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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?
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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1953707 times)
JorgeStolfi
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December 30, 2014, 01:34:31 PM
 #19121

Side chains are probably unicorns . I say probably because I haven't seen the proof of concept demonstrated nor have a real world analogy. It seems like vaporware.

Time will tell I suppose.

Fwiw 2wpeg sidechains could be implemented now, without any changes to the btc protocol...

I understand that the two-way peg ensures that no extra bitcoins can be created on the main chain by going through a side chain.  But will the Bitcoin Network ensure that no extra SideCoins are generated on the side chain, before they are brought back?  That is, can one implement MtGOX on a sidechain?

EDIT: I see that someone partially answered this question above.

The peg, that is, the exchange rate between the mainchain and the sidechain can be deterministic and one could create a inflationary sidechain but the network will not allow more coins to return to the mainchain than what got out.

In other words, the Bitcoin protocol will not ensure that the SideCoins are pegged to the bitcoins that were transferred.  The SideCoin protocol can do with SideCoins anything its designers choose to do.  Correct?

Will it be possible to create SideCoins after transferring 0 BTC to the sidechain? Or just 1 satoshi?

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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cbeast
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December 30, 2014, 01:40:55 PM
 #19122

Who actually pegs the transaction? With many different versions of the blockchain, how do you reach  consensus without an actual bitcoin transaction?

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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December 30, 2014, 01:51:12 PM
 #19123

Side chains are probably unicorns . I say probably because I haven't seen the proof of concept demonstrated nor have a real world analogy. It seems like vaporware.

Time will tell I suppose.

Fwiw 2wpeg sidechains could be implemented now, without any changes to the btc protocol...
Let's see a two way peg with test bitcoins and test litecoins at an arbitrary peg. Has anyone created an atomic swap between chains without human intervention?

No such a thing is in place, that I'm aware of.

Having said that, what I meant with "implemented" was the federeted servers with mutlisig scheme. Afaik atomic swaps concept is orthogonal to the way the sidechain is built, it even applies to alt chains. Dunno what you meant with "w/o human intervention" though. Scripted?

In any case I'm very eager to see a first "actual" sidechains (if any).

Bitcoin is a participatory system which ought to respect the right of self determinism of all of its users - Gregory Maxwell.
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December 30, 2014, 02:12:06 PM
 #19124

Side chains are probably unicorns . I say probably because I haven't seen the proof of concept demonstrated nor have a real world analogy. It seems like vaporware.

Time will tell I suppose.

Fwiw 2wpeg sidechains could be implemented now, without any changes to the btc protocol...

I understand that the two-way peg ensures that no extra bitcoins can be created on the main chain by going through a side chain.  But will the Bitcoin Network ensure that no extra SideCoins are generated on the side chain, before they are brought back?  That is, can one implement MtGOX on a sidechain?

EDIT: I see that someone partially answered this question above.

The peg, that is, the exchange rate between the mainchain and the sidechain can be deterministic and one could create a inflationary sidechain but the network will not allow more coins to return to the mainchain than what got out.

In other words, the Bitcoin protocol will not ensure that the SideCoins are pegged to the bitcoins that were transferred.  The SideCoin protocol can do with SideCoins anything its designers choose to do.  Correct?

Will it be possible to create SideCoins after transferring 0 BTC to the sidechain? Or just 1 satoshi?

The peg rate is a function of the sidechain's and is hard coded into the protocol. The sidecoin protocol can decide on whatever rate of exchange (peg) he desires.

Yes, inflationary sidechains can be created

"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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December 30, 2014, 02:19:23 PM
 #19125

Who actually pegs the transaction? With many different versions of the blockchain, how do you reach  consensus without an actual bitcoin transaction?

It seems you haven't gotten much far in your own research of the technology.

I will quote Konrad Graf here :

Quote
A sidechain peg to bitcoin is a technical peg, not a price peg

About consensus of chains and how the "peg" work, see here :

http://blockstream.com/sidechains.pdf
http://gendal.me/2014/10/26/a-simple-explanation-of-bitcoin-sidechains/

"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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December 30, 2014, 02:26:11 PM
 #19126

Thought cypherdoc might like this article by Daniel Krawisz

http://bitcoinist.net/the-two-ideologies-in-bitcoin/

I am sort of imagining it as what underlies his arguments that he doesnt like sidechains.

