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Author Topic: Gold collapsing. Bitcoin UP.  (Read 2013438 times)
cypherdoc
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November 17, 2014, 05:35:59 PM
 #17221

whenever we get proposals to "fix Bitcoin" as we are currently getting with SC's, it's often helpful to step back to before the proposal to help reassess where we actually.  below is a talk by Daniel Krawiscz, whose views very much correspond to mine.  listen carefully and realize everything is just fine and there is nothing to panic about by making rash changes to the protocol.  other points that struck me in this talk are:

https://www.youtube.com/watch?v=iKRH_zxpdjM

1.  OT appears to be a better federated system in that it doesn't require another currency and doesn't require an spvp change to the protocol which would "siphon off" BTC value from its blockchain.
2.  he, and Balaji Srinivasan here, https://www.youtube.com/watch?v=cOubCHLXT6A, both advocate "exiting the system" principles if you are dissatisfied with your current existing fiat system.  exiting the current system implies that there is another new and secure system to which you can flee which will protect you.  since this is high risk, this system would have to be a Self Contained Financial System that is secure, reliable, and firewalled off from outside intervention.  ideally, it would be a public good, not subject to improprieties or vested interests that might be motivated to "profit" off said system.  this system, as it currently and already stands, is Bitcoin.  its transactional units are inextricably linked to its blockchain for maximum impenetrable security.
3.  i think the reason you're hearing such common calls for the "blockchain" as distinct and removed from its "currency unit" is b/c the outside public intuitively realizes that if left as is, Bitcoin fundamentally disrupts the current fiat system.  they can conceptually "understand" a blockchain as new "tech" while rejecting the currency unit.  it also allows them to continue to "resist" buying a seat at the table by using cold hard cash or trading something of great value for BTC.  if you can subvert the system by changing the rules, ie the protocol, to break the inextricable link, then you can "attract" value out of the Bitcoin system and convert or transform that value into all manner of inflationary, speculative assets.  this is what the spvp or 2wp does.  we don't want that.

i view the spvp as a breach in that system, like a leaky valve or offramp thru which real value can be siphoned off and transformed into all manner of speculative assets.  this is a problem.  guys like brg444 have already shown their cards that Bitcoin "is broken" and if you just insert this "funnel" or 2wp (spvp) into the walls of what now is an impenetrable system, it will make it "better".  i think this is fundamentally wrong and is a major flaw in the Blockstream WP.  the mere insertion of this funnel will break Bitcoin's Sound Money principles as it allows an offramp into all manner of insecure, alternative ledger systems (fake blockchains).  if we can know ahead of time that it "might" be a problem, why insert it?  it's not enough to say, "let's just let them put it in and see what happens".  if they're wrong, and i am right, it will destroy the system as it erodes confidence that we indeed have a secure firewalled off Bitcoin not subject to for-profit opportunities and structural weakness.
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sidhujag
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November 17, 2014, 05:44:10 PM
 #17222

Its sad but true that I think OT never really took off because it couldn't be used as a get rich scheme or P&D Sad The OT client for grandma offered what a 500btc bounty or something crazy? But noone ever did it and I don't think those bounty awarders are still around to offer that kinda money for the nice client... otherwise I'd prob take a stab at it.

★☆★Syscoin - Decentralized Marketplace and Multisig Platform
Pay with Bitcoin, ZCash and many more
For more visit Syscoin.org  ★☆★
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November 17, 2014, 05:50:39 PM
 #17223

TC is a pathetic example and an obvious scam that will attract so much suckers before it gets exposed.

TC in this statement is TruthCoin.

brg444 This guy has a much better take on what SC are than you.
He understand the mining incentives that make Bitcoin, the only scam he's pulling is capitalizing on the inflation effect offered by the idea of SC's, someone who gets mining like this and looks for a win win without addressing the effect the proposed protocol change will have on mining incentives is a businessman, he isn't the scanner you think he is. We'll see thousand of these   Wink

brg444 read the article you may learn something please address all criticism on the appropriate blog, feel free to invite my input over there if you like.

http://www.truthcoin.info/blog/pow-and-mining/



Well, turns out this guy is a pretty smart fellow. It would be nice to have HIS input on sidechains. Every articles on his blog so far are very interesting and full of insights.



