Gold collapsing. Bitcoin UP.

[tvbcof]

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

Note that Bitcoin itself could be supported with one CPU miner provided that it is not attacked.

As I've mentioned before, trying to out-run the threat of potential mining attack is as futile as a hamster running on a wheel.  Successful sidechains will almost certainly need to evolve other protection modes than simplistic gross sha256 hashing power.  The best hope for Bitcoin to mitigate the inevitable reality that mining becomes unprofitable is that sidechains offer money-making opportunities for miners which are more lucrative than attacking Bitcoin itself.

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[Odalv]

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

:-) maybe you can re-read this thread (last 300 pages)

 -  (hint) ... we can use oracles. => useful oracle is TIMESTAMP server => it is possible to use Bitcoin as TIMESTAMP server .. (counterparty uses already)

 - there are more solutions what does not require MM

[cypherdoc]

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

:-) maybe you can re-read this thread (last 300 pages)

 -  (hint) ... we can use oracles. => useful oracle is TIMESTAMP server => it is possible to use Bitcoin as TIMESTAMP server .. (counterparty uses already)

 - there are more solutions what does not require MM

lol, you don't think i've talked already about federated servers about 100x now?

[cypherdoc]

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

Note that Bitcoin itself could be supported with one CPU miner provided that it is not attacked.

As I've mentioned before, trying to out-run the threat of potential mining attack is as futile as a hamster running on a wheel.  Successful sidechains will almost certainly need to evolve other protection modes than simplistic gross sha256 hashing power.  The best hope for Bitcoin to mitigate the inevitable reality that mining becomes unprofitable is that sidechains offer money-making opportunities for miners which are more lucrative than attacking Bitcoin itself.

wow, i didn't think our view of mining diverged so greatly.  POW is the only solution, imo, and we've certainly seen no evidence that any entity is willing to take the gamble to attack Bitcoin.

if we don't screw it up, we can expect tx volumes and fees to continuing setting new highs, just like we're seeing now which will replace block rewards.

but we need outsiders to buy BTC.

[thezerg]

The same value can not be held simultaneously in the main chain and in a side chain.

But the value of the sidechain is derived from the mainchain and so the scarcity and ledger is respected.

This is a very interesting theoretical question: "where is the value stored for a sidechain?"  

blah blah blah

Wow, you can describe all that in one line:  The price change will be proportional to the flow derivative.  

In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise.  If BTC is moving out of the sidechain the price will fall.

If you are still confused think about modelling it.  You would best model this by creating "value" as an immaterial quantity.  Each chain HAS a value (essentially a market cap, which is price * quantity), based on its usefulness.  If 2 chains are pegged, changes to the value cannot be expressed in price, so quantity must change -- that is BTC is transmuted from one chain to another.  If 2 chains are not pegged, changes to the value cannot be expressed by moving quantity so price must change.  This idea is fundamental; it applies to all commodities and products where you can transform one to another.

the whole point that Peter R is trying to make is that with SC's, value gets "shared" btwn MC and all SC's.  with the potential of being "severed" or "fragmented".  

we don't want that with Bitcoin.  we want it ALL on the mainchain.  we want all outsiders to be forced to "buy in" to BTC for their seat at the table.

who here wants to share value with Truthcoin?

Cypherdoc your reasoning is completely flawed.  First of all, I know that you aren't an engineer, but you still you should be able to understand  that it CANT be ALL on the mainchain.  There are diametrically opposed requirements.  Like anonymity vs. public spending accountability.  Like handling vast numbers of txns per second vs. keeping all transactions forever.  Like blockchain spam vs. document timestamping.  There are plenty of things with diametrically opposed requirements in life, like sleeping (darkness) and reading a book (bright light); its unrealistic to imagine no 2 applications will emerge in a space which covers the entire concept of economic activity.

Why have all prior altcoins failed?  Simply because they're all essentially the same.  Different POW?  Come on, what end user cares?  Bitcoin 2.0 (assets)?  Colored coins is good enough, but the market is not mature enough for anyone to care right now.  

