just be done" and that because the fork is "soft" it's like a little furry and unthreatening bunny.  I think this is disingenuous, as soft-forks still require broad support and a lot of bad stuff could be implemented with them (e.g., blacklisting).  

At the risk of taking maaku's comment out of context:

Quote from: Mark Friedenbach (23 October 2014 Reddit "Sidechain" AMA)
It is possible for multiple sidechains to exist, each with larger block sizes and/or shorter block times, and only the transfers between these high-speed payment networks need to hit the bitcoin blockchain. This would allow bitcoin the currency to scale as required without requiring significant block size increases.

While this is true, it seems to imply that achieving scalability via sidechains is superior (easier and safer) than some version of Gavin's scalability proposal.  One of my concerns with the sidechain proposal is that it might seem like an "alternative" to moving forward with the max-block-size hard fork.  I think we should be looking at both proposals as orthogonal (and we should move forward with a hard fork to address scalability, regardless).

I would also argue that adding OP_SIDECHAINPROOFVERIFY poses a larger existential risk to bitcoin than a hard-fork to increase the max block size.  The reason I think this is that OP_SIDECHAINPROOFVERIFY fundamentally changes bitcoin, whereas increasing the max block size has always been on our road map.  Will support for SPV sidechains set a precedent that adding "features" to bitcoin is OK if it can be done with a soft fork?  Remember, "features" like blacklisting and other nasty stuff can be implemented as a soft fork too.  

I'm trying to make two points: (1) soft forks pose no less an existential threat to bitcoin than hard forks (although they pose less technical risk), and (2) soft forks still require consensus, it's just that that consensus is probably easier to obtain since it only requires support from the majority of network hash power.  

I'll conclude by saying that I think sidechains are exciting, I hope to see federated sidechains become a thing, and I'm "undecided" on SPV sidechains that require a change to bitcoin (let's see what happens with federated sidechains first Smiley).  I support moving forward with a hard fork to address scalability now.


I agree with both these points.
I am not a fan of Gavin's current Max Blocksize proposal.  It solves only half the problem and ignores the other half (or maybe 2/3 as I get to below).  His reasoning is that since it is a limit the other half is unnecessary, he is flatly and demonstrably wrong about this.  When more people are aware of the issue, I think he will modify his proposal again to accommodate the other half of the problem.

Adding an insensitive exponential growth resolves the "it can be as much as this" issue, but it does not protect the block chain from abuse attempting to knock out the smaller players and Southern Hemisphere nodes, so his proposal misses the "it can be as low as this" half of the limit.  So I think he will modify it to have a Max Blocksize which is based on a multiple of current historical blocksize and adjusts accordingly, but is further limited by the exponential limit.  

The extra 1/3 that we get for free by lookin at both sides of the problem (too high/too low) is that when he does modify his proposal again (and I think he will have to do so), it will also resolve the issue of "how long until we have to look at this issue again" as well, because when the high limit and the low limit converge, that is the indication that we will have to look at it again.

If he just goes with his current proposal, it is pretty much a computer-science failure, though it is a practical patch.  It is mere engineering and not science.  It measures nothing and is just yet another inflexible mechanism that takes no advantage of the power of the block chain as a tool that will persist into the future.


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November 15, 2014, 07:57:18 PM
 #16968

This is a popular thread in that it's always at the top. I've been fascinated by Bitcoin for for over a year, and have decided to join bitcointalk.org to get more involved.
I see Side Chains as more interesting than gold and would really appreciate a summary of the pros and cons they have for Bitcoin.

Why is this even a debated topic?

Probably because some people became invested (financially and/or emotionally) in various strategies which were predicated on certain expectations of how Bitcoin would overcome it's rather obvious weaknesses and did not anticipate sidechains as being one of them.

In this respect sidechains are every bit as much of a 'disruptive technology' to Bitcoin as Bitcoin is to the mainstream debt-based monetary system.  Naturally some people will lose, but they won't be going down without a fight.


Thanks for your reply. I'm not convinced Bitcoin is all that disruptive, the problem I see in fiat, is governments are creating more than relative GDP. To that existent Bitcoin can be a store of value to offset the overprinting.

So I'm not seeing the potential disruption to Bitcoin. As a small holder of Bitcoin having survived one bear market, how do Side Chains disrupt Bitcoin and what does this mean for it's function as a store of value?