If you make a  commitment to stick around and address all my concerns instead of lobbing in a comment every hundred pages or so then maybe I'll take the effort to repeat everything I've already said.  

I read a few dozen pages some weeks back, so I think I got a fair flavour of the substantive arguments mixed in now and then.  Others seemed to be doing an excellent job of injecting logic and signal so I left it at that.

But I am not convinced you are trying to be persuaded, maybe more enjoying the protracted heated discussion Wink

Adam

ps it only takes a second to trim quotes - the thread'd easier to read if you also would trim!

hashcash, committed transactions, homomorphic values, blind kdf; researching decentralization, scalability and fungibility/anonymity
cypherdoc
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December 30, 2014, 03:37:44 PM
 #19127

Thought cypherdoc might like this article by Daniel Krawisz

http://bitcoinist.net/the-two-ideologies-in-bitcoin/

I am sort of imagining it as what underlies his arguments that he doesnt like sidechains.

If you make a  commitment to stick around and address all my concerns instead of lobbing in a comment every hundred pages or so then maybe I'll take the effort to repeat everything I've already said.  

I read a few dozen pages some weeks back, so I think I got a fair flavour of the substantive arguments mixed in now and then.  Others seemed to be doing an excellent job of injecting logic and signal so I left it at that.

But I am not convinced you are trying to be persuaded, maybe more enjoying the protracted heated discussion Wink

Adam

ps it only takes a second to trim quotes - the thread'd easier to read if you also would trim!

Instead of dismissing my arguments by framing them as having some sort of agenda, perhaps you'd care to address the myriad issues I, and others btw, have voiced in this thread.

The pages have accumulated precisely because I have not thrown out simple, short ad hominems or logical dismissives as you have described. I've done most of the talking.

I may be wrong about SC's but one thing I hope is that people here are convinced  of my sincerity on the issue. I have a real concern about the philosophical direction you're trying to take Bitcoin in and the highly risky economic effects it may have.
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December 30, 2014, 03:43:09 PM
 #19128

Quote
Pierce Brock: "Bitcoin might fail but the blockchain is here to stay".
https://www.youtube.com/watch?v=jbu6I-8mNUo&feature=youtu.be&t=17m5s
https://twitter.com/Pierre_Rochard/status/549923662552645632?lang=fr

and that just came out of The Bitcoin Foundation board member..

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December 30, 2014, 04:00:20 PM
 #19129

http://metastablecapital.com/thoughts-on-sidechains/
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December 30, 2014, 04:10:10 PM
 #19130


I think what might happen is that pegs will have to be really "cheap" in order to compensate for the risk of the sidechain. Then, if the sidechain works and its utility rises, it'll pull up demand for bitcoin quickly as the underpricing becomes apparent.

It would not surprise me at all to see sidechains cause an increase in demand for Bitcoin.  In addition to the obvious targeted utility value, they also have a very significant potential to harden the solution against some of the most severe of the current soft-points.  Many of these chinks in the armor have been long recognized by the more competent of analyists as being of the variety which would appear only when (and if) Bitcoin achieved a modicum of success.  And it's starting to.

It is interesting that in the early days 'bitcointalk.org' (which used to be just a forum of 'bitcoin.org' when I got interested) was one of the best sources for quality information and analysis.  Now it is a higher percentage of rather closed-minded (and/or compromised self-interested troll-like creatures) seem to inhabit the hallowed halls.  Even the despicable mainstream press offers a higher percentage of cogent and informed economic analysis.  Oh well.


Of course, that's in the simple 1:fixedX peg scenario.

We still find people talking about a 1:1 as though it had any meaning.  It means as much as the '21 million'.  That is, zip.  When anyone mentions that I know I am reading the writings of a retard or disengenuious propagandist.  Glad (and not surprised) that you were at least not lazy enough to substitued 'fixedX' for '1'.


What scares me with sidechains is still the "any deterministic function" blockchain-introspection aspect of it. Back to the example of a peg func that says: "peg is 1:1000 until sidechain block N, then 1:0". Then you just have an alt-coin that was boostrapped off bitcoin, and any future increase in demand for the alt cannot flow back to bitcoin.

