Gold collapsing. Bitcoin UP.

[brg444]

I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins,

A simpler version of this is described in the paper. Simply pay miners in a new altcoin that is distinct and can't be used to unlock Bitcoins at all. But still tradeable and valuable if has demand and scarcity.

You then have the benefit of two different types of coins on the same chain and can do atomic cross-coin trades easily without the need for slower and more complicated cross-chain trades.

Anyone who thinks this won't spawn a new explosion of altcoins is delusional.

it might, the argument is : why do you need to create a new currency to support your altchain? what is your motive? can you not use BTC as a 1:1 peg?

it is an handicap for alt scammers

[1714899549]

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[Odalv]

But if some implementation of SC (I do not think SC as idea) become scam or there is a bug then bitcoins may be lost.

Bitcoin may take a knock if 10% of the coins go missing. But that would actually simply increase the value of everyone else's holdings.

Yes, I agree.  There is no need/reason to HOLD bitcoins in sidechains if you do not use advantages of SC.

SideChain always use/observe original blockchain b/c  mainchain gives it value.  SC must preserve value of original mainchain b/c mainchain keeps that value.

[smooth]

I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins,

A simpler version of this is described in the paper. Simply pay miners in a new altcoin that is distinct and can't be used to unlock Bitcoins at all. But still tradeable and valuable if has demand and scarcity.

You then have the benefit of two different types of coins on the same chain and can do atomic cross-coin trades easily without the need for slower and more complicated cross-chain trades.

Anyone who thinks this won't spawn a new explosion of altcoins is delusional.

it might, the argument is : why do you need to create a new currency to support your altchain? what is your motive? can you not use BTC as a 1:1 peg?

it is an handicap for alt scammers

You can't pay for mining with BTC. That alone is a reason. In fact that's the original reason BTC exists at all. From the point of view of a sidechain, BTC is an external currency. If you could use BTC to secure a sidechain, you can use USD to secure a standalone blockchain. You can't.

Other people will probably want to do proof-of-stake (used for most new altcoins today, I think) or other things with different monetary properties. That also can't be done BTC, because you can't stake BTC into existence on the side chain.

Finally there are people who will simply not want to be associated with BTC for reasons of branding, marketing, distinctiveness, dislike or suspicion of BTC, etc. They won't use BTC backing simply because they can, at least not in a straight 1:1 form.

The question "Why do you need to create a new currency?" exposes a bias. From a neutral perspective, one might just as easily ask "Why should I use BTC or BTC backing as my currency?" If you set aside the bias, there is no technical necessity to use BTC or exclusively BTC on a side chain.

These may all sound dumb to you, and perhaps they all are, but they can and will be done anyway.

[brg444]

You can't pay for mining with BTC.

Not sure I understand this part... If you do a straight 1:1 peg you don't need mining of the sidechain right? The movement of assets between that chain is basically fit into transactions that goes into BTC blocks is it not?

As for the rest, they're free to do whatever they want, but I find I have every reason to have a BTC bias.

[Melbustus]

...
Other people will probably want to do proof-of-stake (used for most new altcoins today, I think) or other things with different monetary properties. That also can't be done BTC, because you can't stake BTC into existence on the side chain.
...

And that's probably going to be the most popular answer to: "Why aren't you just using a sidechain? Why do you need your own new currency?"

[Odalv]

I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins,

A simpler version of this is described in the paper. Simply pay miners in a new altcoin that is distinct and can't be used to unlock Bitcoins at all. But still tradeable and valuable if has demand and scarcity.

You then have the benefit of two different types of coins on the same chain and can do atomic cross-coin trades easily without the need for slower and more complicated cross-chain trades.

Anyone who thinks this won't spawn a new explosion of altcoins is delusional.

it might, the argument is : why do you need to create a new currency to support your altchain? what is your motive? can you not use BTC as a 1:1 peg?

it is an handicap for alt scammers

You can't pay for mining with BTC. That alone is a reason. In fact that's the original reason BTC exists at all. From the point of view of a sidechain, BTC is an external currency. If you could use BTC to secure a sidechain, you can use USD to secure a standalone blockchain. You can't.

Other people will probably want to do proof-of-stake (used for most new altcoins today, I think) or other things with different monetary properties. That also can't be done BTC, because you can't stake BTC into existence on the side chain.

