Gold collapsing. Bitcoin UP.

[thezerg]

where is the AMA?  wasn't it supposed to start 12 min ago?

http://www.reddit.com/r/IAmA/comments/2k3u97/we_are_bitcoin_sidechain_paper_authors_adam_back/

[Odalv]

Just like everything else in this world from used cars to altcoins you can get scammed.  One "sidescam" does not mean sidechains are a bad idea.

The classic example of a valuable sidechain is one that allows native support for other securities, bonds, backed commodities, including atomic anonymous decentralized exchange.  This can be done more efficiently than overlay coins.

You could imagine geographically isolated sidechains that take alleviate the scalability issues with Bitcoin.

You could imagine a chain that orders potential transactions on an average of a 5 second window, potentially in a pseudo-centralized manner.  For example, the entity that found the prior block gets to order potential transactions until the next block is found.  This could solve the zero-confirmation problem.

You could imagine something supporting decentralized data storage, or any other collective enterprise from DACs to web forums.  Demurrage pays your monthly membership fees (which pay the developers of the system), but you can buy and sell data storage out of this account so if you offer enough storage into the system your monthly fees are paid and you even make money.

You could imagine "inverting" the bitcoin database so the UTXO set is what is mined, and the blockchain is the history of UTXOs.  This and other features could make a blockchain that is much lighter-weight for non-miners.  The advantage here is that hardware wallets could be made smaller, for less money and more functionality put on the wallet vs the POS.

I think that services that use microtransactions haven't appeared yet because it is a totally new concept, because it is inconvenient with bitcoin, and because they are accused of being blockchain spam.  But, I think we will start seeing them on the bitcoin ledger because altcoins are failing and because the SEC may start looking at appcoins (or at least pre-sales of them) as a security.  Then the blockchain will truly go exponential and you guys will get to experience the fruits of your labor to marginalize these technologies.

yes and much more :-)

- private sidechains
- sidechain what lives only 1 working day(any duation) - no need to store full transaction history because bitcoins are transfered back to main chain

[justusranvier]

We can't even agree to raise the block size limit -- a limitation that, if unchanged will either dramatically limit Bitcoin's applicability, or will cause such high txn fees that a worldwide Bitcoin will be limited to high value transactions.  Either case opens up all kinds of avenues for traditional finances, fiat currencies, etc.  And the only downside is that the home user MAY not be able to run a full node.

Sidechains contribute to this inability to reach agreement.

They just change the argument from "we don't need to raise the limit because altcoins" to "we don't need to raise the limit because sidechains."

I mean come on... If I was a tinfoil hat wearing type, I'd really begin to suspect some of you guys.

If I was a tinfoil hat wearing type, I'd link to documents that show accusing people of being "conspiracy theorist" is a common disruption tactic employed by intelligence agents.

[cypherdoc]

If you really believe in the potential of digital currencies to take over practically every economic transaction, you'd realize that the Bitcoin protocol CAN'T adopt every feature developed in sidechains because some will be conflicting (fast vs slow block times for example).

i don't believe that Bitcoin is suitable to take over all those activities.  i see the main problem in today's world to be centered on unlimited money for the few.  Bitcoin solves this and could replace gold as a world reserve currency.  in that sense, it doesn't need tweeking.

I'm glad that a significant portion of the dev community is coalescing behind sidechains and honestly I think that part of why they need a company is because of the impossibility of this community to arrive at consensus as individuals.  

you're ignoring the financial moral hazard involved with them running a for profit.  it will distort more than you think.

We can't even agree to raise the block size limit -- a limitation that, if unchanged will either dramatically limit Bitcoin's applicability, or will cause such high txn fees that a worldwide Bitcoin will be limited to high value transactions.  Either case opens up all kinds of avenues for traditional finances, fiat currencies, etc.  And the only downside is that the home user MAY not be able to run a full node.  

if Bitcoin becomes a Bitcoin Standard, it will force down leverage in the fiat space, which would still benefit mankind greatly.  it's also the easier path of resistance to the existing TPTB.

Well let me break it to you, if Bitcoin is so unsuccessful as to not require greater block size then hobbyists will be gone -- the radical, money revolution that Bitcoin promises will be unfulfilled and these people will be on the the next new thing.  And if Bitcoin is wildly, globally, successful with today's block size a single transaction will be so expensive individuals will own zero coins and so be uninterested in running a full node.

