cbeast
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Let's talk governance, lipstick, and pigs.
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October 30, 2014, 04:32:08 AM |
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The other problem with this new twist to your "base case" is it brings a very concerning security risk. Do not fool yourself. Leaving the BTC main chain for a sidechain securing its own issued asset is NOT a "risk free put"
Logical, you trade risk for benefit. but it's not even a risk once you've determined the SC is stable and not susceptible to a frank bug . and that's b/c of the 2 way peg, ie, a risk free put ripe for exploitation. 1:1 can also include fees and penalties.
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Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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HeliKopterBen
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October 30, 2014, 04:34:45 AM |
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Remember your "new" base case is one where there is now a sidechain block subsidy with issuance of new assets. these are not secured by the proposed merged mining.
Yes they are. These secondary tokens will be an additional reward when SC blocks are mined. These tokens will reside on the same chain as the pegged assets.
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Counterfeit: made in imitation of something else with intent to deceive: merriam-webster
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cypherdoc (OP)
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October 30, 2014, 04:34:50 AM |
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if Blockstream is successful at convincing mining pools to freely merge mining from the beginning, the SC can function securely while cultivating the innovation. once proven stable, if i were a whale, i'd go for the pump knowing i have a risk free put.
Are you confused I'm tired of going in circles with you Remember your "new" base case is one where there is now a sidechain block subsidy with issuance of new assets. these are not secured by the proposed merged mining. The other problem with this new twist to your "base case" is it brings a very concerning security risk. Do not fool yourself. Leaving the BTC main chain for a sidechain securing its own issued asset is NOT a "risk free put" i see what you're saying now. the SC has to mine the sidecoin or the scBTC, not both at the same time? good point. but didn't the paper say that multiple assets could be secured on the same SC at the same time? wtf?
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cypherdoc (OP)
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October 30, 2014, 04:36:00 AM |
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Remember your "new" base case is one where there is now a sidechain block subsidy with issuance of new assets. these are not secured by the proposed merged mining.
Yes they are. These secondary tokens will be an additional reward when SC blocks are mined. These tokens will reside on the same chain as the pegged assets. how does any blockchain do this?
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notme
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October 30, 2014, 04:37:52 AM |
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This thread is awesome now.... I love FUD based in misunderstandings. It is way cooler than global economics and the interplay between gold and bitcoin.
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smooth
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October 30, 2014, 04:38:06 AM |
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now, i for one, think that will be quite disruptive if we have to break out our cold storage wallet everytime a new innovation comes along forcing us to move to a new SC. that will introduce all sorts of security and identity risks, not to mention volatility.
This would only be the case if the old chain utterly fails or such failure is expected (with sufficient confidence to justify the inconvenience you describe), otherwise you have no real incentive to move, since out retain the option to exchange at your convenience. In any case, I'm a little confused by all these scenarios. It seems maybe we should talk about something other than sidechains on this thread? It's getting a bit old. Or maybe not. I've recently seen the claim that risks introduced by the apparent progress toward side chains actually being implemented are behind the BTC price weakness. I don't buy it, but interesting theory. how does any blockchain do this? You can certainly have two or more different types of coins on one chain, side chain or otherwise.
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brg444
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October 30, 2014, 04:44:04 AM |
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if Blockstream is successful at convincing mining pools to freely merge mining from the beginning, the SC can function securely while cultivating the innovation. once proven stable, if i were a whale, i'd go for the pump knowing i have a risk free put.
Are you confused I'm tired of going in circles with you Remember your "new" base case is one where there is now a sidechain block subsidy with issuance of new assets. these are not secured by the proposed merged mining. The other problem with this new twist to your "base case" is it brings a very concerning security risk. Do not fool yourself. Leaving the BTC main chain for a sidechain securing its own issued asset is NOT a "risk free put" i see what you're saying now. the SC has to mine the sidecoin or the scBTC, not both at the same time? good point. but didn't the paper say that multiple assets could be secured on the same SC at the same time? wtf? from the paper Of course, sidechains are able to support their own assets, which they would be responsible for maintaining the scarcity of I think you are right that merge-mining solves this in a way BUT only if the majority of miners decide to mine the coin. They will not unless they have an incentive to do so.
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"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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cypherdoc (OP)
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October 30, 2014, 04:44:22 AM |
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Or maybe not. I've recently seen the claim that risks introduced by the apparent progress toward side chains actually being implemented are behind the BTC price weakness. I don't buy it, but interesting theory.
well, i said that the day the paper came out and the price tanked. i believe it IS related as SC's introduce considerable uncertainty into Bitcoin as in allowing a for profit company composed of several of its core devs make a change in what was supposed to be an open source consensus based source code that shouldn't favor any specific interested group, major contributors or not. how does any blockchain do this? You can certainly have two or more different types of coins on one chain, side chain or otherwise. well there you go.
