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Author Topic: Gold collapsing. Bitcoin UP.  (Read 2031182 times)
tvbcof
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November 17, 2014, 07:52:17 PM
 #17261


I think, that value is always stored in MC. You can only put your bitcoins into "escrow" (lock them in main-chain) and use "value" on side-chain.


Shouldn't you then believe that the severing of 2-way peg would result in a scBTC value of zero in all cases?  I think I've convincingly shown that this would not always be the case.  Therefore, a % of the value must actually be stored on the sidechain's ledger.  

Sidechains introduce a huge marginal value-add by providing services which people need and cannot achieve on the main chain.  My seat-of-the-pants estimate is that this will easily account for any increase in value associated with scBTC on an ecosystem level and some of the value will probably back-wash into Bitcoin itself in a big way.


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November 17, 2014, 07:54:10 PM
 #17262


I think this is right. The same using other words: There is a separate value for the scBTC. When the peg is broken, this value is revealed. It also means that while the peg is intact, the holding preference would be with bitcoin in cases #1 and #2, and with scBTC in case #3. This will suppress the usage of scBTC #1 and #2, and may render them less and less liquid.

The problem for scBTC in case #3, is that it first will have to survive a period with less freefloating value, so it will have a problem achiveing the status of #3.

Blockstream are attracting big clients, they want to run entire countries on SideChains, one way to grow it is to do a 1934  Gold Reserve Act  and have everyone convert, they could even do it at favorable rates above current exchange rates. you cant dismiss #3 is the point I'm making.  

I agree it is possible. And better than 100% reserve gold certificates, which may have had a higher value sometimes due to ease of transport. In the case of sidechains, we have provable reserves. So it is possible, but the quality of the sidechain must be really good.

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November 17, 2014, 07:55:48 PM
 #17263


I think, that value is always stored in MC. You can only put your bitcoins into "escrow" (lock them in main-chain) and use "value" on side-chain.


Shouldn't you then believe that the severing of 2-way peg would result in a scBTC value of zero in all cases?  I think I've convincingly shown that this would not always be the case.  Therefore, a % of the value must actually be stored on the sidechain's ledger.  

If 2wp does not work then pegged SC does not work.  If we are talking about pegged sidechains then 2wp MUST be working.

or maybe you want to talk about "pegged SC are not possible to create ?" => let's talk about why it is not possible to create functional 2wp SC

SC does not have any value -> until BTC are locked(escrowed) to fund this SC
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November 17, 2014, 07:56:44 PM
 #17264

Of course none of the elemental properties of gold were changed to create gold "side chains" and that is why we should go the federated route with bitcoin.

i think this is where we agree; if we are going to use SC's at all.  of course, there's always OT as well.
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November 17, 2014, 08:00:23 PM
 #17265


I think, that value is always stored in MC. You can only put your bitcoins into "escrow" (lock them in main-chain) and use "value" on side-chain.


Shouldn't you then believe that the severing of 2-way peg would result in a scBTC value of zero in all cases?  I think I've convincingly shown that this would not always be the case.  Therefore, a % of the value must actually be stored on the sidechain's ledger.  

If 2wp does not work then pegged SC does not work.  If we are talking about pegged sidechains then 2wp MUST be working.

or maybe you want to talk about "pegged SC are not possible to create ?" => let's talk about why it is not possible to create functional 2wp SC

SC does not have any value -> until BTC are locked(escrowed) to fund this SC

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.
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November 17, 2014, 08:01:04 PM
 #17266

Of course none of the elemental properties of gold were changed to create gold "side chains" and that is why we should go the federated route with bitcoin.

i think this is where we agree; if we are going to use SC's at all.  of course, there's always OT as well.

Yes.  If it ain't broke, don't fix it.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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November 17, 2014, 08:03:23 PM
 #17267


I think, that value is always stored in MC. You can only put your bitcoins into "escrow" (lock them in main-chain) and use "value" on side-chain.