Prediction markets are the next big thing that the blockchain can offer, analogous to upending the financial system, prediction markets will upset the knowledge markets and services. Actually we are working with him to maybe collaborate to come up with a good implementation of prediction markets using Syscoin which is merged-mined... preliminary work is being done (https://github.com/syscoin/syscoin/commit/8dffafb59f4e0b67141c22a035500a3b714af3e5)

★☆★Syscoin - Decentralized Marketplace and Multisig Platform
Pay with Bitcoin, ZCash and many more
For more visit Syscoin.org  ★☆★
Adrian-x
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November 17, 2014, 06:06:34 PM
 #17224

Blockstream's motto: "Can't be evil" - cypher will have a field day with this Grin

even Google's Eric Schmidt is getting in on the action. 

http://blogs.wsj.com/moneybeat/2014/11/17/linked-in-sun-microsystems-founders-lead-big-bet-on-bitcoin-innovation/

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
cypherdoc
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November 17, 2014, 06:08:03 PM
 #17225

whenever we get proposals to "fix Bitcoin" as we are currently getting with SC's, it's often helpful to step back to before the proposal to help reassess where we actually.  below is a talk by Daniel Krawiscz, whose views very much correspond to mine.  listen carefully and realize everything is just fine and there is nothing to panic about by making rash changes to the protocol.  other points that struck me in this talk are:

https://www.youtube.com/watch?v=iKRH_zxpdjM

1.  OT appears to be a better federated system in that it doesn't require another currency and doesn't require an spvp change to the protocol which would "siphon off" BTC value from its blockchain.
2.  he, and Balaji Srinivasan here, https://www.youtube.com/watch?v=cOubCHLXT6A, both advocate "exiting the system" principles if you are dissatisfied with your current existing fiat system.  exiting the current system implies that there is another new and secure system to which you can flee which will protect you.  since this is high risk, this system would have to be a Self Contained Financial System that is secure, reliable, and firewalled off from outside intervention.  ideally, it would be a public good, not subject to improprieties or vested interests that might be motivated to "profit" off said system.  this system, as it currently and already stands, is Bitcoin.  its transactional units are inextricably linked to its blockchain for maximum impenetrable security.
3.  i think the reason you're hearing such common calls for the "blockchain" as distinct and removed from its "currency unit" is b/c the outside public intuitively realizes that if left as is, Bitcoin fundamentally disrupts the current fiat system.  they can conceptually "understand" a blockchain as new "tech" while rejecting the currency unit.  it also allows them to continue to "resist" buying a seat at the table by using cold hard cash or trading something of great value for BTC.  if you can subvert the system by changing the rules, ie the protocol, to break the inextricable link, then you can "attract" value out of the Bitcoin system and convert or transform that value into all manner of inflationary, speculative assets.  this is what the spvp or 2wp does.  we don't want that.

i view the spvp as a breach in that system, like a leaky valve or offramp thru which real value can be siphoned off and transformed into all manner of speculative assets.  this is a problem.  guys like brg444 have already shown their cards that Bitcoin "is broken" and if you just insert this "funnel" or 2wp (spvp) into the walls of what now is an impenetrable system, it will make it "better".  i think this is fundamentally wrong and is a major flaw in the Blockstream WP.  the mere insertion of this funnel will break Bitcoin's Sound Money principles as it allows an offramp into all manner of insecure, alternative ledger systems (fake blockchains).  if we can know ahead of time that it "might" be a problem, why insert it?  it's not enough to say, "let's just let them put it in and see what happens".  if they're wrong, and i am right, it will destroy the system as it erodes confidence that we indeed have a secure firewalled off Bitcoin not subject to for-profit opportunities and structural weakness.

forgot point #4:

4.  Daniel, back in March when he gave this talk, viewed the core dev system at the time as too centralized.  this was before Blockstream and the WP came out a month ago.  if you agree with him, how does further centralizing the 40% of core devs +3 of the top committers into one for-profit company help, especially when its core business model is to sell SC construction to SC entities all of whom might be unfriendly to Bitcoin proper?
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November 17, 2014, 06:10:01 PM
 #17226

Its sad but true that I think OT never really took off because it couldn't be used as a get rich scheme or P&D Sad The OT client for grandma offered what a 500btc bounty or something crazy? But noone ever did it and I don't think those bounty awarders are still around to offer that kinda money for the nice client... otherwise I'd prob take a stab at it.
i think its going strong, its the best solution not a failed one.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
cypherdoc
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November 17, 2014, 06:11:03 PM
 #17227

Blockstream's motto: "Can't be evil" - cypher will have a field day with this Grin

even Google's Eric Schmidt is getting in on the action.  

http://blogs.wsj.com/moneybeat/2014/11/17/linked-in-sun-microsystems-founders-lead-big-bet-on-bitcoin-innovation/

you want these guys to "buy in" to the Bitcoin system buy purchasing BTC units which they can then use for their own purposes.  you don't want them to "siphon" value out of Bitcoin by breaking its Sound Money principles by breaking the link btwn the currency unit and its blockchain.