I just mean that if one had been planning their activities based on the assumption that Bitcoin would balloon and centralize to a smaller number of favored infrastructure providers (as one example) then sidechains could be considered highly disruptive to plans built around that expectation.

One (of many) business opportunities was the construction of a tainting authority.  It could not work in a free ecosystem and also could not work without a government mandate which would force customers (e.g., TigerDirect) onto the entity's client list.

I've outlined before how tainting could be bootstrapped without any changes to Bitcoin's protocol and with a small fraction of vendors being on-board and under modern law they could easily be made to have no choice.  In a nutshell, I will devalue a tainted BTC you wish to give me even if I don't agree with tainting and have no expectation of using it at TigerDirect.  The reason I will devalue it is that I myself have to get rid of it at some point.

Anyway, sidechains can make tainting vastly more difficult because of the natural mixing and distribution effects which happen within the chains.  And they can pop up in whack-a-mole fasion if attacked.  Even if tainting impacts sidechains via the peg, I will tend to devalue sidechain currency less because there is a strong possibility that I will do much of my activity completely within the chain.


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November 15, 2014, 07:58:49 PM
 #16969

If you have big enough user base then even 100% hash power attack cannot spend this BTC b/c it is not valid transaction.

1. you can ignore OP_SIDECHAINPROOFVERIFY
2. if some miner will add transaction what will spent BTC from address using OP_SIDECHAINPROOFVERIFY  into block  without valid "SideChain proof"  then this block will be ignored b/c it will contain invalid tx.

You are correct.  In order for the SPV locking/unlocking mechanism to be secure, strong support for sidechains across the bitcoin community is required.  

I brought up the fact that implementing SPV proofs in bitcoin still requires broad support because there's been confusion caused by the word "soft" in "soft fork."  For some reason many people seem to think that soft-forking changes can "just be done" and that because the fork is "soft" it's like a little furry and unthreatening bunny.  I think this is disingenuous, as soft-forks still require broad support and a lot of bad stuff could be implemented with them (e.g., blacklisting).  

At the risk of taking maaku's comment out of context:

Quote from: Mark Friedenbach (23 October 2014 Reddit "Sidechain" AMA)
It is possible for multiple sidechains to exist, each with larger block sizes and/or shorter block times, and only the transfers between these high-speed payment networks need to hit the bitcoin blockchain. This would allow bitcoin the currency to scale as required without requiring significant block size increases.

While this is true, it seems to imply that achieving scalability via sidechains is superior (easier and safer) than some version of Gavin's scalability proposal.  One of my concerns with the sidechain proposal is that it might seem like an "alternative" to moving forward with the max-block-size hard fork.  I think we should be looking at both proposals as orthogonal (and we should move forward with a hard fork to address scalability, regardless).

I would also argue that adding OP_SIDECHAINPROOFVERIFY poses a larger existential risk to bitcoin than a hard-fork to increase the max block size.  The reason I think this is that OP_SIDECHAINPROOFVERIFY fundamentally changes bitcoin, whereas increasing the max block size has always been on our road map.  Will support for SPV sidechains set a precedent that adding "features" to bitcoin is OK if it can be done with a soft fork?  Remember, "features" like blacklisting and other nasty stuff can be implemented as a soft fork too.  

I'm trying to make two points: (1) soft forks pose no less an existential threat to bitcoin than hard forks (although they pose less technical risk), and (2) soft forks still require consensus, it's just that that consensus is probably easier to obtain since it only requires support from the majority of network hash power.  

I'll conclude by saying that I think sidechains are exciting, I hope to see federated sidechains become a thing, and I'm "undecided" on SPV sidechains that require a change to bitcoin (let's see what happens with federated sidechains first Smiley).  I support moving forward with a hard fork to address scalability now.

That is a very reasonable position. Thanks for your input.

One argument I would like to make is I don't consider SPV to be a "feature" like blacklisting but moreso an "upgrade" on a scheme that is already possible within the existing Bitcoin protocol (federated peg can be implemented right now as you have pointed out).

This gives us the chance to tinker with the tech before making a decision on whether or not the "improved capabilities" of the SPVproof should be implemented.

Moreover SPVproof is a very "neutral" update whereas blacklisting (and other "nasty stuff") is inherently a very biased position that hurts the fungibility property of Bitcoin at its core.

"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 15, 2014, 08:04:35 PM
 #16970

If you don't see the disruption in Bitcoin I would suggest you concentrate on this before engaging sidechains.

