Gold collapsing. Bitcoin UP.

[Adrian-x]

The result is lower block rewards, and less incentive to mine, all the while bitcoin holders can exchange into the new network further reducing Bitcoins value.

How do you explain lower block reward? My understanding is block reward remains the same no matter the size of the mining infrastructure.

Bitcoin block rewards shrink as we know, but soon like 6 years it would be feasible to consider the transaction fee making up a significant part of the block reward. moving those fees to a SC would degrade Bitcoin. 

Also, I don't see how 1:1 peg drains the lift life out of the host. Think of the main chain as a reserve account and sidechains as checking account. A well designed, 1:1 peg of Bitcoin that works in synergy with the main chain does not diminish the network IMO. These chains are effectively sub-chains.

at the moment you are growing the network if you invest in Alts, here is one eg. during the peek of DarkCoin, i was looking to see what the fuss was about and checking for an exit point. The biggest stall to the exponential growth was the KYC rules in place with Bitcoin gate keepers, manly it was diffident to buy Dark because people interested couldn't be hassled with going through BTC.

BTC may always be a bit geeky and not suitable for the masses, (still suitable for a reserve currency though) but imagine we do through a crises and you can transfer from your bank account directly into a SC and you can avoid the whole bitcoin exchange experiences with all the benefits of a 1:1 backing. you would use the better option, in that scenario the SC has a hider demand than bitcoin and speculators take advantage of arbitration. and bitcoins move into the side chain, and the Bitcoin network shrivels, and stop growing because miners cant make a profit from the transaction fees.

your vision of bitcoin being the backing for all of chain growth is only viable so long as Bitcoin is the MC, when it stops being the MC due to the Metacafe's law the SC will absorb and shake themselves of it, the SC may have an inflation sachem that rewards miners in a more favorably, be better amalgamated with the Banking carrells and it is not a stretch to see bitcoin being abandoned, or even needed.

SC that take improve on bitcoins utility do it by inflating value off chain, and bitcoin dosn't grow the SC grows.
   

Here is a rational proposition :

You have the Bitcoin main-chain and two sidechains : one for privacy and one for micro-transactions. Do you not agree that these can work in synergy and ultimately add value to the network by being supported by the same underlying currency (or technically BTC and BTC-peg). In fact, there is more incentives more miners to mine considering the expected increase in transactions and effective use of the network.

From my point of view it certainly is more beneficial to BTC than having Bitcoin and two other alt-coins that serve these features. I also fail to understand your arguments that these chains (in my example) would work as "for-profit" ideas.

micro-transactions are mute, Ive seen trust free technical solutions for this innovation with micro payment channels and potential with OT.

its not so much that the user case for SC to enable anonymity is not beneficial, the issue is you get the value leaking problem if the SC are beneficial. anonymity isn't so great when you want to prove you made a payment. at this point in time it is the No. 1 Killer app as there are lots of stolen coins wanting to come out, and it would help Bitcoin grow like in silk road commerce.

but ultimately Bitcoins Pseudonymity is forcing decentralized trust free serves like OpenBazaar and OT exchanges where your identity is never revealed, or if it is you chose which one. Decentralized and trust free everything is much more valuable then anonymous BTC, in a decentralized trust free world Pseudonymity is anonymity 

[1714147545]

1714147545

[1714147545]

1714147545

[brg444]

People have been proposing this because they are economically ignorant.

There is no such thing as intrinsic value. Currencies only have value if people use them, so there is no way for Bitcoin to have behave as a store of value in the long term except as a direct consequence of its use as a medium of exchange.

Before you start talking about gold - no, it won't work that way.

Prior to central banks, gold behaved as a store of value because it was used as a medium of exchange.

After central banks, gold behaved as a store of value because of taxation.

Bitcoin could never survive as a high-fee settlement currency because high fees would arise due to block size rationing, not because transactions should naturally cost that much for technical reasons. Bitcoin would lose out to a competing currency with less/no rationing that would be less expensive to use for settlements.

High transaction rates on the main chain are the only way for Bitcoin to survive. Yes, getting there is a difficult technical problem to solve. Deal with it.