i know you know this but i'm just clarifying how i see these developments.
cypherdoc
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November 17, 2014, 06:12:49 PM
 #17228

Its sad but true that I think OT never really took off because it couldn't be used as a get rich scheme or P&D Sad The OT client for grandma offered what a 500btc bounty or something crazy? But noone ever did it and I don't think those bounty awarders are still around to offer that kinda money for the nice client... otherwise I'd prob take a stab at it.
i think its going strong, its the best solution not a failed one.


perhaps this is the break that OT needs as the SC federated server model is forcing all of us to understand and consider such a system as an alternative.
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November 17, 2014, 06:19:46 PM
 #17229

you can see that even Vikram Pandit doesn't get it.  remember, the only reason ppl mine for or use a new alternative currency like Bitcoin is b/c it is a SOV that can't be inflated or transformed by inflationary gvt policies or something like a spvp:

http://www.bloomberg.com/video/wreckage-of-flight-mh17-removed-from-crash-site-NQ~D2zzcSW2oOXBCZFr_2g.html
cypherdoc
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November 17, 2014, 06:22:01 PM
 #17230

haha, another Fed auction:

http://www.usmarshals.gov/assets/2014/dpr-bitcoins/
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November 17, 2014, 06:27:19 PM
 #17231


Paging Tim Draper. Excellent dollar-cost-avg opportunity.

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
Cryptoasset rankings and metrics for investors: http://onchainfx.com
Melbustus
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November 17, 2014, 06:30:46 PM
 #17232

you can see that even Vikram Pandit doesn't get it.  remember, the only reason ppl mine for or use a new alternative currency like Bitcoin is b/c it is a SOV that can't be inflated or transformed by inflationary gvt policies or something like a spvp:

http://www.bloomberg.com/video/wreckage-of-flight-mh17-removed-from-crash-site-NQ~D2zzcSW2oOXBCZFr_2g.html
http://www.coindesk.com/ex-citigroup-ceo-vikram-pandit-digital-currencies-spawning-innovation/

(fixed link)

Yeah, here's the indicative quote from Pandit (talking about Coinbase): "It's a wallet for bitcoin, but could be a wallet for 'bityen'. It could be 'bitdollar', it could be 'biteuro' – doesn't matter," said Pandit.

It absolutely DOES matter!

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
Cryptoasset rankings and metrics for investors: http://onchainfx.com
cypherdoc
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November 17, 2014, 06:32:02 PM
 #17233

an analogy to the self contained financial system that i envision with Bitcoin is gold.

there is a finite amount of gold circulating throughout the world.  it's stored, it's used, it's supply is theoretically immutable.  none of it gets "transformed" to other speculative assets at any time.  and for 5000 yrs it served as the basis for a sound money system. 

by promoting the transformation of BTC units over to "different less secure ledgers" which now seems to be accepted here by even brg444, how is Bitcoins Sound Money function sustained?
Adrian-x
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November 17, 2014, 06:32:26 PM
 #17234

Blockstream's motto: "Can't be evil" - cypher will have a field day with this Grin

even Google's Eric Schmidt is getting in on the action.  

http://blogs.wsj.com/moneybeat/2014/11/17/linked-in-sun-microsystems-founders-lead-big-bet-on-bitcoin-innovation/

you want these guys to "buy in" to the Bitcoin system buy purchasing BTC units which they can then use for their own purposes.  you don't want them to "siphon" value out of Bitcoin by breaking its Sound Money principles by breaking the link btwn the currency unit and its blockchain.

i know you know this but i'm just clarifying how i see these developments.

bang on. also explains the long bull market, metaphorically, VC,s will get to a stage like early mining, at some point its better to invest in BTC than it is to try and make earn it.
the idea isn't to disrupt the economy, its to disrupt the financial system used to run the economy.

Bitcoin is a risk distribution virus, more powerful than any biological weapon, it assimilates and leave a working economy in its wake, all we have to do is protect the DNA that makes it work, punting economic energy into Bitcoin is how it grows.  

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
Peter R
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November 17, 2014, 06:33:35 PM
 #17235

The same value can not be held simultaneously in the main chain and in a side chain.

But the value of the sidechain is derived from the mainchain and so the scarcity and ledger is respected.

This is a very interesting theoretical question: "where is the value stored for a sidechain?"  

