Gold collapsing. Bitcoin UP.

[dariuss]

how come bitcoin is staying at $400 and not rising?

[brg444]

you're missing the overall pt.  it doesn't matter what the feature is that gives the SC an advantage.  first off, the advantage could be gained b/c the Blockstream core devs have preferentially worked on that feature for the SC as opposed to the main chain.  then if that SC takes off, as JR said, they might block that feature from being incorporated into the main chain.  the problem is that there are too many of them working under the same roof.  the scenario where that might happen is if that SC has its own altcoin that they've invested in that's riding along with the transferred BTC.

anything i say has bias as i'm invested in Bitcoin just like most everyone else around here.  the difference being, that i'm not the one recommending changes. i invested under one set of assumptions and imo, this changes things potentially.

Everything they are developing is open source. They cannot block implementation of anything. It seems disingenuous to me, considering some of the answers given in the AMA, to suggest the BTC main core devs would implicitly hurt Bitcoin's development in favor of Blockstream's business. Additionally, any indication of unethical behavior by them could certainly lead to them losing their position as BTC main core developer.

They have specifically stated in the AMA they will NOT create their own altcoin or currency.

Also, your concern of financial incentives corrupting their actions is misguided. Do not forget that ALL of them have vested interest into Bitcoin already. They stand to make considerably more money creating sensible SC features that improve the Bitcoin economy.

[brg444]

What happens if one of these side chain alts becomes very successful (for example is supported by the banking system) and begins to draw a large number of bitcoins in circulation into lockdown. Will bitcoin value suddenly evaporate as all the coins sublime into the new chain in a mad rush? One can imagine some amazing pump and dump opportunities for clever side chain developers to acquire an awful lot of bitcoins through this 'two way peg' mechanism. (Early adopters again wahey!) Or to actually kill bitcoin with if a superior chain emerges.

Any successful SC will benefit the Bitcoin economy and therefore it makes no sense to suggest banking system would get behind a SC in particular.

As for the bolded statement, this is true of any alt chain, sidechain or not. I don't see how sidechains would effectively assist and benefit pump & dump opportunities. A fool and his money are soon parted, no matter the way.

[cypherdoc]

you're missing the overall pt.  it doesn't matter what the feature is that gives the SC an advantage.  first off, the advantage could be gained b/c the Blockstream core devs have preferentially worked on that feature for the SC as opposed to the main chain.  then if that SC takes off, as JR said, they might block that feature from being incorporated into the main chain.  the problem is that there are too many of them working under the same roof.  the scenario where that might happen is if that SC has its own altcoin that they've invested in that's riding along with the transferred BTC.

anything i say has bias as i'm invested in Bitcoin just like most everyone else around here.  the difference being, that i'm not the one recommending changes. i invested under one set of assumptions and imo, this changes things potentially.

Everything they are developing is open source. They cannot block implementation of anything. It seems disingenuous to me, considering some of the answers given in the AMA, to suggest the BTC main core devs would implicitly hurt Bitcoin's development in favor of Blockstream's business. Additionally, any indication of unethical behavior by them could certainly lead to them losing their position as BTC main core developer.

They have specifically stated in the AMA they will NOT create their own altcoin or currency.

Also, your concern of financial incentives corrupting their actions is misguided. Do not forget that ALL of them have vested interest into Bitcoin already. They stand to make considerably more money creating sensible SC features that improve the Bitcoin economy.

look, i don't know how old you are, but what we're talking about here is A LOT of money.  the whole ethos of Bitcoin is as a trustless currency.  that currency depends on it's source code.  any changes to that code can change the economic assumptions and those correctly positioned can make LOTS.  to have core devs under the employment of a for-profit company is ridiculous.  it doesn't make any difference that they've behaved up to this point.  look what happened in 2008 in the GFC.  tremendous amounts of trust were lost in were supposed to be institutions to protect our form of capitalism.  didn't work out when the shit hit the fan did it?  are you willing to risk the entire Bitcoin system to have 5 devs who commit to the Bitcoin source while employed by Austin Hill, a hedge fund guy?