You may argue that there will never emerge a use case that is both compelling and that Bitcoin cannot handle.  Ok in that case there will be no sidechains, because Metcalf's law, etc and so the functionality will simply sit unused, and eventually be deprecated.  There is no drawback to this.

But if a use case DOES emerge, the only way to pull that value into Bitcoin is via sidechains -- because with a sidechain the Bitcoin 21million scarcity token can be applied to that use case.

You need to contemplate what you cannot contemplate, not make decisions only based on what you know.

So the ONLY way to get "all outsiders to be forced to "buy in" to BTC for their seat at the table" is via sidechains.

[Odalv]

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

:-) maybe you can re-read this thread (last 300 pages)

 -  (hint) ... we can use oracles. => useful oracle is TIMESTAMP server => it is possible to use Bitcoin as TIMESTAMP server .. (counterparty uses already)

 - there are more solutions what does not require MM

lol, you don't think i've talked already about federated servers about 100x now?

Is TIMESTAMP server(Bitcoin) the federated server ? (hint => NOT)

[Odalv]

how is it even possible to have thousands of spvp SC's when there are not enough resources to MM all of them?  and even then, they're not secure.

:-) maybe you can re-read this thread (last 300 pages)

 -  (hint) ... we can use oracles. => useful oracle is TIMESTAMP server => it is possible to use Bitcoin as TIMESTAMP server .. (counterparty uses already)

 - there are more solutions what does not require MM

lol, you don't think i've talked already about federated servers about 100x now?

Is TIMESTAMP server(Bitcoin) the federated server ? (hint => NOT)

Maybe you wish to send me 2 BTC and I will TIMESTAMP forever on bitcoin-main-chain that "cypherdoc is ... " :-)  DONOR.

[cypherdoc]

The same value can not be held simultaneously in the main chain and in a side chain.

But the value of the sidechain is derived from the mainchain and so the scarcity and ledger is respected.

This is a very interesting theoretical question: "where is the value stored for a sidechain?"  

blah blah blah

Wow, you can describe all that in one line:  The price change will be proportional to the flow derivative.  

In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise.  If BTC is moving out of the sidechain the price will fall.

If you are still confused think about modelling it.  You would best model this by creating "value" as an immaterial quantity.  Each chain HAS a value (essentially a market cap, which is price * quantity), based on its usefulness.  If 2 chains are pegged, changes to the value cannot be expressed in price, so quantity must change -- that is BTC is transmuted from one chain to another.  If 2 chains are not pegged, changes to the value cannot be expressed by moving quantity so price must change.  This idea is fundamental; it applies to all commodities and products where you can transform one to another.

the whole point that Peter R is trying to make is that with SC's, value gets "shared" btwn MC and all SC's.  with the potential of being "severed" or "fragmented".  

we don't want that with Bitcoin.  we want it ALL on the mainchain.  we want all outsiders to be forced to "buy in" to BTC for their seat at the table.

who here wants to share value with Truthcoin?

Cypherdoc your reasoning is completely flawed.  First of all, I know that you aren't an engineer, but you still you should be able to understand  that it CANT be ALL on the mainchain.  There are diametrically opposed requirements.  Like anonymity vs. public spending accountability.  Like handling vast numbers of txns per second vs. keeping all transactions forever.  Like blockchain spam vs. document timestamping.  There are plenty of things with diametrically opposed requirements in life, like sleeping (darkness) and reading a book (bright light); its unrealistic to imagine no 2 applications will emerge in a space which covers the entire concept of economic activity.

Why have all prior altcoins failed?  Simply because they're all essentially the same.  Different POW?  Come on, what end user cares?  Bitcoin 2.0 (assets)?  Colored coins is good enough, but the market is not mature enough for anyone to care right now.  

You may argue that there will never emerge a use case that is both compelling and that Bitcoin cannot handle.  Ok in that case there will be no sidechains, because Metcalf's law, etc and so the functionality will simply sit unused, and eventually be deprecated.  There is no drawback to this.