Let's do a little thought experiment to try to come up with a reasonable answer.  The purpose of the thought experiment is to isolate the effect of the 2-way peg; it's meant to be a tool to help us understand where the value is actually stored, and not meant to represent plausible future scenarios.  We'll ask what happens to the value of scBTC should the 2-way peg be instantly and permanently severed (and the locked BTC on the main chain frozen).  If one argues that the value is always stored on Bitcoin's Blockchain, then I think in all cases the value of scBTC should fall to zero.  It's pretty clear to me that that won't actually happen in all cases:

Case #1: Small sidechain backed by 0.01% of the main-chain BTC

Here we have a small sidechain used, perhaps, for experimentation with faster confirmation times.  Very little real economic activity takes place on this side chain.  When the 2-way peg is severed, I believe the value of scBTC#1 would drop rapidly to zero, as everyone would realize that another sidechain employing the same features but maintaining the BTC backing could easily be recreated.  The network effect is too small to matter.

--> value is stored on Bitcoin's Blockchain.

Case #2: Large sidechain backed by 10% of the main-chain BTC

Here we have a large sidechain that perhaps employs ring-signatures for improved anonymity.  This scBTC#2 has become the token of choice for black-market activity such as the purchase of illicit goods from SilkRoad 3.0.  When the 2-way peg is severed in this case, the value does not fall to zero. The value immediately drops, because many individuals would prefer to hold BTC than unbacked scBTC#2.  However, it does not drop to zero because speculators and scBTC#2 users realize that the huge network of users and wallet infrastructure already set up to accept scBTC#2 will maintain demand for unbacked scBTC#2.  scBTC#2 becomes an alt coin and trades with a floating exchange rate with respect to main-chain BTC.

--> value is stored in both Bitcoin's Blockchain and the sidechain ledger.  

Case #3: Uber sidechain backed by 60% of the main-chain BTC

Here we consider the case where the majority of bitcoins are stored on the sidechain.  Perhaps this sidechain is just "better" than bitcoin, and there's a huge push by merchants to move all economic activity here.  Speculators also decide to move their BTC to this sidechain, as they fear that a severing of the 2-way peg would hurt the value of their main-chain BTC (they see that the network-effects of this sidechain are becoming greater than Bitcoin's).  Now when the 2-way peg is severed, I would argue that it would be the value of bitcoin that would fall and the value of scBTC would actually rise!  Scarcity of scBTC#3 is actually greater once the peg is severed (no more main-chain BTC can be converted) and since the majority of economic activity is taking place on this chain, the ledger for scBTC#3 becomes the dominant "memory" for our money.    

--> value is stored mostly on the sidechain ledger.  


Once again, the purpose of this thought experiment was not to propose "realistic scenarios"; the purpose was to help answer the question "on which ledger is the value stored?"  I think the answer is that for low-levels of adoption, the value remains stored on Bitcoin's Blockchain.  But as the network effect of the sidechain grows, a larger component of the value is actually stored on the sidechain's ledger.  




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November 17, 2014, 06:37:45 PM
 #17236

an analogy to the self contained financial system that i envision with Bitcoin is gold.

there is a finite amount of gold circulating throughout the world.  it's stored, it's used, it's supply is theoretically immutable.  none of it gets "transformed" to other speculative assets at any time.  and for 5000 yrs it served as the basis for a sound money system. 

by promoting the transformation of BTC units over to "different less secure ledgers" which now seems to be accepted here by even brg444, how is Bitcoins Sound Money function sustained?

it gets transformed into jewelry, btw, this then becomes its intrinsic value that drives demand,  Roll Eyes the new demand pulls up the price win win. 

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
justusranvier
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November 17, 2014, 06:43:01 PM
 #17237

Its sad but true that I think OT never really took off because it couldn't be used as a get rich scheme or P&D Sad The OT client for grandma offered what a 500btc bounty or something crazy? But noone ever did it and I don't think those bounty awarders are still around to offer that kinda money for the nice client... otherwise I'd prob take a stab at it.
i think its going strong, its the best solution not a failed one.
The reason you're not hearing much about OT is that Monetas is spending a lot of time working on voting pools, which are a hard problem to solve and also a backend technology.

When exchanges start using voting pools to handle customer deposits, there will be a great many OT users who won't even realize they're using it.
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November 17, 2014, 06:49:51 PM
 #17238

Its sad but true that I think OT never really took off because it couldn't be used as a get rich scheme or P&D Sad The OT client for grandma offered what a 500btc bounty or something crazy? But noone ever did it and I don't think those bounty awarders are still around to offer that kinda money for the nice client... otherwise I'd prob take a stab at it.
i think its going strong, its the best solution not a failed one.