Where did you get the idea of intrinsic value? I can't find it in my comments.

I don't agree with your comments. Bitcoin will be used as a medium-of-exchange, only, by proxy, through a BTC-pegged unit on a more efficient sidechain. I know you will say money doesn't require backing but in the case of Bitcoin it does not matter.

On the contrary, I find the comparison to gold to be excellent. I know we all hate fiat for what it has become but the fiat technology was a fantastic idea and for a moment a great advancement for our society. It came out of necessity for a more transportable and convenient mean of exchange. Much like gold, Bitcoin's transportation property suffers from some shortcomings : confirmation time & transparency.

On the other hand, unlike gold-backing Bitcoin-backing is fundamentally different in that there is no counterparty risks. The pegging can not be abused by the backers. For this reason Bitcoin is the perfect reserve currency.

Bitcoin could never survive as a high-fee settlement currency because high fees would arise due to block size rationing, not because transactions should naturally cost that much for technical reasons. Bitcoin would lose out to a competing currency with less/no rationing that would be less expensive to use for settlements.

High transaction rates on the main chain are the only way for Bitcoin to survive. Yes, getting there is a difficult technical problem to solve. Deal with it.

High-fee? This is not what I am suggesting, more like high-volume. Block size rationing are a whole different debate.

[Adrian-x]

Then Bitcoin becomes the central clearing house, reserve & store of value chain while other chains are left to operate daily transactions for better efficiency.

People have been proposing this very idea for awhile but assumed the transactions would be handled off-chain by semi-centralized entities. Sidechain removes the need for that.

Miners can mine BTC & the sidechain. I'm not sure where you get the idea they have to choose between the two.

OT servers can do the same thing and give all alts a chance, let it be a market need driven innovation.

in my view Blockstream have an advantage, but aside from that changing the SC protocol to exclude MM could happen,

[brg444]

Bitcoin block rewards shrink as we know, but soon like 6 years it would be feasible to consider the transaction fee making up a significant part of the block reward. moving those fees to a SC would degrade Bitcoin. 

Miners mine both chains. They profit no matter where the transactions take place.

and bitcoins move into the side chain, and the Bitcoin network shrivels, and stop growing because miners cant make a profit from the transaction fees.

Again, miners don't have to choose one chain to mine. They can and will profit from mining the two.

your vision of bitcoin being the backing for all of chain growth is only viable so long as Bitcoin is the MC, when it stops being the MC due to the Metacafe's law the SC will absorb and shake themselves of it, the SC may have an inflation sachem that rewards miners in a more favorably, be better amalgamated with the Banking carrells and it is not a stretch to see bitcoin being abandoned, or even needed.

SC that take improve on bitcoins utility do it by inflating value off chain, and bitcoin dosn't grow the SC grows.

I'm not convinced by your theory that Bitcoins locked on 1:1 peg creates a new network that competes with Bitcoin's. As for the second part of your comment, it defeats logic to suggest Bitcoin would be defeated by an inflationary sidechain with closer ties to the banking cartels. It is straight up ridiculous in fact.
   

the issue is you get the value leaking problem if the SC are beneficial. anonymity isn't so great when you want to prove you made a payment. at this point in time it is the No. 1 Killer app as there are lots of stolen coins wanting to come out, and it would help Bitcoin grow like in silk road commerce.

but ultimately Bitcoins Pseudonymity is forcing decentralized trust free serves like OpenBazaar and OT exchanges where your identity is never revealed, or if it is you chose which one. Decentralized and trust free everything is much more valuable then anonymous BTC, in a decentralized trust free world Pseudonymity is anonymity 

I agree 100% with your comments on transparency and anonymity but I take problem with your "value leaking" theory. There is no value leaking, it is an essentially an ecosystem sharing value in a synergic manner.

[Adrian-x]

People have been proposing this because they are economically ignorant.

There is no such thing as intrinsic value. Currencies only have value if people use them, so there is no way for Bitcoin to have behave as a store of value in the long term except as a direct consequence of its use as a medium of exchange.