Any thinking person will have the same reaction.  It's a free market, though, and if one is 'scared' then they have perfect freedom to avoid the risk.  I'm sure I'll initially defer on this risk and stick with a static peg implementation at least for a while.  If/when I have use for a floating peg implementation of some sort I'll have not qualms about putting some value there since philosophically I have nothing in particular against such a thing as long as the transparency necessary to understand it exists.  Economically it is no more 'inflationary' to the Bitcoin foundation than a fixed implementation due to the peg (in spite of what the more loud and ignorant of the voices here might proclaim) though it offers an avenue for individuals who are not clued in and paying attention to be separated from their wealth.

As always, I'll keep the crypto-currency fraction of my nest-egg in native Bitcoin*.  Sidechains will be what I use day-in and day-out for solving various real-world exchange problems.

(*) Actually, this may turn out to be untrue.  If Bitcoin goes the way of exponential growth as Gavin seems to prefer I will consider it a solution which is severely limited in many ways and which contains the seeds of its own demise coded in.  At that point I'll be looking for a more robust solution which is most likely to take it's place, and for good opportunities to shift my holdings over.


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December 30, 2014, 04:24:03 PM
 #19131

Very interesting:

https://www.bullionstar.com/blog/koos-jansen/the-netherlands-planned-to-introduce-new-currency-in-2012/
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December 30, 2014, 05:54:01 PM
 #19132

If nothing else for those who view bitcoin as gold2.0 (and I do myself)
What exactly do you mean by "gold2.0"

If by that you're talking about some kind of rarely-moving thing that acts as a store of value without being a medium of exchange, then what you want is impossible and trying to make it happen will destroy Bitcoin.
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December 30, 2014, 05:55:23 PM
 #19133

Quote
Pierce Brock: "Bitcoin might fail but the blockchain is here to stay".
https://www.youtube.com/watch?v=jbu6I-8mNUo&feature=youtu.be&t=17m5s
https://twitter.com/Pierre_Rochard/status/549923662552645632?lang=fr

and that just came out of The Bitcoin Foundation board member..



Brock Pierce is a complete disgrace to the Bitcoin Foundation and for Bitcoin in general.  Sorry, but by default a Bitcoin Foundation board member who publically opens his/her mouth should be a shill for Bitcoin and only Bitcoin, nothing else.  The Foundation is simply retarded for not seeing that Brock is not helping the cause, but instead hurting it... especially pushing alt coins that are a joke (An altcoin pegged to the dollar?  Really?)
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December 30, 2014, 06:16:35 PM
 #19134

Quote
Pierce Brock: "Bitcoin might fail but the blockchain is here to stay".
https://www.youtube.com/watch?v=jbu6I-8mNUo&feature=youtu.be&t=17m5s
https://twitter.com/Pierre_Rochard/status/549923662552645632?lang=fr

and that just came out of The Bitcoin Foundation board member..



Brock Pierce is a complete disgrace to the Bitcoin Foundation and for Bitcoin in general.  Sorry, but by default a Bitcoin Foundation board member who publically opens his/her mouth should be a shill for Bitcoin and only Bitcoin, nothing else.  The Foundation is simply retarded for not seeing that Brock is not helping the cause, but instead hurting it... especially pushing alt coins that are a joke (An altcoin pegged to the dollar?  Really?)

couldn't have said it better.

similarly, the Blockstream argument that advocates separating the BTC unit from its secure blockchain so as to "liberate" its value while "unleashing" it from its "restrictions" is also misguided.
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December 30, 2014, 06:24:02 PM
 #19135

If nothing else for those who view bitcoin as gold2.0 (and I do myself)
What exactly do you mean by "gold2.0"

If by that you're talking about some kind of rarely-moving thing that acts as a store of value without being a medium of exchange, then what you want is impossible and trying to make it happen will destroy Bitcoin.

i think Adam's goals are laudable, ie, wanting to expand the universe of assets traded for Bitcoin.

i just think it's premature and is taking the wrong path.  first, let Bitcoin establish itself as a global reserve currency, as it is currently doing. then, when the market cap is much larger and outsiders have been forced to buy in, natural market forces will force those assets to be denominated and traded in terms of Bitcoin.  this path is highly focused and doesn't require anything more than upgrading Bitcoin on the mainchain, as we just saw with 0.10.0rc1 core and with what Gavin is proposing with IBLT and block size expansion.

of course, this requires more hands off, patience, and developmental discipline which, by my observation, is quite rare in the community. 
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December 30, 2014, 06:39:47 PM
 #19136

i think Adam's goals are laudable, ie, wanting to expand the universe of assets traded for Bitcoin.
The problem I've always seen with the "gold 2.0" viewpoint is that it relies on a bad understanding of history and a worse understanding of economics.