[cypherdoc]

As for the bolded statement, this is true of any alt chain, sidechain or not. I don't see how sidechains would effectively assist and benefit pump & dump opportunities. A fool and his money are soon parted, no matter the way.

it could even accelerate the sidescams since it will now be so easy to slide BTC over to that SC.  plus, this concept has the blessing of core devs, whom you so trust, right?

[inca]

What happens if one of these side chain alts becomes very successful (for example is supported by the banking system) and begins to draw a large number of bitcoins in circulation into lockdown.

many of us will have a bad time running around gathering up cold storage wallets to transfer to the new SC.  possible privacy leaks galore, not to mention risk.

That is the point really - unnecessary risk to bitcoin, to implement 2.0 features. We should be just improving bitcoin instead. The real reason for this idea is the same reason as for everything. Profit for the side chain developers.

Has anyone a convincing argument why side chains are positive for bitcoin, rather than cryptocurrency in general? I think there is a danger we actually all collectively write the prophecy that a bitcoin 2.0 blockchain will come along and emerge in the coming years to dethrone bitcoin. It would be ironic if it was initially backed by bitcoin then destroyed it's creator like frankenstein.

I'm in hurry now but if you have a few minutes to spare just skim through episode 77 and/or 99 of "let's talk bitcoin". Somewhere Adam Back describe an hypothetical scenario where a side chains is used to migrate between from one btc version to another.

Thanks..will do.

[thezerg]

What happens if one of these side chain alts becomes very successful (for example is supported by the banking system) and begins to draw a large number of bitcoins in circulation into lockdown.

many of us will have a bad time running around gathering up cold storage wallets to transfer to the new SC.  possible privacy leaks galore, not to mention risk.

lol, SideChain is backed by bitcoin.  SideChain is protocol. SideChain is only temporary.  The only way sidechain can outperform Bitcoin is when Bitcoin security is broken and SC's is not.

That's right.  To state it clearly, there will be an arbitrage opportunity.  Buy BTC, transfer into SC, sell SCBTC, buy BTC.  So the price of bitcoin will be lifted with the added value sidechains bring.  In this sense inca, the child chain can never "destroy" Bitcoin even if it ends up carrying 99.9% of the transactions.

To address Cypherdoc and other people's "what if" questions about the future, "we" (as in the Bitcoin evangelizing crowd) have been selling bitcoin as the "TCP" (or "HTTP") of finance -- anything can be layered on it.  That is the "promise" of Bitcoin as a world currency.  But you can't really layer applications on top of it like you can TCP or HTTP, except in a very small 40 byte per txn area, and in the awkward colored coin concept.  Sure, you can make an independent app that happens to accept payment in Bitcoin, like a centralized storefront.  But that is hardly layered "on" the Bitcoin protocol.

Sidechains IS the technology that really lets us build anything "on" Bitcoin.  Because the value of Bitcoin is NOT in the code -- otherwise running on testnet and/or altcoins would be much more valuable.  The real value programmers want is having a digital, supply limited (etc etc) token with programmable behavior that HAS VALUE from day one.  (But right now Bitcoin does not really have "programmable behavior" -- all you can to is transfer it)

If sidechains don't happen I will still be invested in Bitcoin as a diversification especially given the indebtedness of important governments throughout the world.  However, I would revise my "end game" estimate downwards by 3-4 orders of magnitude (1000-10000x), esp. if the block size is also not increased.  I would expect, best case, Bitcoin to become crypto-"gold".  Held but rarely used.  Worst case, some highly functional altcoin takes over and BTC's value dwindles to 0.

[brg444]

look, i don't know how old you are, but what we're talking about here is A LOT of money.  the whole ethos of Bitcoin is as a trustless currency.  that currency depends on it's source code.  any changes to that code can change the economic assumptions and those correctly positioned can make LOTS.  to have core devs under the employment of a for-profit company is ridiculous.  it doesn't make any difference that they've behaved up to this point.  look what happened in 2008 in the GFC.  tremendous amounts of trust were lost in were supposed to be institutions to protect our form of capitalism.  didn't work out when the shit hit the fan did it?  are you willing to risk the entire Bitcoin system to have 5 devs who commit to the Bitcoin source while employed by Austin Hill, a hedge fund guy?

how is it ridiculous if the for-profit company in question works to IMPROVE the Bitcoin technology and has EVERY incentive to do so in a legitimate community approved way?

comparison to 2008 is asinine. Bitcoin development is an open source process.

