Gold collapsing. Bitcoin UP.

[Adrian-x]

Everyone needs to read and digest this thoroughly.

One grammar error is that I believe  you meant SC proponents think BTC and Blockchain are "separable".

http://www.blockstream.com/sidechains.pdf

Some SC opponents believe.
 1) "To secure this value it will need to be mined, MM is the only option as the value will be comparable to that of Bitcoin. " This is a big mistake.

Co-signed SPV proofs. Introducing signers who must sign off on valid SPV proofs, watching for false proofs. This results in a direct tradeoff between centralisation and security against a high-hashpower attack.

A futuristic idea for a low-value or experimental sidechain is to invoke a trusted authority, whose only job is to execute a trusted setup for a SNARK scheme. Then SC blocks could be constructed which prove their changes to the unspent-output set, but do so in zero-knowledge in the actual transactions. They could even commit to the full verification of all previous SC blocks, allowing new users to get up to speed by verifying only the single latest SC block.

 2) They believe SC is an alt(Shit)Coin.  SC is not new ShitCoin.  SC is new service.

You are correct MM is not the only option. There are others.

My point remains that SC secure BTC but the value is transferred to the SC. So long as Bitcoin is more valuable one will have a motive to redeem the BTC.

So SC are a threat to Bitcoin because they separate The currency for the value in the blockchain. This will distort mining over time and predictability have a negative impact on Bitcoin.

There is not difference between
a) holding bitcoins BTC and not use them.
b) holding bitcoins on SC and use them on SC (eg. trade on exchange if this SC is exchange)

They both have same value 1 BTC.

There is a difference if the SC has a perceived value.
That's not a guarantee SC will have equal value the reason it's exciting is because people believe it's an opportunity to create value. And if you're correct and they will never have value let's just stick with BTC I'm happy but for the fact it limits block size.

Can Bitcoin the currency be separated from Bitcoin the blockchain technology ?

[adaseb]

Yes but keep in mind before sites started acceptin Bitcoin people just held on to it. It was difficult to withdraw it a few years ago. But now you can easily buy stuff with it, which causes the price to go down further.

Because the early adopters are selling.

[cypherdoc]

Because the early adopters are selling.

what are you talking about?  i've never sold a coin. neither have the Winklevii.  and look here:

http://bitcoinrichlist.com/top100

[cypherdoc]

and just to make it crystal clear again:

i have no conflicts of interest other than owning BTC.  no altcoin or Bitcoin startups or corporate investments whatsoever.  and i don't want to manipulate the price either. 

tvbcof can delude himself about plane flights all he wants but it is what it is, delusional.

[brg444]

inherently less secure and encourages mining centralization.  best case expect a MM of 50% that of Bitcoin.  that is insecure.  see https://www.reddit.com/r/Bitcoin/comments/2k01du/peter_todd_on_twitter_the_sidechains_paper_is/clgpjpx

you just pulled that 50% number out your ass heh   so peter's argument is dependent on a country outlawing the mining of a sidechain... that should work out well  

honest people will realize that if we return to your favorite pet, the anonymous sidechain, then on the contrary I find it very likely that most of the miners adopt it for MM considering it is trivial and introduces a new revenue stream for them.

ohhh but wait, maybe the country will outlaw it..  

wrong.  you just ignored Adrian's model of declining BTC fees paid to Bitcoin miners, a result of ppl moving to scBTC b/c of the risk free put and innovation.  all the tx fees will migrate to the SC leaving Bitcoin miners no choice but to defect.

WRONG. Refer to mistake 2, no one wants to move all of their BTC to scBTC because they are essentially UTILITY chains. They do not, on their own, offer more value than BTC's chain. Adrian's only possible scenario where the mining incentives are more important on a scBTC than on BTC is effectively through an altcoin. Even then, miners would continue mining the BTC blockchain until NO value can be pulled out of it (read: dead). You are therefore arguing an altcoin will take BTC over, a valient concern, but one that Sidechains do not introduce nor greatly enable

the correct way to look at this is you are breaking the link btwn the MC and its BTC by moving highly secure BTC to relatively insecure scBTC.  the equilibrium price of BTC will go DOWN.