I mean come on... If I was a tinfoil hat wearing type, I'd really begin to suspect some of you guys.

i repeat,  it will force down leverage in the fiat space,

[justusranvier]

So far, no good answers to the question of mismatched incentives:

https://twitter.com/JustusRanvier/status/525323754709458944

[tripppn]

I think butcoin and gold will follow similar trends.  When the stock market falls off a cliff like I'm sure it will before too long watch gold and BTC explode.

[domob]

I like the Conformal model.

They make money from Coinvoice, and btcd is the Bitcoin implementation they use to run their business. They eat their own dogfood, and donate the code into the community, but don't make money from other people using btcd.

I wish more companies would develop alternate implementations using this model.

Also Kraken, they do libcoin.  It's basically a somewhat refactored Satoshi client, though, not a complete rewrite.

[justusranvier]

I like the Conformal model.

They make money from Coinvoice, and btcd is the Bitcoin implementation they use to run their business. They eat their own dogfood, and donate the code into the community, but don't make money from other people using btcd.

I wish more companies would develop alternate implementations using this model.

Also Kraken, they do libcoin.  It's basically a somewhat refactored Satoshi client, though, not a complete rewrite.

Alternate implementations don't really count unless they are capable of mining, and also used for mining.

btcd meets the first requirement, although AFAIK has not achieved the second (yet).

There are probably many projects which could achieve both goalposts with a bit more development, but have so far been discouraged from trying.

[lebing]

So far, no good answers to the question of mismatched incentives:

https://twitter.com/JustusRanvier/status/525323754709458944

http://www.reddit.com/r/IAmA/comments/2k3u97/we_are_bitcoin_sidechain_paper_authors_adam_back/clhoo7d

We think there is a tremendous business potential in building and supporting infrastructure in this space, some connected to Bitcoin and some not. E.g. by acting as a technology and services provider for other businesses in helping them migrate to a more Bitcoin-like way of doing business.

I got chills reading this. I have been thinking about this idea for awhile but didn't have a clear idea for how to implement. I am so excited to see such a solid team working on this.

[Melbustus]

I liked this response from Greg:

I'd like to see more of that too... Some people in the Bitcoin ecosystem push on ideas like red-listing which I think are very fundamentally anti-bitcoin, and every time that kind of stuff comes up I become ill thinking about all the political work that goes into protecting bitcoin as an autonomous trustless system.
Part of what I want (pegged) sidechains to exist and be successful is so that I can spend less time telling people NO and more time telling them "Good Luck with that", without having to also be telling them to create something that competes with the bitcoin currency.

http://www.reddit.com/r/IAmA/comments/2k3u97/we_are_bitcoin_sidechain_paper_authors_adam_back/clhphi2

[thezerg]

... a lot of good stuff...

You know, when BTC is exploding in adoption I tend to agree with you and see that perhaps BTC will survive in a role almost solely as the world reserve and international value transmission currency.

But when adoption metrics like # wallets, # txns, etc are just barely breaking levels set a year ago, when price is in a persistent downtrend and has supposedly hit the bottom (really this time it really has) several times, when at a guess 99.9% of merchants use a trusted centralized 3rd party payment processor -- no different from paypal or VISA in their ability to freeze your funds... this is when I say it is still very premature to eliminate markets that Bitcoin could optimize or enable.

[notme]

- private sidechains
- sidechain what lives only 1 working day(any duation) - no need to store full transaction history because bitcoins are transfered back to main chain

So essentially, they want to move towards using the bitcoin blockchain as a timestamping service?  You publish block header hashes and bitcoin timestamps them.  If a court ever needs the records, they can prove that they are unaltered.

[justusranvier]

I liked this response from Greg:

I'd like to see more of that too... Some people in the Bitcoin ecosystem push on ideas like red-listing which I think are very fundamentally anti-bitcoin, and every time that kind of stuff comes up I become ill thinking about all the political work that goes into protecting bitcoin as an autonomous trustless system.
Part of what I want (pegged) sidechains to exist and be successful is so that I can spend less time telling people NO and more time telling them "Good Luck with that", without having to also be telling them to create something that competes with the bitcoin currency.

http://www.reddit.com/r/IAmA/comments/2k3u97/we_are_bitcoin_sidechain_paper_authors_adam_back/clhphi2

I also like his responds and Adam Back's.