Finally there are people who will simply not want to be associated with BTC for reasons of branding, marketing, distinctiveness, dislike or suspicion of BTC, etc. They won't use BTC backing simply because they can, at least not in a straight 1:1 form.

The question "Why do you need to create a new currency?" exposes a bias. From a neutral perspective, one might just as easily ask "Why should I use BTC or BTC backing as my currency?" If you set aside the bias, there is no technical necessity to use BTC or exclusively BTC on a side chain.

These may all sounds dumb to you, and perhaps they all are, but they can and will be done anyway.

Yes, you can create as many ScamSC as you want. Everybody has to ask yourself few question.
 - will I able to withdraw as many bitcoin as I want to send ? (probably yes, if no new scam coin are created) ?
 - is there some new utility I want to use ? (what is the utility of new sidechain ... is it pump/dump ?)
 - is not my chance to win scLotto by sending money there better ?

[Melbustus]

...
The question "Why do you need to create a new currency?" exposes a bias. From a neutral perspective, one might just as easily ask "Why should I use BTC or BTC backing as my currency?" If you set aside the bias, there is no technical necessity to use BTC or exclusively BTC on a side chain.
...

If the bias is that we want crypto-currency to be capable of being a long-term store of value, then yes, that question exposes a bias.

As I've said before, if an alt ever started to threaten bitcoin's market-cap dominance, it would severely risk undermining bitcoin's scarcity argument, therefore drastically reducing people's willingness to hold crypto-currency for any longer than they need in order to use it as a payment network or what have you. Clearly there's still be some value (potentially large, given enough usage), but it'd be a lot less, at least near/medium-term, than if people want to hold it as a long-term store of value or inflation-hedge type asset.

There's some flexibility in that depiction, of course, but I think that's the "bias" being exposed when people promote bitcoin over alts.

[cypherdoc]

You can't pay for mining with BTC.

Not sure I understand this part... If you do a straight 1:1 peg you don't need mining of the sidechain right? The movement of assets between that chain is basically fit into transactions that goes into BTC blocks is it not?

As for the rest, they're free to do whatever they want, but I find I have every reason to have a BTC bias.

wtf? Your lucky I'm on planes and on my android otherwise id rip you apart. And you're the resident shill?

Of course the sc needs mining. In fact, initially it would be merge mining if its lucky. There's been plenty discussion and skepticism this will even occur due to the insecurities.

[cypherdoc]

Who here has interpreted the SC paper to mean that you can get your BTC back from scBTC in the case of a SC failure?

I don't interpret it that way.

Before you can get your BTC back, you've got to perform burn transaction on the sidechain.

So if the sidechain ceases to function entirely, you have no way to generate the SPV proof that lets you claim your BTC.

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

Atomic swaps allow transfer to happen without waiting on the peg... a result of this means that a single 2wp transfer can basically exit all the people at once.

It does effectively mean that a sidechain abandoned by miners may end up costing more in transaction fees to exit than you'd like. The situation is much brighter than being left with altcoins no one wants, and also ignores the possible (likely?) existance of altruistic miners that continue to mine along just because.

But if some implementation of SC (I do not think SC as idea) become scam or there is a bug then bitcoins may be lost.

So in your opinion, does this mean everyone can get their BTC back in the event of a SC failure with just a larger tx fee?

[smooth]

As I've said before, if an alt ever started to threaten bitcoin's market-cap dominance, it would severely risk undermining bitcoin's scarcity argument, therefore drastically reducing people's willingness to hold crypto-currency for any longer than they need in order to use it as a payment network or what have you. Clearly there's still be some value (potentially large, given enough usage), but it'd be a lot less, at least near/medium-term, than if people want to hold it as a long-term store of value or inflation-hedge type asset.

There's some flexibility in that depiction, of course, but I think that's the "bias" being exposed when people promote bitcoin over alts.

I don't really think there is anything wrong with that theory. I don't entirely subscribe to it, but I respect people who do. As this is all new, the actual conclusion is unknown.

The difference is that when the conclusion is assumed (as is the case when asking "Why do you need ...") rather than stated as a theory, it becomes a bias.

[rpietila]

As I've said before, if an alt ever started to threaten bitcoin's market-cap dominance, it would severely risk undermining bitcoin's scarcity argument, therefore drastically reducing people's willingness to hold crypto-currency for any longer than they need in order to use it as a payment network or what have you. Clearly there's still be some value (potentially large, given enough usage), but it'd be a lot less, at least near/medium-term, than if people want to hold it as a long-term store of value or inflation-hedge type asset.