I repeat, these 5 devs have every incentive to work in a transparent and community focused manner. You are suggesting they will go rogue and commit damaging code to the Bitcoin main core and that the community, the miners, and everyone running a node will play along? This is tinfoil hat status AFAIC.

Attacking Austin Hill personally just because you dislike the guy isn't helping your cause either? I know some people who, contrary to you, have worked with Austin personally and can certainly vouch for him. It appears a great deal of industry people do so as well so right now, it seems to me you're alone in your corner, with Peter Todd maybe, trying to pin bad intentions to a person with nothing but words to back up your claims.

[brg444]

As for the bolded statement, this is true of any alt chain, sidechain or not. I don't see how sidechains would effectively assist and benefit pump & dump opportunities. A fool and his money are soon parted, no matter the way.

it could even accelerate the sidescams since it will now be so easy to slide BTC over to that SC.  plus, this concept has the blessing of core devs, whom you so trust, right?

Nonsense

First, it is already easy as it is to convert BTC into any other coin. Altcoin exchanges are readily available and require know KYC/AML hurdle to jump through to register.

Second, these devs are not responsible for the possibility that someone create "sidescams" and fool naive people into moving their BTC to this chain.

What you are saying is akin to suggesting Satoshi is to be held accountable for creating the concept allowing for scamcoins to thrive.

[thezerg]

you're missing the overall pt.  it doesn't matter what the feature is that gives the SC an advantage.  first off, the advantage could be gained b/c the Blockstream core devs have preferentially worked on that feature for the SC as opposed to the main chain.  then if that SC takes off, as JR said, they might block that feature from being incorporated into the main chain.  the problem is that there are too many of them working under the same roof.  the scenario where that might happen is if that SC has its own altcoin that they've invested in that's riding along with the transferred BTC.

anything i say has bias as i'm invested in Bitcoin just like most everyone else around here.  the difference being, that i'm not the one recommending changes. i invested under one set of assumptions and imo, this changes things potentially.

Everything they are developing is open source. They cannot block implementation of anything. It seems disingenuous to me, considering some of the answers given in the AMA, to suggest the BTC main core devs would implicitly hurt Bitcoin's development in favor of Blockstream's business. Additionally, any indication of unethical behavior by them could certainly lead to them losing their position as BTC main core developer.

They have specifically stated in the AMA they will NOT create their own altcoin or currency.

Also, your concern of financial incentives corrupting their actions is misguided. Do not forget that ALL of them have vested interest into Bitcoin already. They stand to make considerably more money creating sensible SC features that improve the Bitcoin economy.

look, i don't know how old you are, but what we're talking about here is A LOT of money.  the whole ethos of Bitcoin is as a trustless currency.  that currency depends on it's source code.  any changes to that code can change the economic assumptions and those correctly positioned can make LOTS.  to have core devs under the employment of a for-profit company is ridiculous.  it doesn't make any difference that they've behaved up to this point.  look what happened in 2008 in the GFC.  tremendous amounts of trust were lost in were supposed to be institutions to protect our form of capitalism.  didn't work out when the shit hit the fan did it?  are you willing to risk the entire Bitcoin system to have 5 devs who commit to the Bitcoin source while employed by Austin Hill, a hedge fund guy?

Ok so some people should hire one or two of them away from Blockstream.  What's ridiculous is that large holders expect these people to work for free -- AND that there are so few core developers.

Don't fight to squelch proposed technological innovation just because you are afraid of the human political/legal/social organization that coalesced to implement it.  Keep in mind that this idea was proposed long before this organization existed...

[lebing]

Why is this a problem if the code is all open source?

actually, this is very true.  for all my ranting, in the end, i think they fail spectacularly.  i could be wrong.

but given Bitcoin's future price projections due to its fixed supply and liquidity as a new form of money, why on earth would anyone move BTC to a high risk, low security Sidechain?

Besides true anonymity or stupidity, we dont know because we arent psychic. But the point is that this development addresses future unknowns in a really amazing way.

[justusranvier]

Do not spin my words around.

Giving the benefit of the doubt to well respected members of the community is NOT blind trust. It is called exactly that, respect.