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cypherdoc (OP)
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October 30, 2014, 04:48:14 AM |
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They will not unless they have an incentive to do so.
you're failing to read my posts. small miners struggling to mine BTC right now mainly at a loss would gladly switch to a SC that is producing cheap sidecoins in the hope of scooping up large #'s of sidecoin w/o competition while hoping for price appreciation if they see the same things you said would result in a price rise of scBTC, that being an increasing #scBTC's appearing on the SC (from the whale pump) along with a rise in the price of those same scBTC from speculative buying on an exchange AND an innovation. remember, the SC is designed to be superior. all i'm talking about is a natural fulfillment of that superiority.
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brg444
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October 30, 2014, 04:50:40 AM |
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(with sufficient confidence to justify the inconvenience you describe)
this is what it comes down to if you ask me. if the innovation and the backing of this new sidecoin is so important the value proposition outweight ALL of the risks involved with such a migration than what the hell let's do it. but remember cypherdoc, you have said it yourself, there are numerous and considerable risks and friction in such a movement
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"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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brg444
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October 30, 2014, 04:53:53 AM |
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They will not unless they have an incentive to do so.
you're failing to read my posts. small miners struggling to mine BTC right now mainly at a loss would gladly switch to a SC that is producing cheap sidecoins in the hope of scooping up large #'s of sidecoin w/o competition while hoping for price appreciation if they see the same things you said would result in a price rise of scBTC, that being an increasing #scBTC's appearing on the SC (from the whale pump) along with a rise in the price of those same scBTC from speculative buying on an exchange AND an innovation. remember, the SC is designed to be superior. I consider another flaw in your argument to be your casual dismissal of the force of arbitrage. You are basically suggesting the network effect of the sidechain would grow faster than arbitrage could keep up with. Considering the ever-present risks of locking your BTC on a sidechain until the majority of the infrastructure jumps boat, I consider this highly improbable
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"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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cypherdoc (OP)
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October 30, 2014, 05:00:32 AM |
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(with sufficient confidence to justify the inconvenience you describe)
this is what it comes down to if you ask me. if the innovation and the backing of this new sidecoin is so important the value proposition outweight ALL of the risks involved with such a migration than what the hell let's do it. but remember cypherdoc, you have said it yourself, there are numerous and considerable risks and friction in such a movement well then, here's a thought argument. let's say those 2 factors balance each other out exactly, ie, half of BTC holders convert BTC to scBTC while the other half stay put and half the miners currently mining BTC switch to primarily mining scBTC. in that case, then i say the Bitcoin MC still loses. which is really the risk i'm trying to identify, that being any damage a SC might inflict on Bitcoin MC. it loses b/c the SC has succeeded in weakening Bitcoin's security by 50% subjecting it to possible 51% attacks and volatility (which will happen if any weakness in Bitcoin itself is detected by the market). as volatility picks up, the price will drop.
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brg444
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October 30, 2014, 05:04:35 AM |
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well then, here's a thought argument.
let's say those 2 factors balance each other out exactly, ie, half of BTC holders convert BTC to scBTC while the other half stay put and half the miners currently mining BTC switch to primarily mining scBTC. in that case, then i say the Bitcoin MC still loses. which is really the risk i'm trying to identify, that being any damage a SC might inflict on Bitcoin MC. it loses b/c the SC has succeeded in weakening Bitcoin's security by 50% subjecting it to possible 51% attacks and volatility (which will happen if any weakness in Bitcoin itself is detected by the market). as volatility picks up, the price will drop.
not true. using your base case. you have now essentially created two liquidity market. a transparent ann a private one. these are the only two markets that can work in synergy. both could thrive without effectively damaging the other. as long as people find value in transparence and in privacy and there will be a market for both such market. I actually believe this is something that could very plausibly happen.
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"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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cypherdoc (OP)
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October 30, 2014, 05:13:39 AM |
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well then, here's a thought argument.
let's say those 2 factors balance each other out exactly, ie, half of BTC holders convert BTC to scBTC while the other half stay put and half the miners currently mining BTC switch to primarily mining scBTC. in that case, then i say the Bitcoin MC still loses. which is really the risk i'm trying to identify, that being any damage a SC might inflict on Bitcoin MC. it loses b/c the SC has succeeded in weakening Bitcoin's security by 50% subjecting it to possible 51% attacks and volatility (which will happen if any weakness in Bitcoin itself is detected by the market). as volatility picks up, the price will drop.
not true. using your base case. you have now essentially created two liquidity market. a transparent ann a private one. these are the only two markets that can work in synergy. both could thrive without effectively damaging the other. as long as people find value in transparence and in privacy and there will be a market for both such market. I actually believe this is something that could very plausibly happen. there are a lot of speculators that can be sold an innovation that really isn't one. such as demurrage coin everyone keeps talking about. you might not think it's a good innovation but if all of a sudden you start seeing large #'s of scBTC appearing on its SC along with a rising price, you yourself said those would be indications of a succeeding SC. that would be all it takes for some other speculators to pile on. and in this case, where an innovation is marginal if not a bad idea, the original pumping whale might just do a pump and dump.