Now I can consider my original question, "provisionally answered."

[HeliKopterBen]

Bottom line:  Miners will collectively choose whether or not to enforce these changes.  If you don't like it then you can garner enough processing power to influence the change.  I believe bitcoin needs to scale one way or the other.  This is just about as practical as any other solution including TCs and increasing the block size limit.  I will support whatever consensus decision is made.  Thankfully these decisions are made by people who have a vested interest in the system:  miners.

[lebing]

- private sidechains
- sidechain what lives only 1 working day(any duation) - no need to store full transaction history because bitcoins are transfered back to main chain

So essentially, they want to move towards using the bitcoin blockchain as a timestamping service?  You publish block header hashes and bitcoin timestamps them.  If a court ever needs the records, they can prove that they are unaltered.

Thats just one of potentially thousands of use cases, yes.

[brg444]

So far, no good answers to the question of mismatched incentives:

https://twitter.com/JustusRanvier/status/525323754709458944

http://www.reddit.com/r/IAmA/comments/2k3u97/we_are_bitcoin_sidechain_paper_authors_adam_back/clhoo7d

We think there is a tremendous business potential in building and supporting infrastructure in this space, some connected to Bitcoin and some not. E.g. by acting as a technology and services provider for other businesses in helping them migrate to a more Bitcoin-like way of doing business.

I got chills reading this. I have been thinking about this idea for awhile but didn't have a clear idea for how to implement. I am so excited to see such a solid team working on this.

At Coinsummit, Marc Andreesen & Balaji Srinivasan were discussing the idea of creating a Red Hat for Bitcoin, I think Blockstream could achieve this.

[justusranvier]

At Coinsummit, Marc Andreesen & Balaji Srinivasan were discussing the idea of creating a Red Hat for Bitcoin, I think Blockstream could achieve this.

A "Red Hat for Bitcoin" headquartered in the US would be a disaster.

[brg444]

At Coinsummit, Marc Andreesen & Balaji Srinivasan were discussing the idea of creating a Red Hat for Bitcoin, I think Blockstream could achieve this.

A "Red Hat for Bitcoin" headquartered in the US would be a disaster.

FWIW, I think they mention in the AMA they'll be based in SF, Montreal & Malta.

Will be interesting to see where they decided to incorporate and have their headquarter

edit :

actually they confirm here they are incorporated in Canada and Malta, not in the US

http://www.reddit.com/r/IAmA/comments/2k3u97/we_are_bitcoin_sidechain_paper_authors_adam_back/clhocei

[HorseRider]

If the conflict of interest can be addressed clearly, the sidechains will be good for Bitcoin ecosystem and the exchange rate of it. Cryptocurrency like Bitcoin will need its own infrastructure for trading and debt proof and share proof to circumvent the legal restriction from government without trusting too many 3rd exchange service.  The better infrastructure will make Bitcoin more usefully money, which is a better money.

[Melbustus]

Ok, so I get that the exchange rate between any side-chain unit and bitcoin can be "any deterministic function" with the obvious constraint that no more bitcoin can come back to the bitcoin-blockchain than left it in the first place.

Additionally, as I noted above, Greg said:

Part of what I want (pegged) sidechains to exist and be successful is so that I can spend less time telling people NO and more time telling them "Good Luck with that", without having to also be telling them to create something that competes with the bitcoin currency.

But I'm not sure that final clause is always true. What happens if a sidechain is issued with some fixed supply and some fixed exchange rate. Many of the IPO "2.0" coins use this sort of a model, roughly. Then if the side-coin becomes successful, BTC will move over up to the max supply issuance of the new coin. That part *does* boost bitcoin's purchasing power. But after that point, any further success of the side-coin in terms of purchasing power will not boost bitcoin, as far as I can tell. People would want the side-coin, but there's no built-in way to get it via bitcoin anymore, so at this point, it becomes the same as any other alt.

That's indeed only one scenario, but it seems to me that much of what sidechains boil down to is just optionally providing a built-in means of exchange that's not really all that different, economically, than existing alt-coin exchanges? What am I missing?