Gold collapsing. Bitcoin UP.

[Adrian-x]

That is breaking the link.

They are taking the Bitcoin brand and applying it to their (and others' but I think they are more concerned with theirs) sidechain coin, which is not Bitcoin but is another coin backed by Bitcoin held in reserve.

If Bitcoin were a defended trademark this appropriation would likely not be allowed. As a practical factual matter it is also untrue. The actual Bitcoin do not and can not leave the Bitcoin blockchain.

They may get away with it though, because as others have pointed out here, the Bitcoin-the-currency/Bitcoin-the-blockchain meme is popular and spreading.

Well it hasn't come to pass yet, that idea atm remains fiction.

I'm sorry but you guys are confusing two ideologies for one.

Blockstream's idea, whether you support it or not, does not suggest that the Blockchain can be supported without Bitcoin.

The meme Peter R was referring to is the one parroted by mainstream media pretending that Blockchain tech does not need its own native currency. "Why not use it to trade USD"

  I don't think you understand what I've beet talking about and why SideChains are interesting to financial asset management companies.

Bitcoin the private key has no value, securing it in a SC doesn't secure value stored in the Bitcoin blockchain, (just like securing my keys on an offline computer can't secure the value in the blockchain)  only now with a SC the value could be allowed to freely move into the SideChain. (note the separation of BTC from the value in the block chain its just a presumption it will always come back, people are funny creatures) This is new this is a big change, this changes how I see Bitcoin, there are pros and cons, I'm not interested in exploring only the pros I have a lifetime to explore those I want to understand the cons!

And your not helping.

[brg444]

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC₁.
2) Some scBTC₁ is SPV'd to scBTC₂.
3) scBTC₁ is discovered to be a scam (or just a bad implementation) whereas scBTC₁coin massively inflates so that no one on scBTC₂ has any incentive to SPV back from scBTC₂ to scBTC₁ and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

well essentially you're suggesting the coins were initially transferred to a non-secure scheme without proper due diligence from the owner so my answer is no, this is not a "new" risk.

Can you help me understand how do we do this without the side chains?
For example, using an alt coin does something quite different:
If I sell bitcoin for an alt coin which turns out to be a long con scam, but before the scam was sprung, I had traded them to a different alt coin, I could still trade that second alt coin for BTC, and the BTC I initially traded away are not essentially "burned" they are still being exchanged on MC by whomever got them from me.

It doesn't matter if you transfer it to a second, third or fourth sidechain. The onus of your decision is in validating the security of your initial transfer off the Bitcoin mainchain.

Either you keep your Bitcoin on chain or you take the risk of trusting some other scheme with your coins. What is the incentive? What are the risks? Any ensuing event will be a consequence of that decision. Once you leave the mainchain you forego your position in the only established trustless crypto environment.

we're worried about ordinary ppl who in the future might want to get into Bitcoin.   they won't have the technical expertise or knowledge to know what's going on.  as we've seen from altcoins, they can always attract a crowd be it with deception or true value.  to think that SC's changes this is to be determined.  you did see my post from earlier today?

it's starting already.

Truthcoin, enabled by SC's!

http://www.truthcoin.info/

So do I understand that you agree with me that a new risk is not introduced? There is always an inherent risk when trusting your Bitcoins to be somewhere else than on the blockchain.

Now to be completely fair, does Sidechain offer new schemes that could potentially abuse and profit from this risk? Probably. But from my point of view this is the nature of the beast : as the technology evolves so does the potential for more elaborate scams.

[cypherdoc]

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC₁.
2) Some scBTC₁ is SPV'd to scBTC₂.
3) scBTC₁ is discovered to be a scam (or just a bad implementation) whereas scBTC₁coin massively inflates so that no one on scBTC₂ has any incentive to SPV back from scBTC₂ to scBTC₁ and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

well essentially you're suggesting the coins were initially transferred to a non-secure scheme without proper due diligence from the owner so my answer is no, this is not a "new" risk.

Can you help me understand how do we do this without the side chains?
For example, using an alt coin does something quite different:
If I sell bitcoin for an alt coin which turns out to be a long con scam, but before the scam was sprung, I had traded them to a different alt coin, I could still trade that second alt coin for BTC, and the BTC I initially traded away are not essentially "burned" they are still being exchanged on MC by whomever got them from me.

It doesn't matter if you transfer it to a second, third or fourth sidechain. The onus of your decision is in validating the security of your initial transfer off the Bitcoin mainchain.