I also think they are working on it.  I recently got the bounty for Namecoin integration (which I did) paid out.  Nowhere close to 500 BTC, though. Wink

Use your Namecoin identity as OpenID: https://nameid.org/
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November 17, 2014, 06:49:57 PM
 #17239

an analogy to the self contained financial system that i envision with Bitcoin is gold.

there is a finite amount of gold circulating throughout the world.  it's stored, it's used, it's supply is theoretically immutable.  none of it gets "transformed" to other speculative assets at any time.  and for 5000 yrs it served as the basis for a sound money system. 

by promoting the transformation of BTC units over to "different less secure ledgers" which now seems to be accepted here by even brg444, how is Bitcoins Sound Money function sustained?

it gets transformed into jewelry, btw, this then becomes its intrinsic value that drives demand,  Roll Eyes the new demand pulls up the price win win. 

i don't see jewelry as a transformation of gold itself.  the added on value is the beauty that's crafted into gold jewelry.  the original gold supply still hasn't changed.
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November 17, 2014, 06:54:42 PM
 #17240

The same value can not be held simultaneously in the main chain and in a side chain.

But the value of the sidechain is derived from the mainchain and so the scarcity and ledger is respected.

This is a very interesting theoretical question: "where is the value stored for a sidechain?"  

Let's do a little thought experiment to try to come up with a reasonable answer.  The purpose of the thought experiment is to isolate the effect of the 2-way peg; it's meant to be a tool to help us understand where the value is actually stored, and not meant to represent plausible future scenarios.  We'll ask what happens to the value of scBTC should the 2-way peg be instantly and permanently severed (and the locked BTC on the main chain frozen).  If one argues that the value is always stored on Bitcoin's Blockchain, then I think in all cases the value of scBTC should fall to zero.  It's pretty clear to me that that won't actually happen in all cases:

Case #1: Small sidechain backed by 0.01% of the main-chain BTC

Here we have a small sidechain used, perhaps, for experimentation with faster confirmation times.  Very little real economic activity takes place on this side chain.  When the 2-way peg is severed, I believe the value of scBTC#1 would drop rapidly to zero, as everyone would realize that another sidechain employing the same features but maintaining the BTC backing could easily be recreated.  The network effect is too small to matter.

--> value is stored on Bitcoin's Blockchain.

Case #2: Large sidechain backed by 10% of the main-chain BTC

Here we have a large sidechain that perhaps employs ring-signatures for improved anonymity.  This scBTC#2 has become the token of choice for black-market activity such as the purchase of illicit goods from SilkRoad 3.0.  When the 2-way peg is severed in this case, the value does not fall to zero. The value immediately drops, because many individuals would prefer to hold BTC than unbacked scBTC#2.  However, it does not drop to zero because speculators and scBTC#2 users realize that the huge network of users and wallet infrastructure already set up to accept scBTC#2 will maintain demand for unbacked scBTC#2.  scBTC#2 becomes an alt coin and trades with a floating exchange rate with respect to main-chain BTC.

--> value is stored in both Bitcoin's Blockchain and the sidechain ledger.  

Case #3: Uber sidechain backed by 60% of the main-chain BTC

Here we consider the case where the majority of bitcoins are stored on the sidechain.  Perhaps this sidechain is just "better" than bitcoin, and there's a huge push by merchants to move all economic activity here.  Speculators also decide to move their BTC to this sidechain, as they fear that a severing of the 2-way peg would hurt the value of their main-chain BTC (they see that the network-effects of this sidechain are becoming greater than Bitcoin's).  Now when the 2-way peg is severed, I would argue that it would be the value of bitcoin that would fall and the value of scBTC would actually rise!  Scarcity of scBTC#3 is actually greater once the peg is severed (no more main-chain BTC can be converted) and since the majority of economic activity is taking place on this chain, the ledger for scBTC#3 becomes the dominant "memory" for our money.    

--> value is stored mostly on the sidechain ledger.  


Once again, the purpose of this thought experiment was not to propose "realistic scenarios"; the purpose was to help answer the question "on which ledger is the value stored?"  I think the answer is that for low-levels of adoption, the value remains stored on Bitcoin's Blockchain.  But as the network effect of the sidechain grows, a larger component of the value is actually stored on the sidechain's ledger.  





this is, imo, problematic for BTC holders in #2 and #3.  the realization that BTC value units now have the potential to "leak" from what's supposed to be a self contained firewalled off system will destroy Bitcoins Sound Money function.  right now, i could buy gold and throw it in a safe and never access it for the rest of my life and, in the absence of the Bitcoin alternative, be confident that it would retain its value.  in your demonstrated scenarios above, i could NEVER count on that.  therefore, the natural conclusion is that Bitcoin would NOT be Sound Money.
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