Shouldn't you then believe that the severing of 2-way peg would result in a scBTC value of zero in all cases?  I think I've convincingly shown that this would not always be the case.  Therefore, a % of the value must actually be stored on the sidechain's ledger.  

Sidechains introduce a huge marginal value-add by providing services which people need and cannot achieve on the main chain.  My seat-of-the-pants estimate is that this will easily account for any increase in value associated with scBTC on an ecosystem level and some of the value will probably back-wash into Bitcoin itself in a big way.



who needs the MC to achieve all these services?  to me, Bitoin is Money and only money.  all these services can be created and just adopt BTC as their currency unit of exchange.  this would be how to drive the price of BTC much higher.
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November 17, 2014, 08:03:57 PM
 #17268

Of course none of the elemental properties of gold were changed to create gold "side chains" and that is why we should go the federated route with bitcoin.

i think this is where we agree; if we are going to use SC's at all.  of course, there's always OT as well.

Yes.  If it ain't broke, don't fix it.

Bingo!  we have a Winner!
sidhujag
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November 17, 2014, 08:06:48 PM
 #17269

Haven't heard anyone talk about it but on here.. so I don't consider that strong. A simple gui was needed from grandma that couldn't be done in 3 years of trying? Is that strong software development to you?
That you don't understand the problem domain is more a reflection on you than on OT.

Don't know how you jump to that conclusion but sure... it must be SOOO complicated that it takes longer to do especially since my premise is probably playing out that there is no financial incentive to do so other than the gigantic bounty that noone will be paying out.

I've got 10+ years of professional software development under my belt so I highly doubt you know what you are talking about.
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November 17, 2014, 08:07:34 PM
 #17270


Sidechains introduce a huge marginal value-add by providing services which people need and cannot achieve on the main chain.  My seat-of-the-pants estimate is that this will easily account for any increase in value associated with scBTC on an ecosystem level and some of the value will probably back-wash into Bitcoin itself in a big way.


I agree that sidechains could introduce a "value-add by providing services which people need and cannot achieve on the main chain" and that this could increase demand to hold BTC.  

What I'm not convinced of is whether the value-add is "huge" or not, and whether providing support for SPV sidechains at the protocol level is worth the existential risk it creates.  

Let's see what happens with federated sidechains first...  

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tvbcof
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November 17, 2014, 08:10:04 PM
 #17271


how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

Note that Bitcoin itself could be supported with one CPU miner provided that it is not attacked.

As I've mentioned before, trying to out-run the threat of potential mining attack is as futile as a hamster running on a wheel.  Successful sidechains will almost certainly need to evolve other protection modes than simplistic gross sha256 hashing power.  The best hope for Bitcoin to mitigate the inevitable reality that mining becomes unprofitable is that sidechains offer money-making opportunities for miners which are more lucrative than attacking Bitcoin itself.


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November 17, 2014, 08:11:24 PM
 #17272

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

:-) maybe you can re-read this thread (last 300 pages)

 -  (hint) ... we can use oracles. => useful oracle is TIMESTAMP server => it is possible to use Bitcoin as TIMESTAMP server .. (counterparty uses already)

 - there are more solutions what does not require MM

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November 17, 2014, 08:18:42 PM
 #17273

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

:-) maybe you can re-read this thread (last 300 pages)

 -  (hint) ... we can use oracles. => useful oracle is TIMESTAMP server => it is possible to use Bitcoin as TIMESTAMP server .. (counterparty uses already)

 - there are more solutions what does not require MM



lol, you don't think i've talked already about federated servers about 100x now?
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November 17, 2014, 08:20:49 PM
 #17274


how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

Note that Bitcoin itself could be supported with one CPU miner provided that it is not attacked.