Either you keep your Bitcoin on chain or you take the risk of trusting some other scheme with your coins. What is the incentive? What are the risks? Any ensuing event will be a consequence of that decision. Once you leave the mainchain you forego your position in the only established trustless crypto environment.

we're worried about ordinary ppl who in the future might want to get into Bitcoin.   they won't have the technical expertise or knowledge to know what's going on.  as we've seen from altcoins, they can always attract a crowd be it with deception or true value.  to think that SC's changes this is to be determined.  you did see my post from earlier today?

it's starting already.

Truthcoin, enabled by SC's!

http://www.truthcoin.info/

So do I understand that you agree with me that a new risk is not introduced? There is always an inherent risk when trusting your Bitcoins to be somewhere else than on the blockchain.

Now to be completely fair, does Sidechain offer new schemes that could potentially abuse and profit from this risk? Probably. But from my point of view this is the nature of the beast : as the technology evolves so does the potential for more elaborate scams.

no i don't agree.  i think NL's example is a good one showing increased risk.

ordinary ppl won't necessarily understand the bolded statement as you presume.

[rocks]

So do I understand that you agree with me that a new risk is not introduced? There is always an inherent risk when trusting your Bitcoins to be somewhere else than on the blockchain.

Now to be completely fair, does Sidechain offer new schemes that could potentially abuse and profit from this risk? Probably. But from my point of view this is the nature of the beast : as the technology evolves so does the potential for more elaborate scams.

no i don't agree.  i think NL's example is a good one showing increased risk.

ordinary ppl won't necessarily understand the bolded statement as you presume.

Confusion between "did Bitcoin fail me and lose my coins or did a Sidecoin fail me and lose my coins" is a very legitimate issue. I'm worried about this also.

I think a lot of side chains will be seen as services beyond the main chain. For example today if one wants to anonymize coins they need to go use some sort of mixing service, if they lose their coins in the process the service takes the blame though, not bitcoin. I think sidechains will be the same, people have bitcoins and then decided to use some anonymous sidechain service, if they lose their coins I think it will be clear it was the sidechain / service at fault.

If a sidechain is integrated into Bitcoin-qt or blockchain.info to the extent that you're not even aware of the sidechain being used, then I can see the scenario you're describing as being confusing and damaging to Bitcoin. But I think SC's will be implemented in a manner that it is clear when they are being used.

At least that is my expectation / hope.

[brg444]

no i don't agree.  i think NL's example is a good one showing increased risk.

ordinary ppl won't necessarily understand the bolded statement as you presume.

The risk is the same : to trust your money elsewhere than on the blockchain. The schemes to deceive people into doing so might increase in numbers with sidechain but the risk is the same.

As for your second comment, I'm sorry but they absolutely should understand it. It is the very principle of Bitcoin : creating a trustless environment. It took a long time for Bitcoin to establish this status and it should be obvious that any step outside of its circle exposes you to risk that should be accounted for.

Also, I have some difficulty with your proposition that "ordinary people" will be trusting their money to all kind of obscure sidechains. Ordinary people only trust mainstream and established platforms. It is very unlikely the majority of them will fall victim to overlycomplicated schemes.

[cypherdoc]

i think the true answer is, "it's impossible to know".  a loss of that magnitude would wipe out alot of Bitcoin's most ardent supporters, eliminate the perception of SOV, and could set the community back 100 yrs.  in that sense, the BTC price could tank.  i know i wouldn't trust crypto devs anymore in my lifetime if i lost scBTC from that scenario.  or, yes, it could "make all our BTC more valuable!"  that's certainly the conventional thinking around here.

the difference with your gold example is that i doubt the Chinese had any idea a Spanish armada ship laden with gold went to the bottom of the Atlantic.  today, we have the internet and the media would be all over it.

that's a fair statement but again, how does sidechain increase the risks of BTCs being lost to centralized, malicious or corrupted scheme?

If the notion is that: "Side Chains are great because people more foolish than I am will mistakenly trust some bad ones, and use them, and lose some of their coins making mine more valuable."  
Than this isn't particularly good for Bitcoin if people lose confidence in it, so whether it may or may not be good for one's own bitcoin value is questionable.

Here is one scenario where BTCs may be lost to MC in this way, essentially rendered unspendable through an economic activity.

1) Some BTC is SPV'd to scBTC₁.
2) Some scBTC₁ is SPV'd to scBTC₂.
3) scBTC₁ is discovered to be a scam (or just a bad implementation) whereas scBTC₁coin massively inflates so that no one on scBTC₂ has any incentive to SPV back from scBTC₂ to scBTC₁ and so no way to return to MC.

(Yes, you can create a side chain from a side chain.)
complexity risks...