I also wished for years that alts would just die already. They did not. It seems not likely that they will go away, rather they will bubble and some reach a medium market cap, before waning into obscurity. And always hundreds of shitcoins will try to reach the place in the moon. The total market cap of alts vs. BTC is the metric to be followed. BTC is "safe" as long as it is 10-20% or so, of BTC's market cap.

Creating altcoins is just so easy. Ingame item CKG's (created 2 weeks ago) "fully mined" marketcap is BTC483, with which it actually beats NeXT Horizon and Boolberry('s emitted marketcap). CKG is not crypto though, but could easily be.

[cypherdoc]

I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins,

A simpler version of this is described in the paper. Simply pay miners in a new altcoin that is distinct and can't be used to unlock Bitcoins at all. But still tradeable and valuable if has demand and scarcity.

You then have the benefit of two different types of coins on the same chain and can do atomic cross-coin trades easily without the need for slower and more complicated cross-chain trades.

Anyone who thinks this won't spawn a new explosion of altcoins is delusional.

yep

[Odalv]

Who here has interpreted the SC paper to mean that you can get your BTC back from scBTC in the case of a SC failure?

I don't interpret it that way.

Before you can get your BTC back, you've got to perform burn transaction on the sidechain.

So if the sidechain ceases to function entirely, you have no way to generate the SPV proof that lets you claim your BTC.

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

Atomic swaps allow transfer to happen without waiting on the peg... a result of this means that a single 2wp transfer can basically exit all the people at once.

It does effectively mean that a sidechain abandoned by miners may end up costing more in transaction fees to exit than you'd like. The situation is much brighter than being left with altcoins no one wants, and also ignores the possible (likely?) existance of altruistic miners that continue to mine along just because.

But if some implementation of SC (I do not think SC as idea) become scam or there is a bug then bitcoins may be lost.

So in your opinion, does this mean everyone can get their BTC back in the event of a SC failure with just a larger tx fee?

It is very complex to answer.

SideChain can be created in many ways (but obviously you do want to accept this fact)
SideChain(IDEA) is "concept?" what describes your Bitcoin transaction off the main chain (transaction are not recorded in bitcoin blockchain).
One example of sidechain is bitcoin-exchange (one of them is Bitstamp). Bitstamp exists, and Bitstamp creates off-chain bitcoin transaction.(buys/sells bitcoins)

In term of SideChain(IDEA) it is centralized and ONE ENTITY controlled sidechain. -> It exists now.
 - you can lock your bitcoins in bitstamp controlled address and trade
 - Bitstamp is only miner who creates blockchain (history of trades) . Bitstamp mine transactions -> (who sold/bought, add-to-order-book, market-buy/sell, ... and so on) and Bitstamp publish orderbook.
 - and only Bitstamp can unlock your bitcoin (bitstampBTC)

Bitstamp is two-way-peg SC with 1:1 exchange rate and  ONE ENTITY controlled sidechain

==
Blockstream paper describes how to create different SideChain
 - one of them is Federated peg (M of N entities controlled sidechain) -> it can be created without changes to bitcoin protocol now.
 - I think, it is better than centralized one

==
and finally few variants how to create decentralized (not supported by bitcoin now)

==
this decentralized SC can be even combined with (M of N SC's) or (Single Entity SC) in case there is not enough mining power


=> The questions is  IF/HOW add decentralized SC's.

[brg444]

You can't pay for mining with BTC.

Not sure I understand this part... If you do a straight 1:1 peg you don't need mining of the sidechain right? The movement of assets between that chain is basically fit into transactions that goes into BTC blocks is it not?

As for the rest, they're free to do whatever they want, but I find I have every reason to have a BTC bias.

wtf? Your lucky I'm on planes and on my android otherwise id rip you apart. And you're the resident shill?

Of course the sc needs mining. In fact, initially it would be merge mining if its lucky. There's been plenty discussion and skepticism this will even occur due to the insecurities.

yeah that was an embarassing quote   didn't come out the way I would've liked. of course I understand the SC needs to be mined but I got confused by smooth comment..

moving on...

I'm all fine with having arguments with you and respect your opinion but can we stop with the name calling? I'm no shill for everyone here and I've got no agenda.