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cypherdoc (OP)
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October 30, 2014, 05:18:39 AM |
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I consider another flaw in your argument to be your casual dismissal of the force of arbitrage.
IF the whale has indeed identified a SC with a true innovation, he's in good shape jumping in first. as everyone starts following, including miners willing to primarily mine the SC for its sidecoin and scBTC, Bitcoin MC could become MM'd and thus weaker from a security standpoint. if that happens, the BTC price could be expected to drop below the scBTC price as the situation has now flipped from what it was prior to the SC takeover. that's where the stragglers could get caught on the MC as 51% attacks could be levied to block SPV proof formation.
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cypherdoc (OP)
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October 30, 2014, 05:30:05 AM |
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(with sufficient confidence to justify the inconvenience you describe)
this is what it comes down to if you ask me. if the innovation and the backing of this new sidecoin is so important the value proposition outweight ALL of the risks involved with such a migration than what the hell let's do it. but remember cypherdoc, you have said it yourself, there are numerous and considerable risks and friction in such a movement why are you arguing against a conclusion that paper itself talked about, that being a migration to a new SC?
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brg444
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October 30, 2014, 05:31:19 AM |
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there are a lot of speculators that can be sold an innovation that really isn't one. such as demurrage coin everyone keeps talking about. you might not think it's a good innovation but if all of a sudden you start seeing large #'s of scBTC appearing on its SC along with a rising price, you yourself said those would be indications of a succeeding SC. that would be all it takes for some other speculators to pile on.
and in this case, where an innovation is marginal if not a bad idea, the original pumping whale might just do a pump and dump.
lots of speculators != market majority that's another flaw in your argument. the market and liquidity will decide what is right for itself, but at this point speculators will never drive it to champion a coin that is flawed, whichever way. the only thing that can disrupt Bitcoin and effectively eliminate it, at this point, is a more important innovation. one that would improve on Bitcoin the way Bitcoin improves on gold. if this happen I will welcome it with open arms and speculators that will have spawned this movement will deserve all of their reward.
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"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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brg444
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October 30, 2014, 05:33:06 AM |
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why are you arguing against a conclusion that paper itself talked about, that being a migration to a new SC?
arguing? where did you read me arguing there? I have provided what is, in my opinion, the only context by which this migration could happen & effectively damage BTC.
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"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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cypherdoc (OP)
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October 30, 2014, 05:41:48 AM |
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there are a lot of speculators that can be sold an innovation that really isn't one. such as demurrage coin everyone keeps talking about. you might not think it's a good innovation but if all of a sudden you start seeing large #'s of scBTC appearing on its SC along with a rising price, you yourself said those would be indications of a succeeding SC. that would be all it takes for some other speculators to pile on.
and in this case, where an innovation is marginal if not a bad idea, the original pumping whale might just do a pump and dump.
lots of speculators != market majority that's another flaw in your argument. the market and liquidity will decide what is right for itself, but at this point speculators will never drive it to champion a coin that is flawed, whichever way. sigh, i didn't say that in this case of a marginal innovation that all BTC holders would switch to scBTC. in that case, the SC wouldn't take over. i simply said that a whale could still do a pump and dump to try and drive the price of scBTC upwards. his profit would probably have to come at some risk of buying scBTC on the open mkt prior to his pump or even during his pump to assist the ramp. and this could still drive confusion amongst other BTC speculators who might decide to pile onto the SC causing increasing volatility for the MC in terms of price. the only thing that can disrupt Bitcoin and effectively eliminate it, at this point, is a more important innovation. one that would improve on Bitcoin the way Bitcoin improves on gold. if this happen I will welcome it with open arms and speculators that will have spawned this movement will deserve all of their reward.
well at least we're starting to agree on some things in that you now see it is possible for this migration and switch to a SC can happen. that's progress. but my real point is that instead of forcing all of us to jump to a new SC every time a new innovative SC is spawned, creating headache and risk for us, why don't the core devs buckle down and work harder to introduce new innovations into Bitcoin itself as it currently stands instead of creating this whole new risky sub-structure called SC's that attach risk and volatility to the main chain? or is it heresy to say that "devs should not dev" unnecessarily when it comes to Bitcoin?
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cypherdoc (OP)
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October 30, 2014, 05:43:06 AM |
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time for bed.
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