Edit:  Is there a way to have such an event without sidechains, or is this a "new" risk?

this scenario is helpful in conceptualizing what is happening.  

the "BTC is locked up on the MC in UTXO and never leaves" potentially gives a false impression that there will always be 21M.  it tempts one to ignore what's happening beyond the other side of the 2wp out there in SC world.  the pass thru model forces one to consider and concentrate on what is going on out there as these scBTC are jumping from SC to SC each one of each could fail or be a scam.  assuming there will be attrition of scBTC over time, the conclusion is there will always be <21M ever decreasing.

Whether the BTC are transferred to one sidechain or to multiple links of the sidechains, the result is the same. Either:

1) Bitcoin is the backing reserve asset to any linked scBTC. If so then convertibility is maintained and Bitcoin functions as the security mechanism, or

2) scBTC jump from SC to SC (as your example) and one sidechain in the link breaks, which breaks the link back to the underlying backing BTC. This however in effect converts that scBTC into an altcoin, those scBTC are no longer convertible with BTC and Bitcoin is no longer providing the underlying security.

Such a situation converts a SC into an altcoin.

I'm fine with that because the market is showing how network effects are slowly crushing altcoins. Once an SC converts into an altcoin, it now loses all network effects and is cast off on it's own. It now functions separately from the entire bitcoin ecosystem and can not be used with that ecosystem. Such an altcoin I believe will lose value and diminish to nothingness. You can't hide this from users, they are now locked out of the rest of the bitcoin ecosystem, that is huge.

Altcoins scare the crap out of me, the are the only threat to the Sound Money principle. But as stated before network effects seem to be properly working, I expect that to continue.

The pegging mechanism ensures convertibility, which exposes if the sidechain is #1 or #2. If a sidechain breaks convertibility, it becomes #2 it is now an altcoin.

we've been told that one of the benefits of SC's is in crushing altcoins.  if the current network effects are already doing that, and i agree that they are, that takes away a major argument to implement them.

NL's point is that this severing of the path back to BTC will create losers and thus destroy confidence, not only for the loser's themselves, but for the rest of us potentially.

[brg444]

Confusion between "did Bitcoin fail me and lose my coins or did a Sidecoin fail me and lose my coins" is a very legitimate issue. I'm worried about this also.

I think a lot of side chains will be seen as services beyond the main chain. For example today if one wants to anonymize coins they need to go use some sort of mixing service, if they lose their coins in the process the service takes the blame though, not bitcoin. I think sidechains will be the same, people have bitcoins and then decided to use some anonymous sidechain service, if they lose their coins I think it will be clear it was the sidechain / service at fault.

If a sidechain is integrated into Bitcoin-qt or blockchain.info to the extent that you're not even aware of the sidechain being used, then I can see the scenario you're describing as being confusing and damaging to Bitcoin. But I think SC's will be implemented in a manner that it is clear when they are being used.

At least that is my expectation / hope.

Sidechains are like Bitcoin companies/services. If you decide to trust some shady one because it promises unconvential returns or features then you expose yourself to the underlying risk that they disappear with your money.

When we get to "ordinary people" using Bitcoin, established sidechains that have been carefully reviewed and vetted by the community will be available and should serve any conventional need that a consumer might want. My guess is that at this point they are not even referred to as "sidechains" but Bitcoin "applications" or services.

If one decides to step outside of this "safe" environment and experience more obscure services/sidechains then he should proceed with caution much like he should be doing when dealing with less renowned companies.

[cypherdoc]

So do I understand that you agree with me that a new risk is not introduced? There is always an inherent risk when trusting your Bitcoins to be somewhere else than on the blockchain.

Now to be completely fair, does Sidechain offer new schemes that could potentially abuse and profit from this risk? Probably. But from my point of view this is the nature of the beast : as the technology evolves so does the potential for more elaborate scams.

no i don't agree.  i think NL's example is a good one showing increased risk.

ordinary ppl won't necessarily understand the bolded statement as you presume.

Confusion between "did Bitcoin fail me and lose my coins or did a Sidecoin fail me and lose my coins" is a very legitimate issue. I'm worried about this also.

I think a lot of side chains will be seen as services beyond the main chain. For example today if one wants to anonymize coins they need to go use some sort of mixing service, if they lose their coins in the process the service takes the blame though, not bitcoin. I think sidechains will be the same, people have bitcoins and then decided to use some anonymous sidechain service, if they lose their coins I think it will be clear it was the sidechain / service at fault.

If a sidechain is integrated into Bitcoin-qt or blockchain.info to the extent that you're not even aware of the sidechain being used, then I can see the scenario you're describing as being confusing and damaging to Bitcoin. But I think SC's will be implemented in a manner that it is clear when they are being used.