Here is an excellent post from Peter R here about the importance of money as a ledger and why Bitcoin is the best ledger technology available to us :

https://bitcointalk.org/index.php?topic=68655.msg9247581#msg9247581

Thanks for the reference.

Speaking of that post…



…I'm now an even bigger fan of David Andolfatto  Cool



Of course, ZeroHedge took this humorous comment out of context, blew it out of proportion, and Prof. Andolfatto has now apologized.

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November 15, 2014, 08:09:14 PM
 #16971

If you have big enough user base then even 100% hash power attack cannot spend this BTC b/c it is not valid transaction.

1. you can ignore OP_SIDECHAINPROOFVERIFY
2. if some miner will add transaction what will spent BTC from address using OP_SIDECHAINPROOFVERIFY  into block  without valid "SideChain proof"  then this block will be ignored b/c it will contain invalid tx.

You are correct.  In order for the SPV locking/unlocking mechanism to be secure, strong support for sidechains across the bitcoin community is required.  

I brought up the fact that implementing SPV proofs in bitcoin still requires broad support because there's been confusion caused by the word "soft" in "soft fork."  For some reason many people seem to think that soft-forking changes can "just be done" and that because the fork is "soft" it's like a little furry and unthreatening bunny.  I think this is disingenuous, as soft-forks still require broad support and a lot of bad stuff could be implemented with them (e.g., blacklisting).  

At the risk of taking maaku's comment out of context:

Quote from: Mark Friedenbach (23 October 2014 Reddit "Sidechain" AMA)
It is possible for multiple sidechains to exist, each with larger block sizes and/or shorter block times, and only the transfers between these high-speed payment networks need to hit the bitcoin blockchain. This would allow bitcoin the currency to scale as required without requiring significant block size increases.

While this is true, it seems to imply that achieving scalability via sidechains is superior (easier and safer) than some version of Gavin's scalability proposal.  One of my concerns with the sidechain proposal is that it might seem like an "alternative" to moving forward with the max-block-size hard fork.  I think we should be looking at both proposals as orthogonal (and we should move forward with a hard fork to address scalability, regardless).

I would also argue that adding OP_SIDECHAINPROOFVERIFY poses a larger existential risk to bitcoin than a hard-fork to increase the max block size.  The reason I think this is that OP_SIDECHAINPROOFVERIFY fundamentally changes bitcoin, whereas increasing the max block size has always been on our road map.  Will support for SPV sidechains set a precedent that adding "features" to bitcoin is OK if it can be done with a soft fork?  Remember, "features" like blacklisting and other nasty stuff can be implemented as a soft fork too.  

I'm trying to make two points: (1) soft forks pose no less an existential threat to bitcoin than hard forks (although they pose less technical risk), and (2) soft forks still require consensus, it's just that that consensus is probably easier to obtain since it only requires support from the majority of network hash power.  

I'll conclude by saying that I think sidechains are exciting, I hope to see federated sidechains become a thing, and I'm "undecided" on SPV sidechains that require a change to bitcoin (let's see what happens with federated sidechains first Smiley).  I support moving forward with a hard fork to address scalability now.

I can agree with you. (only "SPV proof" is not same as "SIDECHAIN PROOF" => it can be SPV proof, SCIP proof, SNARK proof ... )

But there is possible to create more scenarios. For example  "federated sidechains"  can be constructed as { ECDSA signature AND OP_SIDECHAINPROOFVERIFY }

Now I can create transaction what is spending this output {ECDSA and SIDECHAINPROOFVERIFY}
a) ECDSA signature is VALID but SIDECHAINPROOFVERIFY is invalid => if miner will add this transaction into block then he will not get reward b/c it is not valid block b/c it contains invalid transaction.  (I'll only test network by offering big fee ... move my BTC to my new address ) =>  I think you know what consequences it will bring.

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November 15, 2014, 08:30:15 PM
 #16972

Probably because some people became invested (financially and/or emotionally) in various strategies which were predicated on certain expectations of how Bitcoin would overcome it's rather obvious weaknesses and did not anticipate sidechains as being one of them.

In this respect sidechains are every bit as much of a 'disruptive technology' to Bitcoin as Bitcoin is to the mainstream debt-based monetary system.  Naturally some people will lose, but they won't be going down without a fight.