FACT : it is trivial for miners to merge mine just about any chain and they will if there is ANY value in it.

The scenario you refuse to acknowledge is this one :

Adam, Gmax and the crew announce that after months of testing, they are introducing the anonymous sidechain. A sidechain that, I quote, as been

extremely well tested and coded to the same rigor as bitcoin itself.

While the developer team was busy cooking up this good stuff, our friend Austin Hill, having previously developed significant business relationships with major miners, reaches out to them and is able to obtain their support for the mining of the sidechain. On the day of the launch, he annonces that he was able to secure 75% of the mining power in order to bootstrap the security for the sidechain.

Eventually, and most likely not too long after the launch, the other miners realizing they are missing out on a potentially rewarding revenue stream add their support to the sidechain, essentially capturing MOST of the hashing power of the network to merge mine anonymous sidechain.

Considering the apparent serious implementation and backing behind the sidechain, the market starts using it and finds considerable value in it. price of BTC goes UP

[brg444]

Yes but keep in mind before sites started acceptin Bitcoin people just held on to it. It was difficult to withdraw it a few years ago. But now you can easily buy stuff with it, which causes the price to go down further.

Because the early adopters are selling.

Wrong.

[brg444]

Austin Hill :

The KEY idea here is to protect the concept of digital scarcity and 21 million Bitcoin limit

Adam Back :

Obviously no one is encouraging anyone to put real money into untested or buggy sidechains.  I dont think there will be lots of sidechains and the main sidechains will be extremely well tested and coded to the same rigor as bitcoin itself.

I believe absent from your paranoiac brains is the ability to recognize such statements and realize what is truly happening here.

Let's make it clear, there are two type of sidechains :

1. The one supported by the sidechains creators : a 1:1 BTC peg adding an additional layer to the BTC currency, effectively preserving its ledger while making possible certain desirable features (anonymity, faster transactions, share issuance, all the good stuff). These are what I like to call "utility" sidechains. It is literally IMPOSSIBLE for these to obtain more value than the BTC chain as they are dependent on it.

2. Altcoins. Yes I could call them sidecoins or whatever the fact is they are altcoins only booted on top of a sidechain. To argue that these cause an inherent danger to BTC is to argue that all altcoins, sidechained or not, are dangerous.

Unfortunately, most in this thread are so shortsighted they can only see #2. This makes me reconsider some of your positions as you have essentially created in your mind a new problem with an old one and for some twisted reason suggest the new one is more problematic and that we should fight it regardless of the value in #1.

It shows some of you are still scared that an altcoin could take BTC over because in reality, that is what all of your arguments boil down to.

[tvbcof]

Yes but keep in mind before sites started acceptin Bitcoin people just held on to it. It was difficult to withdraw it a few years ago. But now you can easily buy stuff with it, which causes the price to go down further.

Because the early adopters are selling.

Wrong.

Not so fast.  I've always been very honest about my thoughts and actions when I've described them (which is to often since I have limited self-control...)  So...

When I first read the Satoshi whitepaper I thought "this will never scale" but I somewhat bought the potential for blockchain pruning (which never occurred) though this is only a small part of the scaling problem. The basic concept of sidechains occurred to me right away, and back in 2011 I suggested 'XB0' for the foundation chain upon which a other chains stored value.

I argued that at BTC in the single digits was possibly a very good buy since there was a reasonable possibility that they could go to MUCH higher levels whether or not the scaling problems were solved in a manner which achieved the decentralized and uncontrolled aspects which held primary appeal to me.  And I practiced what I preached and bought with both hands (and have never done so since.)  In the end, my pushing money into the system was somewhat 'altruistic' in that I thought it of value (and fairly easy) to mop up BTC liquidity and thereby give the solution more of a chance.

My sales patterns were dictated by a pre-planned regime based on multiples of my profit.  I've tried to keep to these, but both my buying and my selling have been modulated by difficulties in mainstream-land.  My source for BTC in the early days (Tradehill) was killed and I've had bank accounts canceled and that sort of thing.  I did not meet my 100x sales objectives, but a large part of that is due to not really wanting to have unused fiat sitting around since it is demonstrably at risk in mainstream financial solutions.  In my case it does not even require a general economic crisis.  I'm completely crime-free and have bent over backward to pay all my taxes but I still get harassed.