I'm sorry if you felt disrespected by some of my comments, I don't know if that's the case, but I'm only questioning the motives of your scepticism. You do bring some good points but others are such a stretch of the imagination I'm having trouble understanding where you're coming from.

[brg444]

I don't really think there is anything wrong with that theory. I don't entirely subscribe to it, but I respect people who do. As this is all new, the actual conclusion is unknown.

The difference is that when the conclusion is assumed (as is the case when asking "Why do you need ...") rather than stated as a theory, it becomes a bias.

No. Asking is leaving the argument open for an acceptable answer. I never said "You don't need"

[cypherdoc]

Who here has interpreted the SC paper to mean that you can get your BTC back from scBTC in the case of a SC failure?

I don't interpret it that way.

Before you can get your BTC back, you've got to perform burn transaction on the sidechain.

So if the sidechain ceases to function entirely, you have no way to generate the SPV proof that lets you claim your BTC.

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

Atomic swaps allow transfer to happen without waiting on the peg... a result of this means that a single 2wp transfer can basically exit all the people at once.

It does effectively mean that a sidechain abandoned by miners may end up costing more in transaction fees to exit than you'd like. The situation is much brighter than being left with altcoins no one wants, and also ignores the possible (likely?) existance of altruistic miners that continue to mine along just because.

But if some implementation of SC (I do not think SC as idea) become scam or there is a bug then bitcoins may be lost.

So in your opinion, does this mean everyone can get their BTC back in the event of a SC failure with just a larger tx fee?

It is very complex to answer.

SideChain can be created in many ways (but obviously you do want to accept this fact)
SideChain(IDEA) is "concept?" what describes your Bitcoin transaction off the main chain (transaction are not recorded in bitcoin blockchain).
One example of sidechain is bitcoin-exchange (one of them is Bitstamp). Bitstamp exists, and Bitstamp creates off-chain bitcoin transaction.(buys/sells bitcoins)

In term of SideChain(IDEA) it is centralized and ONE ENTITY controlled sidechain. -> It exists now.
 - you can lock your bitcoins in bitstamp controlled address and trade
 - Bitstamp is only miner who creates blockchain (history of trades) . Bitstamp mine transactions -> (who sold/bought, add-to-order-book, market-buy/sell, ... and so on) and Bitstamp publish orderbook.
 - and only Bitstamp can unlock your bitcoin (bitstampBTC)

Bitstamp is two-way-peg SC with 1:1 exchange rate and  ONE ENTITY controlled sidechain

==
Blockstream paper describes how to create different SideChain
 - one of them is Federated peg (M of N entities controlled sidechain) -> it can be created without changes to bitcoin protocol now.
 - I think, it is better than centralized one

==
and finally few variants how to create decentralized (not supported by bitcoin now)

==
this decentralized SC can be even combined with (M of N SC's) or (Single Entity SC) in case there is not enough mining power


=> The questions is  IF/HOW add decentralized SC's.

you didn't answer my question.

From what Maxwell said, it sounds like he said he would be able to get everyone's BTC unlocked in case of a failure of SC.

[smooth]

acceptable answer.

That's the whole point. You are assuming an "acceptable" answer is required. It isn't.

For many the answer will simply be "because that's what we want."

Many of the DOGE community want nothing to do with BTC and being a BTC side chain would be a negative to them, not a positive.

It has nothing to do with features or "need." They don't need to justify themselves to you or anyone else. It is more about identity and distinctiveness, and that has demonstrated a lot of importance in the market with the #2 and #3 coins (when I exclude Ripple and BSTX) being LTC, which have no significant feature differentiation with BTC, and DOGE, which has only a small monetary differentiation (perpetual maintenance reward).

I'm not in this group, but I recognize it for what it is.

[Odalv]

Who here has interpreted the SC paper to mean that you can get your BTC back from scBTC in the case of a SC failure?

I don't interpret it that way.

Before you can get your BTC back, you've got to perform burn transaction on the sidechain.

So if the sidechain ceases to function entirely, you have no way to generate the SPV proof that lets you claim your BTC.

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

Atomic swaps allow transfer to happen without waiting on the peg... a result of this means that a single 2wp transfer can basically exit all the people at once.

It does effectively mean that a sidechain abandoned by miners may end up costing more in transaction fees to exit than you'd like. The situation is much brighter than being left with altcoins no one wants, and also ignores the possible (likely?) existance of altruistic miners that continue to mine along just because.