It is perfectly fine to consider what COULD go wrong. It is another thing to imply conspiration to damage Bitcoin when there is NO signs and incentives of doing so.

If we're not going to spin words around, then please start by not spinning mine.

I observed a potential problem, and I give a set of conditions which would reduce or eliminate my concerns:

https://www.reddit.com/r/IAmA/comments/2k3u97/we_are_bitcoin_sidechain_paper_authors_adam_back/clhp60y?context=3

Note that I haven't heard anyone say that the conditions I put forward are unreasonable.

This isn't "implying conspiracy."

[brg444]

This isn't "implying conspiracy."

 

touché, sorry my english is a little rough sometimes  

[inca]

That's right.  To state it clearly, there will be an arbitrage opportunity.  Buy BTC, transfer into SC, sell SCBTC, buy BTC.  So the price of bitcoin will be lifted with the added value sidechains bring.  In this sense inca, the child chain can never "destroy" Bitcoin even if it ends up carrying 99.9% of the transactions.

Markets and their capitalizations are a funny thing. They are illusory. We talk about bitcoin's current cap as being the price of a single coin multiplied by all the coins in existence. But the reality is far from that as the price is manipulated from, say, 1166 to 350 by a fraction of a few % of the coins in existence, or relatively modest amounts of fiat currency (millions to tens of millions of dollars only) on the way up.

This concept of a 'two way peg' between bitcoin blockchain and side chain is really an exchange. The terms of how many SCBTC can be acquired/released by locking/unlocking actual BTC are flexible and could float, for example based upon fiat exchange value of SCBTC or BTC. If SCBTC use becomes prevalent then it is possible that as the value of BTC falls, SCBTC rises, until BTC is not a store of value.

What you say (emboldened) is probably accurate. But what we care about is bitcoin maintaining value, as it's algorithmic scarcity was designed to do. That is the reason we hold it!

[lebing]

I don't doubt that side chains offer some exciting possibilities. But I am still not sure this is the right thing for bitcoin. Perhaps this if implemented into bitcoin core it will herald the end of the alt's in the future and a proliferation of side chains offering discrete services, all fully or partially backed by bitcoin.

I am not against the idea overall. But these new chains are really just alt coins initially backed to some degree by bitcoin. Perhaps that is the leverage the bitcoin 2.0 coins need to succeed in correcting some of the (perceived or real) deficiencies in bitcoin right now. Perhaps we need a static reliable bitcoin blockchain to act as a store of value, in essence like a digital gold reservoir which backs future alt digital currencies. However I suspect this is likely to be wishful thinking. I say alt currencies because these alt chains will not run on the bitcoin chain or protocol, but will simply be linked to it by this 'two way peg' system. If the last five years has shown anything, it is that 'there can be only one' is true really with bitcoin market cap being gigantic and all the rest of the alts being a tiny afterthought.

With each alt side chain presumably there will be an IPO type event where a portion of btc coins go into a black hole of being 'locked'. This will dwindle available supply of btc and instead of being sold off on exchange (ethereum) and depressing the price could actually support it. If lots of popular side chains exist the actual use of bitcoin could become reduced or even minimal. What will keep bitcoin from losing it's value? Nothing I suspect.

What happens if one of these side chain alts becomes very successful (for example is supported by the banking system) and begins to draw a large number of bitcoins in circulation into lockdown. Will bitcoin value suddenly evaporate as all the coins sublime into the new chain in a mad rush? One can imagine some amazing pump and dump opportunities for clever side chain developers to acquire an awful lot of bitcoins through this 'two way peg' mechanism. (Early adopters again wahey!) Or to actually kill bitcoin with if a superior chain emerges.

What happens when a side chain is insecure and is 51%'d if decentralised or is simply hacked if centralised. It isn't hard to imagine a massive gox style disaster with hundreds of thousands of coins getting stolen or lost?

Interesting times.

As scarcity increases, so does the price.... Mtgox was an exchange... that has nothing to do with a protocol and its security. You should rethink a bit of what you just said here.

[msin]

Worst case, some highly functional altcoin takes over and BTC's value dwindles to 0.