At this point and indeed for the last few years my propensity to hold Bitcoin is absolutely moderated by my confidence that the scaling problems inherent in Bitcoin are being addressed.  Until a realistic hope for sidechains came along I didn't think they were, and that makes me anxious to 'drop this pig'.  Mainstream hassles, and the reality that friction has caused me to miss my targets and sell at a higher price than expected, have held me back.  Also, though, the theory that I can play 'pump-n-dump' along with the more well capitalized and connected of the players in the Bitcoin Foundation if I keep my eyes open.

If sidechains prove out I'll absolutely welcome the opportunity to use my BTC directly on them rather than go through the fiat channel.  Probably I'll put some value on various ones and engage in micro-tipping and such.  I'd love to have a 'govcoin' sidechain which I could use to pay my taxes.  If sidechains to not play out and if the Bitcoin Foundation get's their way, I am quite convince that Bitcoin itself will for all intents and purposes become 'govcoin' and I'm back to my more recent stance of how to dump them as profitably as possible.

edit:  a few pay -> play spelling corrections.

[brg444]

most small miner are unprofitable currently. many large miners are too.  all these will be happy to have an altcoin to move to.  but i guess that is what altcoins proponents are banking on.  but it comes at an expense.  the Bitcoin has a real and present danger of being replaced.

FTFY

[Odalv]

SC is only solution, how to send bitcoin to the Mars.

1. first, you separate some bitcoins from blockchain (lock them in MC) and create marsSC
2. launch the racket with marsSC to the Mars.
3. now astronauts can use Bitcoin at Mars.
4. after return from Mars simply merge marsSC into MC.

=> SC is not about separating bitcoins from blockchain. It is about dressing blockchain into Space suit.

[cypherdoc]

Man you people are so dense it's like you refuse to acknowledge the arguments made in most of my previous posts and insist on your incomprehension of the whole dynamics at stake to justify your ignorance.

Let us do it then step by step so you understand where you mistakes are

Bitcoin the currency is a mental bridge to understanding money as memory. The blockchain is the money. The blockchains existence is dependent on the economic incentive to wright transactions to it, it is an economic ledger if you adopt it. (Adopting Bitcoin is agreeing with the utility that it is the ledger.)

Agreed.

When rewards drop to a low quantity, possibly 20 months from now more likely 6 years, transaction fees will be a significant portion of the incentive to mine blocks. The network is dependent on incentivizing miners - to write transactions. In this model there is no wasted hashing, hashing grows to a point where it is supported by the value it provides eventually it grows to the marginal cost of transactions fees necessary to secure the network.  The drop in reward forces efficiency. And competition to mine for fees is incentivized by accepting the lowest fees possible. The mining market will tend to maximize profit by accepting the lowest fees that are viable or competition will get a sustaining advantage.

Messing with this has ramifications it changes the core of Bitcoin.
It really doesn't matter what miners think so long as they are at least 2 and they are in competition to write to the ledger in exchange for value that is redeemable in that ledger. The economic incentives, the value in the network, will ensure the appropriate industrial energy is invested.

This all sounds good to me... except maybe your inference that Sidechains "mess with this". moving on...

SC offer a secure way to use your BTC (Bitcoin the currency) but they don't secure the value, SC give me a choice transfer the value into another chain if it has greater value, and exchange it back if the other chain has less value.

Mistake 1 : Sidechains can protect the value through merged mining.
Mistake 2 : A chain that has greater value than Bitcoin = an alt-coin with greater value than Bitcoin. Utility features/services annexed to the main blockchain DO NOT have greater value than Bitcoin, only an alt-coin (supported through a sidechain or not) can claim this. If that is what you are suggesting (altcoin taking over) Sidechains are NOT introducing this risk and do little to enable it. As smooth has pointed out, the creator of such an altcoin would realize it is not necessarily desirable for his coin to utilize a sidechain.