I'm glad to see that we agree for once. It IS disruptive. And it will cause massive volatility whereby we all may lose as you obviously can't comprehend in your eagerness to criticize me out of spite. I'd  love to see your face if and when you lose all your Sound Money BTC value to speculative SC's.  

Bitcoin already has massive volatility in case you didn't notice (which is possible considering the number of 'Bitcoin up' posts you have made in 2014.)  By the laws of nature we cannot all lose.  Sidechains will, if anything, tend to act as a buffer to this volatility just as they will act as a buffer to coding accidents, legislative hassles, etc, etc.

I'd love to see the look on your face as you find yourself sitting on a pile of useless CorpGovCoins (formerly Bitcoin) when it turns out that they are as interesting to people as PayPal-II and some other solution has taken the place that Bitcoin could have occupied as a trusted and autonomous value foundation.



We agree again!

The 2wp creates an offramp to any one of a #of speculative assets (by that I mean anything not BTC or scBTC). The 2wp allows this transformation to occur according to the rules of the SC dev. This breaks the Sound Money linkage of real BTC from its blockchain.

The more SC's created and used in this way, the more USD's Blockstream will make.
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November 15, 2014, 08:39:31 PM
 #16973

I am not a fan of Gavin's current Max Blocksize proposal.  

I've been following your scalability proposal in the Technical Discussion section.  You want to see the max block size adjusted based on blockchain feedback (closed loop), whereas Gavin proposes an open-loop solution.  One risk with Gavin's solution is that it assumes historical growth rates for internet bandwidth will continue moving forward in time.  One risk with your proposal is that it introduces another feedback term into what is surely a nonlinear system (right now the only feedback term is Bitcoin's difficulty adjustment). 

By the way, has anyone heard from DeathAndTaxes?  I'd love to hear his view on both sidechains and scalability. 

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November 15, 2014, 08:40:27 PM
 #16974

I'd love to see the look on your face as you find yourself sitting on a pile of useless CorpGovCoins (formerly Bitcoin) when it turns out that they are as interesting to people as PayPal-II and some other solution has taken the place that Bitcoin could have occupied as a trusted and autonomous value foundation.



this is exactly the dilemma all of us will be placed in by for-profit Blockstream creating all these SC's for whomever will pay the fee.  don't expect them to be selective in their choice of clients.  they are for profit, they have $15M worth of investors looking for returns based on SC construction fees, AND the SC clients who pay the fees expect them to work, as in siphoning off as many BTC from MC as possible to create liquidity and value.  this is a problem.  especially when 40% of core devs + 3 key committers are part of Blockstream.

if any one of these speculative SC's get traction, you will fact a choice; move to SC or stay put on MC.  will SC become the new Bitcoin or will it be possible to upgrade Bitcoin to CorpGovCoins?  do you even want that?

Bitcoin was always meant to be its own Self Contained Financial System.  And by that i meant an inextricable link btwn its BTC and Blockchain (MC).
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November 15, 2014, 08:42:20 PM
 #16975

We agree again!

The 2wp creates an offramp to any one of a #of speculative assets (by that I mean anything not BTC or scBTC). The 2wp allows this transformation to occur according to the rules of the SC dev. This breaks the Sound Money linkage of real BTC from its blockchain.

The more SC's created and used in this way, the more USD's Blockstream will make.

Blockstream does not distribute license for creation of sidechains. Blockstream will be responsible for a minority of the sidechains that will be created : open source

Case in point : Truthcoin.

Offramp exist right now through the federated peg. Sound Money linkage of real BTC from its blockchain is therefore DOA.

Sold your Bitcoins yet?

"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 15, 2014, 08:45:13 PM
 #16976

This is a popular thread in that it's always at the top. I've been fascinated by Bitcoin for for over a year, and have decided to join bitcointalk.org to get more involved.
I see Side Chains as more interesting than gold and would really appreciate a summary of the pros and cons they have for Bitcoin.

Why is this even a debated topic?

Here are some of my thoughts on the pros pulled up from a previous post. Maybe someone can provide some summary of reasonable cons that are well argued and based on facts and not speculation. I know there certainly was a couple of these throughout the discussion

Quote
Sidechains enable miners to continue claiming BTC transactions fxs in a future where the Bitcoin blockchain will be unable to accomodate all types or needs of transactions. It incentivizes miners to continue securing the network in the best possible way by insuring their profitability.