At least that is my expectation / hope.

i need to understand better where you're coming from in terms of your blockchain views.  is what you're saying today consistent with what you said here?:

https://bitcointalk.org/index.php?topic=68655.msg9459338#msg9459338

[brg444]

we've been told that one of the benefits of SC's is in crushing altcoins.  if the current network effects are already doing that, and i agree that they are, that takes away a major argument to implement them.

NL's point is that this severing of the path back to BTC will create losers and thus destroy confidence, not only for the loser's themselves, but for the rest of us potentially.

 

please don't be so shallow. SC's were absolutely not created in order to "crush" altcoins. neither is it a "major" argument to implement them. the reasoning is that once implemented it should discourage the creation of alt-scams and refocus the energy of developers on innovation within Bitcoin's ecosystem.

[cypherdoc]

we've been told that one of the benefits of SC's is in crushing altcoins.  if the current network effects are already doing that, and i agree that they are, that takes away a major argument to implement them.

NL's point is that this severing of the path back to BTC will create losers and thus destroy confidence, not only for the loser's themselves, but for the rest of us potentially.

 

please don't be so shallow. SC's were absolutely not created in order to "crush" altcoins. neither is it a "major" argument to implement them. the reasoning is that once implemented it should discourage the creation of alt-scams and refocus the energy of developers on innovation within Bitcoin's ecosystem.

lol, i guess i'm hearing things.

[cypherdoc]

Confusion between "did Bitcoin fail me and lose my coins or did a Sidecoin fail me and lose my coins" is a very legitimate issue. I'm worried about this also.

I think a lot of side chains will be seen as services beyond the main chain. For example today if one wants to anonymize coins they need to go use some sort of mixing service, if they lose their coins in the process the service takes the blame though, not bitcoin. I think sidechains will be the same, people have bitcoins and then decided to use some anonymous sidechain service, if they lose their coins I think it will be clear it was the sidechain / service at fault.

If a sidechain is integrated into Bitcoin-qt or blockchain.info to the extent that you're not even aware of the sidechain being used, then I can see the scenario you're describing as being confusing and damaging to Bitcoin. But I think SC's will be implemented in a manner that it is clear when they are being used.

At least that is my expectation / hope.

Sidechains are like Bitcoin companies/services. If you decide to trust some shady one because it promises unconvential returns or features then you expose yourself to the underlying risk that they disappear with your money.

When we get to "ordinary people" using Bitcoin, established sidechains that have been carefully reviewed and vetted by the community will be available and should serve any conventional need that a consumer might want. My guess is that at this point they are not even referred to as "sidechains" but Bitcoin "applications" or services.

If one decides to step outside of this "safe" environment and experience more obscure services/sidechains then he should proceed with caution much like he should be doing when dealing with less renowned companies.

Odalv, you need to bring us some imagination!

[brg444]

we've been told that one of the benefits of SC's is in crushing altcoins.  if the current network effects are already doing that, and i agree that they are, that takes away a major argument to implement them.

NL's point is that this severing of the path back to BTC will create losers and thus destroy confidence, not only for the loser's themselves, but for the rest of us potentially.

 

please don't be so shallow. SC's were absolutely not created in order to "crush" altcoins. neither is it a "major" argument to implement them. the reasoning is that once implemented it should discourage the creation of alt-scams and refocus the energy of developers on innovation within Bitcoin's ecosystem.

lol, i guess i'm hearing things.

You're not, you just need to be a little more honest in your arguments.

[cypherdoc]

we've been told that one of the benefits of SC's is in crushing altcoins.  if the current network effects are already doing that, and i agree that they are, that takes away a major argument to implement them.

NL's point is that this severing of the path back to BTC will create losers and thus destroy confidence, not only for the loser's themselves, but for the rest of us potentially.

 

please don't be so shallow. SC's were absolutely not created in order to "crush" altcoins. neither is it a "major" argument to implement them. the reasoning is that once implemented it should discourage the creation of alt-scams and refocus the energy of developers on innovation within Bitcoin's ecosystem.

lol, i guess i'm hearing things.

You're not, you just need to be a little more honest in your arguments.

i've heard the "solution to altcoins" argument at least a dozen times.   

[cypherdoc]

look everyone!  a Free Lunch! Cashcoin!

[cypherdoc]

looks like it can give you everything you can possibly want:

[brg444]

i've heard the "solution to altcoins" argument at least a dozen times.   

And it absolutely might be true but do you really think the guys Blockchain, when developing sidechains, were like : "These damn altcoins! We'll show em!" 