As I've mentioned before, trying to out-run the threat of potential mining attack is as futile as a hamster running on a wheel.  Successful sidechains will almost certainly need to evolve other protection modes than simplistic gross sha256 hashing power.  The best hope for Bitcoin to mitigate the inevitable reality that mining becomes unprofitable is that sidechains offer money-making opportunities for miners which are more lucrative than attacking Bitcoin itself.



wow, i didn't think our view of mining diverged so greatly.  POW is the only solution, imo, and we've certainly seen no evidence that any entity is willing to take the gamble to attack Bitcoin.

if we don't screw it up, we can expect tx volumes and fees to continuing setting new highs, just like we're seeing now which will replace block rewards.

but we need outsiders to buy BTC.
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November 17, 2014, 08:23:57 PM
 #17275

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?"  

blah blah blah

Wow, you can describe all that in one line:  The price change will be proportional to the flow derivative.  

In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise.  If BTC is moving out of the sidechain the price will fall.

If you are still confused think about modelling it.  You would best model this by creating "value" as an immaterial quantity.  Each chain HAS a value (essentially a market cap, which is price * quantity), based on its usefulness.  If 2 chains are pegged, changes to the value cannot be expressed in price, so quantity must change -- that is BTC is transmuted from one chain to another.  If 2 chains are not pegged, changes to the value cannot be expressed by moving quantity so price must change.  This idea is fundamental; it applies to all commodities and products where you can transform one to another.



the whole point that Peter R is trying to make is that with SC's, value gets "shared" btwn MC and all SC's.  with the potential of being "severed" or "fragmented".  

we don't want that with Bitcoin.  we want it ALL on the mainchain.  we want all outsiders to be forced to "buy in" to BTC for their seat at the table.

who here wants to share value with Truthcoin?



Cypherdoc your reasoning is completely flawed.  First of all, I know that you aren't an engineer, but you still you should be able to understand  that it CANT be ALL on the mainchain.  There are diametrically opposed requirements.  Like anonymity vs. public spending accountability.  Like handling vast numbers of txns per second vs. keeping all transactions forever.  Like blockchain spam vs. document timestamping.  There are plenty of things with diametrically opposed requirements in life, like sleeping (darkness) and reading a book (bright light); its unrealistic to imagine no 2 applications will emerge in a space which covers the entire concept of economic activity.

Why have all prior altcoins failed?  Simply because they're all essentially the same.  Different POW?  Come on, what end user cares?  Bitcoin 2.0 (assets)?  Colored coins is good enough, but the market is not mature enough for anyone to care right now.  

You may argue that there will never emerge a use case that is both compelling and that Bitcoin cannot handle.  Ok in that case there will be no sidechains, because Metcalf's law, etc and so the functionality will simply sit unused, and eventually be deprecated.  There is no drawback to this.

But if a use case DOES emerge, the only way to pull that value into Bitcoin is via sidechains -- because with a sidechain the Bitcoin 21million scarcity token can be applied to that use case.

You need to contemplate what you cannot contemplate, not make decisions only based on what you know.

So the ONLY way to get "all outsiders to be forced to "buy in" to BTC for their seat at the table" is via sidechains.
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November 17, 2014, 08:24:31 PM
 #17276

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

:-) maybe you can re-read this thread (last 300 pages)

 -  (hint) ... we can use oracles. => useful oracle is TIMESTAMP server => it is possible to use Bitcoin as TIMESTAMP server .. (counterparty uses already)

 - there are more solutions what does not require MM



lol, you don't think i've talked already about federated servers about 100x now?

Is TIMESTAMP server(Bitcoin) the federated server ? (hint => NOT)
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November 17, 2014, 08:35:11 PM
 #17277

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

:-) maybe you can re-read this thread (last 300 pages)

 -  (hint) ... we can use oracles. => useful oracle is TIMESTAMP server => it is possible to use Bitcoin as TIMESTAMP server .. (counterparty uses already)

 - there are more solutions what does not require MM



lol, you don't think i've talked already about federated servers about 100x now?