Before you start talking about gold - no, it won't work that way.

Prior to central banks, gold behaved as a store of value because it was used as a medium of exchange.

After central banks, gold behaved as a store of value because of taxation.

Bitcoin could never survive as a high-fee settlement currency because high fees would arise due to block size rationing, not because transactions should naturally cost that much for technical reasons. Bitcoin would lose out to a competing currency with less/no rationing that would be less expensive to use for settlements.

High transaction rates on the main chain are the only way for Bitcoin to survive. Yes, getting there is a difficult technical problem to solve. Deal with it.

Just quoting this because it distills my understanding further, with a cupped hands and raised voice in bold.  thanks,

[tvbcof]

well said, the problem isn't technical its adoption of the idea or cryptocurrency, everything flows from faith in Bitcoin.

Exactly.  That is why I don't want to see Bitcoin balloon to the point where it is impractical for smaller players to be full peers.  Preferably individuals if possible.  More than that, I want to see core Bitcoin be small enough so that it could use non-corporate communications channels if the solution is attacked by that sector which I see as a high probability event in the case of the next economic crisis.

Even the threat of eventually just saying 'fuck it' with respect to pruning and making a simplistic tweak to just expand the transaction rate (block size) has been enough to make me that much more inclined to sell out, and I did a fair amount of that at the beginning of the year.  Even if Bitcoin can be pretty big riding on the backs of the large corporate players it's just not a very interesting solution to me at that point.

Sidechains, or seeing some real progress toward them before it's to late, has been most inspiring to me indeed and has reinvigorated my hopes for Bitcoin.

The race now seems to be between the Bitcoin Foundation guys trying to get Gavin's exponential growth in place and the blockstream guys trying to save Bitcoin to be something similar to what it was advertised to be when I first took a position.

[Adrian-x]

Bitcoin block rewards shrink as we know, but soon like 6 years it would be feasible to consider the transaction fee making up a significant part of the block reward. moving those fees to a SC would degrade Bitcoin.  

Miners mine both chains. They profit no matter where the transactions take place.
[/quote]

I mine, i used to MM NameCoin, i dropped it because it wasn't worth the effort and the 2% pool fee i sacrificed on by BTC. nameCoin's fate could happen to Bitcoin, also 14 years form now we may choose to drop bitcoin altogether because its not needed anymore, it worked as a seed for the SC's.    

edit:

I agree 100% with your comments on transparency and anonymity but I take problem with your "value leaking" theory. There is no value leaking, it is an essentially an ecosystem sharing value in a synergic manner.

mining must also go through a market evolution, it must stop growing as some point. locking in to PoW MM for ever is not evolution it is manipulation, who knows the bitcoin killer may use proof of Bandwidth or proof of Block Archiving. if you do that with a SC I think Bitcoin would become obsolete as the value will leak into the SC as fast as rewards diminish. 

[brg444]

Bitcoin block rewards shrink as we know, but soon like 6 years it would be feasible to consider the transaction fee making up a significant part of the block reward. moving those fees to a SC would degrade Bitcoin.  

Miners mine both chains. They profit no matter where the transactions take place.

I mine, i used to MM NameCoin, i dropped it because it wasn't worth the effort and the 2% pool fee i sacrificed on by BTC. nameCoin's fate could happen to Bitcoin, also 14 years form now we may choose to drop bitcoin altogether because its not needed anymore, it worked as a seed for the SC's.    

I'm sorry but this is a very, very shaky parallel to make.

If Bitcoin is not needed it is only because a better store of value will have appeared. If it is so then let it be, but I don't find it likely since Bitcoin has worked exceptionnaly well so far, benefits from a considerable network effect and has very sound fundamentals.

[brg444]

mining must also go through a market evolution, it must stop growing as some point. locking in to PoW MM for ever is not evolution it is manipulation, who knows the bitcoin killer may use proof of Bandwidth or proof of Block Archiving. if you do that with a SC I think Bitcoin would become obsolete as the value will leak into the SC as fast as rewards diminish. 

so essentially your concern is now that Bitcoin gets replaced because a better technology came along 

[DonDev]

Nothing can replace bitcoin.
Bitcoin for life 

[brg444]

Nothing can replace bitcoin.
Bitcoin for life 

who knows. before 2009 no one thought we could replace gold as a store of value.