But if some implementation of SC (I do not think SC as idea) become scam or there is a bug then bitcoins may be lost.

So in your opinion, does this mean everyone can get their BTC back in the event of a SC failure with just a larger tx fee?

It is very complex to answer.

SideChain can be created in many ways (but obviously you do want to accept this fact)
SideChain(IDEA) is "concept?" what describes your Bitcoin transaction off the main chain (transaction are not recorded in bitcoin blockchain).
One example of sidechain is bitcoin-exchange (one of them is Bitstamp). Bitstamp exists, and Bitstamp creates off-chain bitcoin transaction.(buys/sells bitcoins)

In term of SideChain(IDEA) it is centralized and ONE ENTITY controlled sidechain. -> It exists now.
 - you can lock your bitcoins in bitstamp controlled address and trade
 - Bitstamp is only miner who creates blockchain (history of trades) . Bitstamp mine transactions -> (who sold/bought, add-to-order-book, market-buy/sell, ... and so on) and Bitstamp publish orderbook.
 - and only Bitstamp can unlock your bitcoin (bitstampBTC)

Bitstamp is two-way-peg SC with 1:1 exchange rate and  ONE ENTITY controlled sidechain

==
Blockstream paper describes how to create different SideChain
 - one of them is Federated peg (M of N entities controlled sidechain) -> it can be created without changes to bitcoin protocol now.
 - I think, it is better than centralized one

==
and finally few variants how to create decentralized (not supported by bitcoin now)

==
this decentralized SC can be even combined with (M of N SC's) or (Single Entity SC) in case there is not enough mining power


=> The questions is  IF/HOW add decentralized SC's.

you didn't answer my question.

From what Maxwell said, it sounds like he said he would be able to get everyone's BTC unlocked in case of a failure of SC.

lol, Maxwell  cannot unlock  everyone's BTC from Bitstamp nor MtGox (I though, it is obvious)

Edit:

Maxwell brings new ideas how to prevent Karpeles from stealing your bitcoins

Edit2:

How to convert Central authority sidechain(MtGox-exchange) into decentralized (or at least M of N authorities) sidechain.

[smooth]

I just had a thought. If you wanted to have a sidechain that itself used proof of work mining (peg a PoW altchain to Bitcoin), how could it really work? The miners would have to get paid, and they surely can't be paid in bitcoins so they would get newly issued altcoins. But those particular altcoins would not be convertible to bitcoins,

A simpler version of this is described in the paper. Simply pay miners in a new altcoin that is distinct and can't be used to unlock Bitcoins at all. But still tradeable and valuable if has demand and scarcity.

You then have the benefit of two different types of coins on the same chain and can do atomic cross-coin trades easily without the need for slower and more complicated cross-chain trades.

Anyone who thinks this won't spawn a new explosion of altcoins is delusional.

yep

In fact, just thinking out loud here, you could create demand (and therefore value) for such a coin by requiring payment of a fee in SideCoin to perform the transaction that will unlock real BTC. Such a transaction could burn the fee, increasing scarcity and value, which incentivizes more mining making the side chain more secure.

There are just so many combinations of crazy ideas, some blatant scams and pozni schemes, some less obviously so.

This "altcoin killing" technology will create more altcoins than ever.

[brg444]

That's the whole point. You are assuming an "acceptable" answer is required. It isn't.

For many the answer will simply be "because that's what we want."

Many of the DOGE community want nothing to do with BTC and being a BTC side chain would be a negative to them, not a positive.

It has nothing to do with features or "need." They don't need to justify themselves to you or anyone else. It is more about identity and distinctiveness, and that has demonstrated a lot of importance in the market with the #2 and #3 coins (when I exclude Ripple and BSTX) being LTC, which have no significant feature differentiation with BTC, and DOGE, which has only a small monetary differentiation (perpetual maintenance reward).

I'm not in this group, but I recognize it for what it is.

Sure, let the loonies have fun with their memecoin. The reason I'm expecting an "acceptable" or reasonable answer is to consider whether there is a prospect for innovation with that new coin.

I'm sorry but "identity and distinctiveness" is a recipe for disaster. It's all fun and games until people realize their assets are better invested elsewhere. I'll be honest I can't quite understand what it is these people think they have got going with their dogecoins but surely once the novelty and cool factor wears off they'll be looking for a way out.