I only believe BTC has a value because the only way in and out is by moving economic energy to the blockchain, Bitcoin in my mind is the blockchain and the currency are inseparable. It is just money is memory, value on the blockchain.

Mistake 3 : Assuming the transfer of scBTC does not generate, by proxy, the movement of economic energy to the main blockchain.

SC obviously have to be innovative (cypher' arguments have largely IMO focused on how you can fake success by messing with price.) But assuming they offer better value fake or real BTC will lock in. The BTC stay there but the value expressed as economic energy moves across.

See Mistake 2 :.

To secure this value it will need to be mined, MM is the only option as the value will be comparable to that of Bitcoin.
The miners will mine where ever the value is. If the SC becomes more valuable than Bitcoin (note the value can come from speculation manipulation or innovation we don't get a choice) then miners will derive there reward from the chain that gives the most incentives, nothing guarantees it will be Bitcoin.

See Mistake 2 :.

We also know Bitcoin will be disadvantaged over time with it's diminishing reward, and if the value is in a SC it will derive the highest reward from transaction fees. (The most viable argument I've heard is miners just MM all the SC, and I don't think that is a secure stratergy.) SC's could be anything even have an inflation rate however improbable that is it's not impossible, and not unlikely.   I conclude that miners will treat the value chain as the main chain and the Bitcoin blockchain would become less secure as miners don't have an economic incentive to keep it secure. (They earn off another chain)

Refer to Mistake 2 :. Note also that "I don't think that is a secure strategy" is not a reasonable answer to the argument you have been presented. FACT : it is trivial for miners to merge mine just about any chain and they will if there is ANY value in it.

Given we don't know who how or what SC will prevail we can probably expect a greater variety than we see with Alts as there are fiewer risks, we know if they fail to become the value chain they lose nothng and everything to gain if they succeeded.

No different than creating altcoins.

SC represent an attack vector fare more viable than a 51% attack, I for one wouldn't want to get 1:1 BTC back if the SC had more liquidity and a bigger network. And if that happened Bitcoin would not be as viable for me.

Refer to Mistake 2 :

I am convinced Bitcoin has no place being the dominant money or Master Chain unless it represent the economic memory or the greatest liquidity, SC change that, one may emerge that is adopted for reasons that appeal to non Austrian ideals, and absorbs Bitcoins value

Mistake 4 : Failure to understand that sidechains can preserve the ledger AND allow for more features to the unit in the ledger.

Austin Hill : "The KEY idea here is to protect the concept of digital scarcity and 21 million Bitcoin limit"

This is also a reiteration of your GOVcoin wins scenario which is truly a disturbing though coming from a Bitcoin proponent. See Mistake 2 :

Man,  you crack me up.

A 24yo insolent  kid with a  self admitted shitty job coming in here and insulting everybody when you've only been a member here since February 16, 2014. Where were you in 2011 when we were figuring this whole thing out? Oh yeah, you were 21! How many bitcoin do you own? Are you a butt hurt kid who wants a 2nd shot at Bitcoin at the expense of the rest of us?

[Odalv]

https://twitter.com/gavinandresen/status/453968257197027329

[cypherdoc]

https://twitter.com/gavinandresen/status/453968257197027329

That's old, April.

Why hasn't he really said anything recently except for the job thing?

[brg444]

Man,  you crack me up.

A 24yo insolent  kid with a  self admitted shitty job coming in here and insulting everybody when you've only been a member here since February 16, 2014. Where were you in 2011 when we were figuring this whole thing out? How many bitcoin do you own? Are you a butt hurt kid who wants a 2nd shot at Bitcoin at the expense of the rest of us?

What is pretty hilarious is your failure to answer any of my presented argument with logical counter.

Ad hominem attacks are not helping your cause

"Figuring this whole thing out"   You're so funny.

I didn't have the fortune of discovering Bitcoin before late last year. I was actually introduced to it during the previous bubble. I have been buying ever since

I have stated in my other post that most of my capital is invested in BTC.

Are you a butt hurt kid who wants a 2nd shot at Bitcoin at the expense of the rest of us?

 

You're starting to sound pretty desperate here cypher

[cypherdoc]

Man,  you crack me up.