BTC's network value is almost too large to fail at this point.  There is so much investment in BTC that if it fails, all crypto will fail with it.  What I would like to see from Sidechains is the ability to 2-way peg current alts to block chain.  I think Blockstream should employ someone who's sole purpose is to help Alt's peg to BTC via Sidechain.  Imagine having the functionality of Alt's tied to BTC blockchain.  Anyway, I'm very excited about Sidechains.

[inca]

As scarcity increases, so does the price.... Mtgox was an exchange... that has nothing to do with a protocol and its security. You should rethink a bit of what you just said here.

I agree scarcity drives price when demand exists. It is why I speculatively hold bitcoin right now. What will drive the demand for bitcoin if everyone moves to a bitcoin 2.0 chain?

[Odalv]

That's right.  To state it clearly, there will be an arbitrage opportunity.  Buy BTC, transfer into SC, sell SCBTC, buy BTC.  So the price of bitcoin will be lifted with the added value sidechains bring.  In this sense inca, the child chain can never "destroy" Bitcoin even if it ends up carrying 99.9% of the transactions.

Markets and their capitalizations are a funny thing. They are illusory. We talk about bitcoin's current cap as being the price of a single coin multiplied by all the coins in existence. But the reality is far from that as the price is manipulated from, say, 1166 to 350 by a fraction of a few % of the coins in existence, or relatively modest amounts of fiat currency (millions to tens of millions of dollars only) on the way up.

This concept of a 'two way peg' between bitcoin blockchain and side chain is really an exchange. The terms of how many SCBTC can be acquired/released by locking/unlocking actual BTC are flexible and could float, for example based upon fiat exchange value of SCBTC or BTC. If SCBTC use becomes prevalent then it is possible that as the value of BTC falls, SCBTC rises, until BTC is not a store of value.

What you say (emboldened) is probably accurate. But what we care about is bitcoin maintaining value, as it's algorithmic scarcity was designed to do. That is the reason we hold it!

I'm sure 99% SCs will use 1:1 conversion rate and no new SCBTC will be generated ... you will still have your bitcoins, but few will be locked in "fast transfer" sidechain  ... you will have some locked in "exchage" sidechain ... and some in your private business sidechains (not public sidechains)

[cypherdoc]

look, i don't know how old you are, but what we're talking about here is A LOT of money.  the whole ethos of Bitcoin is as a trustless currency.  that currency depends on it's source code.  any changes to that code can change the economic assumptions and those correctly positioned can make LOTS.  to have core devs under the employment of a for-profit company is ridiculous.  it doesn't make any difference that they've behaved up to this point.  look what happened in 2008 in the GFC.  tremendous amounts of trust were lost in were supposed to be institutions to protect our form of capitalism.  didn't work out when the shit hit the fan did it?  are you willing to risk the entire Bitcoin system to have 5 devs who commit to the Bitcoin source while employed by Austin Hill, a hedge fund guy?

how is it ridiculous if the for-profit company in question works to IMPROVE the Bitcoin technology and has EVERY incentive to do so in a legitimate community approved way?

there is the potential to implement things that will benefit the company.  why can't you see this?  we should avoid if at all possible compromising situations.  5 devs under one roof is not the answer, imo.  if they were split up individually, then fine.

comparison to 2008 is asinine. Bitcoin development is an open source process.

I repeat, these 5 devs have every incentive to work in a transparent and community focused manner. You are suggesting they will go rogue and commit damaging code to the Bitcoin main core and that the community, the miners, and everyone running a node will play along? This is tinfoil hat status AFAIC.

how can you assure that they won't?  simply b/c they haven't?  that's naive.

Attacking Austin Hill personally just because you dislike the guy isn't helping your cause either? I know some people who, contrary to you, have worked with Austin personally and can certainly vouch for him. It appears a great deal of industry people do so as well so right now, it seems to me you're alone in your corner, with Peter Todd maybe, trying to pin bad intentions to a person with nothing but words to back up your claims.

you're putting words in my mouth.  i never said i don't like Hill. 

the fact that Hill and Back did miss early adoption of Bitcoin needs to be considered.  they probably don't have much in the way of BTC.  this could change all that for them so i don't blame them for taking this shot if they can get ppl like you to buy in.

[cypherdoc]

What's ridiculous is that large holders expect these people to work for free -- AND that there are so few core developers.

i don't.  but spread their employment around if possible.