Some people think that gold is an example of a free-market store of value that was not also a medium of exchange, but it's not true.

During the era where gold was held as a reserve asset and people started exchanging gold-backed notes instead of the gold itself, the sole reason that arrangement worked is because central banks hoarded gold, and their activities were subsidized by the taxing capability of the state.

The idea that it's possible to separate a store of value from its medium of exchange function is an illusion that can only be propped up with a substantial expenditure of institutional violence.

The last thing I want to see is Bitcoin turned into a system that can only survive under those conditions.

If that's Blockstream's plan...
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December 30, 2014, 06:56:13 PM
 #19137

i think Adam's goals are laudable, ie, wanting to expand the universe of assets traded for Bitcoin.
The problem I've always seen with the "gold 2.0" viewpoint is that it relies on a bad understanding of history and a worse understanding of economics.

Some people think that gold is an example of a free-market store of value that was not also a medium of exchange, but it's not true.

During the era where gold was held as a reserve asset and people started exchanging gold-backed notes instead of the gold itself, the sole reason that arrangement worked is because central banks hoarded gold, and their activities were subsidized by the taxing capability of the state.

The idea that it's possible to separate a store of value from its medium of exchange function is an illusion that can only be propped up with a substantial expenditure of institutional violence.

The last thing I want to see is Bitcoin turned into a system that can only survive under those conditions.

If that's Blockstream's plan...

If I'm reading you correctly, then I agree. It's ludicrous to think you can separate a BTC unit from its blockchain and think it can maintain its value as "fuel" for other asset trading. The blockchain by itself cannot act as "backing" for those units.
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December 30, 2014, 08:37:33 PM
 #19138

Extraordinary. $0.03 per GB.  There will be no blockchain storage problems:

http://www.zdnet.com/article/seagate-offers-low-cost-8tb-hard-drives/
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December 30, 2014, 09:38:04 PM
 #19139

If I'm reading you correctly, then I agree. It's ludicrous to think you can separate a BTC unit from its blockchain and think it can maintain its value as "fuel" for other asset trading. The blockchain by itself cannot act as "backing" for those units.
The best way to summarize what I am saying is: if we want Bitcoin to function as a store of value, then we have to use it as a medium of exchange.
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December 30, 2014, 09:59:44 PM
 #19140

i think Adam's goals are laudable, ie, wanting to expand the universe of assets traded for Bitcoin.
The problem I've always seen with the "gold 2.0" viewpoint is that it relies on a bad understanding of history and a worse understanding of economics.

Some people think that gold is an example of a free-market store of value that was not also a medium of exchange, but it's not true.

During the era where gold was held as a reserve asset and people started exchanging gold-backed notes instead of the gold itself, the sole reason that arrangement worked is because central banks hoarded gold, and their activities were subsidized by the taxing capability of the state.

The idea that it's possible to separate a store of value from its medium of exchange function is an illusion that can only be propped up with a substantial expenditure of institutional violence.

The last thing I want to see is Bitcoin turned into a system that can only survive under those conditions.

If that's Blockstream's plan...

I don't get how this is somehow not a problem replicated but solved by sidechains.

Why did gold-backed notes appear in the first place? Was it not because of market demand for a more liquid, transactional medium of exchange? Of course this was playing into the hands of banks but gold was not rid of its medium of exchange function so much as people found its natural properties in that regard to be inconvenient and cumbersome.

I see the same thing happening now. Replace papernotes with sidechains and central bank for the Bitcoin protocol.

In certain ways Bitcoin will function very well as a medium of exchange but the nature of its protocol also results some shortcomings with respect to its utility functions and flexibility as an asset class.

What better, more natural, way to address this than sidechains? Unlike the gold/papernotes parallel there is considerably smaller counterparty risk; the "backing" mechanism is enforced on the protocol level. 

Institutional violence is replaced by maths.

"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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