Is TIMESTAMP server(Bitcoin) the federated server ? (hint => NOT)

Maybe you wish to send me 2 BTC and I will TIMESTAMP forever on bitcoin-main-chain that "cypherdoc is ... " :-)  DONOR.
cypherdoc
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November 17, 2014, 08:35:23 PM
 #17278

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?"  

blah blah blah

Wow, you can describe all that in one line:  The price change will be proportional to the flow derivative.  

In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise.  If BTC is moving out of the sidechain the price will fall.

If you are still confused think about modelling it.  You would best model this by creating "value" as an immaterial quantity.  Each chain HAS a value (essentially a market cap, which is price * quantity), based on its usefulness.  If 2 chains are pegged, changes to the value cannot be expressed in price, so quantity must change -- that is BTC is transmuted from one chain to another.  If 2 chains are not pegged, changes to the value cannot be expressed by moving quantity so price must change.  This idea is fundamental; it applies to all commodities and products where you can transform one to another.



the whole point that Peter R is trying to make is that with SC's, value gets "shared" btwn MC and all SC's.  with the potential of being "severed" or "fragmented".  

we don't want that with Bitcoin.  we want it ALL on the mainchain.  we want all outsiders to be forced to "buy in" to BTC for their seat at the table.

who here wants to share value with Truthcoin?



Cypherdoc your reasoning is completely flawed.  First of all, I know that you aren't an engineer, but you still you should be able to understand  that it CANT be ALL on the mainchain.  There are diametrically opposed requirements.  Like anonymity vs. public spending accountability.  Like handling vast numbers of txns per second vs. keeping all transactions forever.  Like blockchain spam vs. document timestamping.  There are plenty of things with diametrically opposed requirements in life, like sleeping (darkness) and reading a book (bright light); its unrealistic to imagine no 2 applications will emerge in a space which covers the entire concept of economic activity.

Why have all prior altcoins failed?  Simply because they're all essentially the same.  Different POW?  Come on, what end user cares?  Bitcoin 2.0 (assets)?  Colored coins is good enough, but the market is not mature enough for anyone to care right now.  

You may argue that there will never emerge a use case that is both compelling and that Bitcoin cannot handle.  Ok in that case there will be no sidechains, because Metcalf's law, etc and so the functionality will simply sit unused, and eventually be deprecated.  There is no drawback to this.

But if a use case DOES emerge, the only way to pull that value into Bitcoin is via sidechains -- because with a sidechain the Bitcoin 21million scarcity token can be applied to that use case.

You need to contemplate what you cannot contemplate, not make decisions only based on what you know.

So the ONLY way to get "all outsiders to be forced to "buy in" to BTC for their seat at the table" is via sidechains.


my position is that Bitcoin should only be used as Money.  all other services should simply use Bitcoin as money.  Bitcoin should not have to build in any other services.

is that consistent with your model?  it doesn't sound like it.
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November 17, 2014, 08:42:59 PM
 #17279

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

blah blah blah

Wow, you can describe all that in one line:  The price change will be proportional to the flow derivative.  

In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise.  If BTC is moving out of the sidechain the price will fall.


What you said above doesn't give any value to convertibility.  Like NewLiberty said, the value for scBTC is:

   value = convertibility + utility/network effect.

If you permanently break the peg (convertibility), the value of scBTC will immediately drop (at least in Cases 1 and 2), regardless of the direction of the flow.  

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November 17, 2014, 08:47:38 PM
 #17280

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

blah blah blah

Wow, you can describe all that in one line:  The price change will be proportional to the flow derivative.  

In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise.  If BTC is moving out of the sidechain the price will fall.


What you said above doesn't give any value to convertibility.  Like NewLiberty said, the value for scBTC is:

   value = convertibility + utility/network effect.

If you permanently break the peg (convertibility), the value of scBTC will immediately drop (at least in Cases 1 and 2), regardless of the direction of the flow.  


I feel convertibility (2wp works) same as if you did not break ECDSA then convertibility works. (sorry, I'm not natural speaker)
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