A 24yo insolent  kid with a  self admitted shitty job coming in here and insulting everybody when you've only been a member here since February 16, 2014. Where were you in 2011 when we were figuring this whole thing out? How many bitcoin do you own? Are you a butt hurt kid who wants a 2nd shot at Bitcoin at the expense of the rest of us?

What is pretty hilarious is your failure to answer any of my presented argument with logical counter.

Ad hominem attacks are not helping your cause

"Figuring this whole thing out"   You're so funny.

I didn't have the fortune of discovering Bitcoin before late last year. I was actually introduced to it during the previous bubble. I have been buying ever since

I have stated in my other post that most of my capital is invested in BTC.

Are you a butt hurt kid who wants a 2nd shot at Bitcoin at the expense of the rest of us?

 

You're starting to sound pretty desperate here cypher

Au contraire. You're the one spamming my thread. You could just go away or put me on ignore but clearly you won't do that along with odalv. Who knows what your motivations are.

And i have a track record that supercedes yours. I know that will  anger alot of people but yeah, I think that deserves me to be heard.  and I'm annoyed that you and the community might end up letting guys like GM and Luke perhaps make millions off this while yes,  putting all the rest of us at risk.

Your hubris acting like you know with certainty that there cannot be a bad outcome is highly suspect and naive. I see clear unpredictable economic possibilities which all you SC proponents want to sweep away.

[N12]

Au contraire. You're the one spamming my thread. You could just go away or put me on ignore but clearly you won't do that along with odalv. Who knows what your motivations are.

And i have a track record that supercedes yours. I know that will  anger alot of people but yeah, I think that deserves me to be heard.  and I'm annoyed that you and the community might end up letting guys like GM and Luke perhaps make millions off this while yes,  putting all the rest of us at risk.

Your hubris acting like you know with certainty that there cannot be a bad outcome is highly suspect and naive. I see clear unpredictable economic possibilities which all you SC proponents want to sweep away.

How would GM/Luke stand to make millions off of Sidechain due to their involvement? Is there some premine?

[cypherdoc]

Au contraire. You're the one spamming my thread. You could just go away or put me on ignore but clearly you won't do that along with odalv. Who knows what your motivations are.

And i have a track record that supercedes yours. I know that will  anger alot of people but yeah, I think that deserves me to be heard.  and I'm annoyed that you and the community might end up letting guys like GM and Luke perhaps make millions off this while yes,  putting all the rest of us at risk.

Your hubris acting like you know with certainty that there cannot be a bad outcome is highly suspect and naive. I see clear unpredictable economic possibilities which all you SC proponents want to sweep away.

How would GM/Luke stand to make millions off of Sidechain due to their involvement? Is there some premine?

Consulting contracts building SC's. For gvts et al. Maybe starting an sidecoin of their own.

[brg444]

Au contraire. You're the one spamming my thread. You could just go away or put me on ignore but clearly you won't do that along with odalv. Who knows what your motivations are.

And i have a track record that supercedes yours. I know that will  anger alot of people but yeah, I think that deserves me to be heard.  and I'm annoyed that you and the community might end up letting guys like GM and Luke perhaps make millions off this while yes,  putting all the rest of us at risk.

Your hubris acting like you know with certainty that there cannot be a bad outcome is highly suspect and naive. I see clear unpredictable economic possibilities which all you SC proponents want to sweep away.

You're even more delusional than I thought..

Spamming your thread? I suggested we stop talking about sidechains in this thread a couple of pages ago. Remember your response ?

Your track record doesn't enable you to spew blatant FUD based on illogic and strech of the mind scenarios.

I suggest your put away your tinfoil hat for a moment and present a sensible argument against sidecoins that is not premised with the creation of an altcoin. Until then, your "track record" has taken quite a hit in credibility in the last few days.

[brg444]

Consulting contracts building SC's. For gvts et al. Maybe starting an sidecoin of their own.

Maybe you don't know what you're talking about 

[Erdogan]

There is only one change that is required. 

that is the one i've been talking about all along.

And that change will not be implemented, because that means that something outside bitcoin can control bitcoin.