[Adrian-x]

Bitcoin block rewards shrink as we know, but soon like 6 years it would be feasible to consider the transaction fee making up a significant part of the block reward. moving those fees to a SC would degrade Bitcoin.  

Miners mine both chains. They profit no matter where the transactions take place.

I mine, i used to MM NameCoin, i dropped it because it wasn't worth the effort and the 2% pool fee i sacrificed on by BTC. nameCoin's fate could happen to Bitcoin, also 14 years form now we may choose to drop bitcoin altogether because its not needed anymore, it worked as a seed for the SC's.    

I'm sorry but this is a very, very shaky parallel to make.

If Bitcoin is not needed it is only because a better store of value will have appeared. If it is so then let it be, but I don't find it likely since Bitcoin has worked exceptionnaly well so far, benefits from a considerable network effect and has very sound fundamentals.

I'm going to quote Justus again  

Currencies only have value if people use them, so there is no way for Bitcoin to have / behave as a store of value in the long term except as a direct consequence of its use as a medium of exchange.
.... Bitcoin would lose out to a competing currency with less/no rationing that would be less expensive to use for settlements.
High transaction rates on the main chain are the only way for Bitcoin to survive.

Metcalfe's law was my way of thinking about it, I'm happy for something better to come along, i believe bitcoin is a better store of value because the the economic energy maintaining the ledger stays in the ecosystem. as soon as bitcoins move into a SC the SC benefits with no downside risk, the locked scBTC has no value as the value is in the SC tokens. if it goes bad just get a computer to refund your BTC, if it succeeds then the value is gone for good it resided in the SC, theoretically you can convert it back but why?  it seems to me the more SC grow the less valuable BTC becomes.  

[Adrian-x]

mining must also go through a market evolution, it must stop growing as some point. locking in to PoW MM for ever is not evolution it is manipulation, who knows the bitcoin killer may use proof of Bandwidth or proof of Block Archiving. if you do that with a SC I think Bitcoin would become obsolete as the value will leak into the SC as fast as rewards diminish. 

so essentially your concern is now that Bitcoin gets replaced because a better technology came along 

its not better technology that will replace bitcoin its better propaganda and consumer confidence keepers, some improvment i can see implemented in SC adjusting the fixed supply to a constant 3% economic growth stimulates (because economists think moderate monetary growth is good)  increasing the tx fees, we need more miners for security, and teh proponents saying you the people, listen up, we have embraced bitcoin's blockchain technology its been improved and is safe for consumer adoption, were moving our national currency into the blockchain.

and in the blink of an eye Bitcoins tiny billion dollar market cap is absorbed and assimilated and usurped. Replaced  not by better tech but by confidence spinning.

[tvbcof]

I'm going to quote Justus again  

Currencies only have value if people use them, so there is no way for Bitcoin to have / behave as a store of value in the long term except as a direct consequence of its use as a medium of exchange.
...

Using a properly implemented sidechain IS using Bitcoin.

[brg444]

I'm going to quote Justus again  

Currencies only have value if people use them, so there is no way for Bitcoin to have / behave as a store of value in the long term except as a direct consequence of its use as a medium of exchange.
.... Bitcoin would lose out to a competing currency with less/no rationing that would be less expensive to use for settlements.
High transaction rates on the main chain are the only way for Bitcoin to survive.

Metcalfe's law was my way of thinking about it, I'm happy for something better to come along, i believe bitcoin is a better store of value because the the economic energy maintaining the ledger stays in the ecosystem. as soon as bitcoins move into a SC the SC benefits with no downside risk, the locked scBTC has no value as the value is in the SC tokens. if it goes bad just get a computer to refund your BTC, if it succeeds then the value is gone for good it resided in the SC, theoretically you can convert it back but why?  it seems to me the more SC grow the less valuable BTC becomes.  

I don't see how his quote helps you much.