It is an improvement on the current situation where transactions are ALREADY tending to be processed off-chain for convenience, speed and utility. Given the absolute existence and growth of demand for transactions types that are not implementable on the Bitcoin sidechain, the exodus of transactions to off-chain schemes is a rational concern going forward.

This is not only true with concern to miners and their transaction fees but also for the integrity of the Bitcoin ledger. Off-chain schemes inherently require additional trust in that the ledger will be preserved. The most likely suspects to inflate Bitcoin in its current state are these off-chain schemes. SPVProof sidechains enables the possibility to ensure the conservation of the ledger on a protocol level. With this we potentially eliminate fractional reserve schemes. If your chain/service/application do not recognize and preserve my stake in the ledger, at the extent that I am not looking to speculate on it,  then you will not have my money and neither will you profit from the ledger's network effect.

Of course, this feature can be changed at the whims of the sidechain creator but it is in the interest of the consensus majority of the network to preserve the value of their investment, no matter the speculative prospects.

....

SPVProof sidechains, combined with merged-mining, enables miners to accomodate different chains with their security while reserving the rights to claim the transactions of any chain that gains significant traction. Their services are like a stamp of approval. Inclusion into the circle of chains who are MM by miners in some sort validates the legitimacy of a chain.

It is reasonable to assume a majority of sidechains will be bootstrapped on top of a federated model as it enables more security in the probable scenario where you will not be "backed" by the majority of miners from the start. You'll have to "earn your stripes", especially if you are a private entity/corporation.

The most established and community supported/used chains will end up being nearly as secure as BTC's mainchain simply because their value will command the ultimate security/decentralization

Awesome reply thanks,
I see the fundamental need for Bitcoin is the store of value, we also have many other crypto coins for other interesting functions, is this the potential source of disruption referred too?

Why do you feel miners need more incentives? Isn't that like central bank feeling like it's good to incentivize parts of the economy?

It also occurs to me that you want Bitcoin to compete with other cryptocurrencies, why can't we use other products for speed and utility?
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November 15, 2014, 08:46:12 PM
 #16977

We agree again!

The 2wp creates an offramp to any one of a #of speculative assets (by that I mean anything not BTC or scBTC). The 2wp allows this transformation to occur according to the rules of the SC dev. This breaks the Sound Money linkage of real BTC from its blockchain.

The more SC's created and used in this way, the more USD's Blockstream will make.

Blockstream does not distribute license for creation of sidechains. Blockstream will be responsible for a minority of the sidechains that will be created : open source

if profits aren't important for them, re-organize as a non-profit.
Quote

Case in point : Truthcoin.

agree.  Truthcoin is a great example of all the SC's that will be created that will cause confusion in the market place as to where to put your money:  BTC or TC?
Quote

Offramp exist right now through the federated peg. Sound Money linkage of real BTC from its blockchain is therefore DOA.

Bullshit.  no source code change has occurred therefore no systemic risk, unlike with SPVproof.
Quote

Sold your Bitcoins yet?


troll
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November 15, 2014, 08:53:59 PM
 #16978

This is a popular thread in that it's always at the top. I've been fascinated by Bitcoin for for over a year, and have decided to join bitcointalk.org to get more involved.
I see Side Chains as more interesting than gold and would really appreciate a summary of the pros and cons they have for Bitcoin.

Why is this even a debated topic?

Probably because some people became invested (financially and/or emotionally) in various strategies which were predicated on certain expectations of how Bitcoin would overcome it's rather obvious weaknesses and did not anticipate sidechains as being one of them.

In this respect sidechains are every bit as much of a 'disruptive technology' to Bitcoin as Bitcoin is to the mainstream debt-based monetary system.  Naturally some people will lose, but they won't be going down without a fight.


Thanks for your reply. I'm not convinced Bitcoin is all that disruptive, the problem I see in fiat, is governments are creating more than relative GDP. To that existent Bitcoin can be a store of value to offset the overprinting.

So I'm not seeing the potential disruption to Bitcoin. As a small holder of Bitcoin having survived one bear market, how do Side Chains disrupt Bitcoin and what does this mean for it's function as a store of value?

If you don't see the disruption in Bitcoin I would suggest you concentrate on this before engaging sidechains.