The "major" argument is that the innovation of sidechain make most altcoins irrelevant but allow us to conserve their original intended purpose which was to innovate on top of Bitcoin.

To say "oh well network effect was taking care of that anyway so no need for sidechains" is shortsighted at best.

[Adrian-x]

Confusion between "did Bitcoin fail me and lose my coins or did a Sidecoin fail me and lose my coins" is a very legitimate issue. I'm worried about this also.

I think a lot of side chains will be seen as services beyond the main chain. For example today if one wants to anonymize coins they need to go use some sort of mixing service, if they lose their coins in the process the service takes the blame though, not bitcoin. I think sidechains will be the same, people have bitcoins and then decided to use some anonymous sidechain service, if they lose their coins I think it will be clear it was the sidechain / service at fault.

If a sidechain is integrated into Bitcoin-qt or blockchain.info to the extent that you're not even aware of the sidechain being used, then I can see the scenario you're describing as being confusing and damaging to Bitcoin. But I think SC's will be implemented in a manner that it is clear when they are being used.

At least that is my expectation / hope.

Sidechains are like Bitcoin companies/services. If you decide to trust some shady one because it promises unconvential returns or features then you expose yourself to the underlying risk that they disappear with your money.

When we get to "ordinary people" using Bitcoin, established sidechains that have been carefully reviewed and vetted by the community will be available and should serve any conventional need that a consumer might want. My guess is that at this point they are not even referred to as "sidechains" but Bitcoin "applications" or services.

If one decides to step outside of this "safe" environment and experience more obscure services/sidechains then he should proceed with caution much like he should be doing when dealing with less renowned companies.

I can always blame Bitcoin companies/service, but how do you hold a decentralized P2P MM SC responsible, when you are entrusting your coins to a decentralized protocol run on p2p network, not a Bitcoin companies/service, in this scenario SC failure is a Bitcoin Failure. if you are introducing billions of these SC, companies will try to reduce liability by issuing a SC MM independent prototypical - "they dont make mistakes it was a fault of the protocol", the risk of failure grows exponentially as more SC come on board.  Alts are not a treat anyway, the goal is may the best money win, and bitcoin is such a quantum jump from what we had, Alts are an incremental improvement.  

[brg444]

look everyone!  a Free Lunch! Cashcoin!

 

looks legit, would invest +1

[brg444]

Confusion between "did Bitcoin fail me and lose my coins or did a Sidecoin fail me and lose my coins" is a very legitimate issue. I'm worried about this also.

I think a lot of side chains will be seen as services beyond the main chain. For example today if one wants to anonymize coins they need to go use some sort of mixing service, if they lose their coins in the process the service takes the blame though, not bitcoin. I think sidechains will be the same, people have bitcoins and then decided to use some anonymous sidechain service, if they lose their coins I think it will be clear it was the sidechain / service at fault.

If a sidechain is integrated into Bitcoin-qt or blockchain.info to the extent that you're not even aware of the sidechain being used, then I can see the scenario you're describing as being confusing and damaging to Bitcoin. But I think SC's will be implemented in a manner that it is clear when they are being used.

At least that is my expectation / hope.

Sidechains are like Bitcoin companies/services. If you decide to trust some shady one because it promises unconvential returns or features then you expose yourself to the underlying risk that they disappear with your money.

When we get to "ordinary people" using Bitcoin, established sidechains that have been carefully reviewed and vetted by the community will be available and should serve any conventional need that a consumer might want. My guess is that at this point they are not even referred to as "sidechains" but Bitcoin "applications" or services.

If one decides to step outside of this "safe" environment and experience more obscure services/sidechains then he should proceed with caution much like he should be doing when dealing with less renowned companies.

I can always blame Bitcoin companies/service, but how do you hold a decentralized P2P MM SC responsible, when you are entrusting your coins to a decentralized protocol run on p2p network, not a Bitcoin companies/service, in this scenario SC failure is a Bitcoin Failure. if you are introducing billions of these SC, companies will try to reduce liability by issuing a SC MM independent prototypical - "they dont make mistakes it was a fault of the protocol", the risk of failure grows exponentially as more SC come on board.  Alts are not a treat anyway, the goal is may the best money win, and bitcoin is such a quantum jump from what we had, Alts are an incremental improvement.  

I understand where you're coming from but I didn't see "blame" putting the cash back in the pocket of MtGox, Moolah, etc customers.

At the end of the day the money is lost and most of the blame is on the user for not properly assessing the risks.

[cypherdoc]

look everyone!  a Free Lunch! Cashcoin!

 

looks legit, would invest +1

the point is, there are plenty of ppl who will.