The SC, to me, is part of the ecosystem, unless it issues a different token on its own chain.

I take objections with the kind of statements that suggest it "could go bad". A sidechain using a 1:1 peg of BTC as its unit cannot go bad from my point of view because they are UTILITY chains. Either they execute their purpose as designed or they don't. Only suckers will want to speculate with these type of chains.

I think we all agree that Bitcoin is good enough right now and actually pretty close to being perfect as is. As I have mentionned above, its only shortcomings are in its transportive properties : confirmation times and inability to provide private transactions natively. This leads me to believe these two aspects are likely the only ones that who will lead to the creation of utility sidechains that are used as subsets of Bitcoin-money. In all honesty, is there anything more we need from Bitcoin, as a mean of exchange, than faster confirmation time and a privacy option? I don't think so.

Thousands of other sidechains will be created for different purposes but none will be competing with Bitcoin for its position as crypto-money. Some might try, but will realise they will be better off applying their competing idea to an actual altcoin.

Back to my two utility sidechains : these will never take over Bitcoin as they are effectively serving only a certain application or subset of money. Considering these two applications are using a BTC-peg as their transacting unit they are, barring some technicalities, a part of the Bitcoin network and closely tied to the native bitcoin unit, so much in fact that their 1:1 value will always gravitate toward each others and this correlation will become narrower as arbitrage comes into effect and time allows the technology to mature.

[brg444]

its not better technology that will replace bitcoin its better propaganda and consumer confidence keepers, some improvment i can see implemented in SC adjusting the fixed supply to a constant 3% economic growth stimulates (because economists think moderate monetary growth is good)  increasing the tx fees, we need more miners for security, and teh proponents saying you the people, listen up, we have embraced bitcoin's blockchain technology its been improved and is safe for consumer adoption, were moving our national currency into the blockchain.

and in the blink of an eye Bitcoins tiny billion dollar market cap is absorbed and assimilated and usurped. Replaced  not by better tech but by confidence spinning.

 

my man, I have to say you almost had me. I, for one second, had the impression I was conversing with a smart fellow. You should be ashamed of such deception.

your argument is GOVcoin, with inflationary features and corporate sponsors will kill Bitcoin?

well my friend, this is the beauty of cryptocurrency. the democracy of money, where people vote with their $ (or BTC) and may the best man win.

let them have their attempt at GOVcoin and the free market will decide who the winner is.

I, for one, will have no part in it but I wish them luck. they will need lots of it.

[brg444]

I'm going to quote Justus again  

Currencies only have value if people use them, so there is no way for Bitcoin to have / behave as a store of value in the long term except as a direct consequence of its use as a medium of exchange.
...

Using a properly implemented sidechain IS using Bitcoin.

+1

[nanobrain]

its not better technology that will replace bitcoin its better propaganda and consumer confidence keepers, some improvment i can see implemented in SC adjusting the fixed supply to a constant 3% economic growth stimulates (because economists think moderate monetary growth is good)  increasing the tx fees, we need more miners for security, and teh proponents saying you the people, listen up, we have embraced bitcoin's blockchain technology its been improved and is safe for consumer adoption, were moving our national currency into the blockchain.

and in the blink of an eye Bitcoins tiny billion dollar market cap is absorbed and assimilated and usurped. Replaced  not by better tech but by confidence spinning.

snip....cultist droning...snip

Yeah, yeah..."come the revolution".

Always a day awaaay.

[Adrian-x]

I'm going to quote Justus again  

Currencies only have value if people use them, so there is no way for Bitcoin to have / behave as a store of value in the long term except as a direct consequence of its use as a medium of exchange.
...

Using a properly implemented sidechain IS using Bitcoin.

+1

I still need to understand how, to me it looks like using ones Bitcoin as collateral while one uses a SC's utility.

[cypherdoc]

I'm going to quote Justus again  

Currencies only have value if people use them, so there is no way for Bitcoin to have / behave as a store of value in the long term except as a direct consequence of its use as a medium of exchange.
...

Using a properly implemented sidechain IS using Bitcoin.

+1

you sure are one desperate dude.