Here is an excellent post from Peter R here about the importance of money as a ledger and why Bitcoin is the best ledger technology available to us :

https://bitcointalk.org/index.php?topic=68655.msg9247581#msg9247581


Thanks for the link I see the potential, it would seem Side Chains are like other ledgers that are linked to the Bitcoin ledger. I see how they could be a threat, if they grow in value it would detract from the primary ledger of value, possibly competing with it.
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November 15, 2014, 09:00:32 PM
 #16979

I'd love to see the look on your face as you find yourself sitting on a pile of useless CorpGovCoins (formerly Bitcoin) when it turns out that they are as interesting to people as PayPal-II and some other solution has taken the place that Bitcoin could have occupied as a trusted and autonomous value foundation.



this is exactly the dilemma all of us will be placed in by for-profit Blockstream creating all these SC's for whomever will pay the fee.  don't expect them to be selective in their choice of clients.  they are for profit, they have $15M worth of investors looking for returns based on SC construction fees, AND the SC clients who pay the fees expect them to work, as in siphoning off as many BTC from MC as possible to create liquidity and value.  this is a problem.  especially when 40% of core devs + 3 key committers are part of Blockstream.

if any one of these speculative SC's get traction, you will fact a choice; move to SC or stay put on MC.  will SC become the new Bitcoin or will it be possible to upgrade Bitcoin to CorpGovCoins?  do you even want that?

Bitcoin was always meant to be its own Self Contained Financial System.  And by that i meant an inextricable link btwn its BTC and Blockchain (MC).

Your repeating the same delusional paranoia is not going to make it any more real.

Blockstream, I imagine, can be very selective in choosing their client as it as been mentioned they already have a gang of top level corporate clients lined up.

Furthermore, it is not Blockstream's job to generate adoption for their clients' SC. If their client are willing to pay what I imagine is a pretty hefty fee for their service, then I imagine that they expect their sidechain idea to serve some utility or application that fulfills a demand or a need in the market. For these sidechains to succeed, unlike your delusional self would believe, they do not have to "siphon" as many BTC as possible. The goal here is to create a service/an application that uses the BTC currency as its unit of account not to compete with the BTC currency. Blockstream, I'm sure, is not in the business of creating "speculative" sidechains, this job will be left to scammy developers like Truthcoin.




"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 15, 2014, 09:01:33 PM
 #16980

This is a popular thread in that it's always at the top. I've been fascinated by Bitcoin for for over a year, and have decided to join bitcointalk.org to get more involved.
I see Side Chains as more interesting than gold and would really appreciate a summary of the pros and cons they have for Bitcoin.

Why is this even a debated topic?

Probably because some people became invested (financially and/or emotionally) in various strategies which were predicated on certain expectations of how Bitcoin would overcome it's rather obvious weaknesses and did not anticipate sidechains as being one of them.

In this respect sidechains are every bit as much of a 'disruptive technology' to Bitcoin as Bitcoin is to the mainstream debt-based monetary system.  Naturally some people will lose, but they won't be going down without a fight.


Thanks for your reply. I'm not convinced Bitcoin is all that disruptive, the problem I see in fiat, is governments are creating more than relative GDP. To that existent Bitcoin can be a store of value to offset the overprinting.

So I'm not seeing the potential disruption to Bitcoin. As a small holder of Bitcoin having survived one bear market, how do Side Chains disrupt Bitcoin and what does this mean for it's function as a store of value?

I just mean that if one had been planning their activities based on the assumption that Bitcoin would balloon and centralize to a smaller number of favored infrastructure providers (as one example) then sidechains could be considered highly disruptive to plans built around that expectation.

One (of many) business opportunities was the construction of a tainting authority.  It could not work in a free ecosystem and also could not work without a government mandate which would force customers (e.g., TigerDirect) onto the entity's client list.

I've outlined before how tainting could be bootstrapped without any changes to Bitcoin's protocol and with a small fraction of vendors being on-board and under modern law they could easily be made to have no choice.  In a nutshell, I will devalue a tainted BTC you wish to give me even if I don't agree with tainting and have no expectation of using it at TigerDirect.  The reason I will devalue it is that I myself have to get rid of it at some point.

Anyway, sidechains can make tainting vastly more difficult because of the natural mixing and distribution effects which happen within the chains.  And they can pop up in whack-a-mole fasion if attacked.  Even if tainting impacts sidechains via the peg, I will tend to devalue sidechain currency less because there is a strong possibility that I will do much of my activity completely within the chain.


Thanks
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