But if a use case DOES emerge, the only way to pull that value into Bitcoin is via sidechains -- because with a sidechain the Bitcoin 21million scarcity token can be applied to that use case.

You need to contemplate what you cannot contemplate, not make decisions only based on what you know.

So the ONLY way to get "all outsiders to be forced to "buy in" to BTC for their seat at the table" is via sidechains.

my position is that Bitcoin should only be used as Money.  all other services should simply use Bitcoin as money.  Bitcoin should not have to build in any other services.

is that consistent with your model?  it doesn't sound like it.

[Peter R]

This is a very interesting theoretical question: "where is the value stored for a sidechain?"  

blah blah blah

Wow, you can describe all that in one line:  The price change will be proportional to the flow derivative.  

In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise.  If BTC is moving out of the sidechain the price will fall.

What you said above doesn't give any value to convertibility.  Like NewLiberty said, the value for scBTC is:

   value = convertibility + utility/network effect.

If you permanently break the peg (convertibility), the value of scBTC will immediately drop (at least in Cases 1 and 2), regardless of the direction of the flow.  

[Odalv]

This is a very interesting theoretical question: "where is the value stored for a sidechain?"  

blah blah blah

Wow, you can describe all that in one line:  The price change will be proportional to the flow derivative.  

In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise.  If BTC is moving out of the sidechain the price will fall.

What you said above doesn't give any value to convertibility.  Like NewLiberty said, the value for scBTC is:

   value = convertibility + utility/network effect.

If you permanently break the peg (convertibility), the value of scBTC will immediately drop (at least in Cases 1 and 2), regardless of the direction of the flow.  

I feel convertibility (2wp works) same as if you did not break ECDSA then convertibility works. (sorry, I'm not natural speaker)

[Erdogan]

Of course none of the elemental properties of gold were changed to create gold "side chains" and that is why we should go the federated route with bitcoin.

i think this is where we agree; if we are going to use SC's at all.  of course, there's always OT as well.

Yes.  If it ain't broke, don't fix it.

Bingo!  we have a Winner!

If you look at Peter R's three scenarios and my comments (I hoped someone else would point this out...) there is not really that much difference between sidechains and altcoins. The sidechains' promoters just want to get a flying start. In my opinion, they won't. The economics does not support it.

[cypherdoc]

Of course none of the elemental properties of gold were changed to create gold "side chains" and that is why we should go the federated route with bitcoin.

i think this is where we agree; if we are going to use SC's at all.  of course, there's always OT as well.

Yes.  If it ain't broke, don't fix it.

Bingo!  we have a Winner!

If you look at Peter R's three scenarios and my comments (I hoped someone else would point this out...) there is not really that much difference between sidechains and altcoins. The sidechains' promoters just want to get a flying start. In my opinion, they won't. The economics does not support it.

i think you may be right.  see this convo i had with MrMadden on Reddit:

http://www.reddit.com/r/Bitcoin/comments/2m6r10/forget_currency_bitcoin_tech_could_disrupt/cm44rfd?context=10000

[brg444]

but sidechains are not competitors 

The same value can not be held simultaneously in the main chain and in a side chain.

But the value of the sidechain is derived from the mainchain and so the scarcity and ledger is respected.

This is a dud answer that illustrates a lack of understanding. Value is subjective one only makes value judgments, one choose to where value is greatest. It's not just scarcity that makes Bitcoin valuable, we know this because equal Altcoins with the same features can have no value.

It's the network that is created by incentive structure that creates bitcoins value. SideChain change the incentive structure.

In your ignorance you agree but you don't prove that one can create economic energy from nothing you assume that to be true. The value that is Bitcoin isn't about to die (it's FUD to say SC "are the last hope"), it's dependent on it's existing incentive structure to grow, investment in infrastructure or wealth.

 

The point, if you were really too dense to get it, is that sidechains do not create or support value until value is transferred to them from the mainchain.

It seems you also did not process my "scarcity" comment.. Oh well...

I have argued that sidechain potentially improve the miners incentive and secure it in the future. You have conveniently chose not to adress any of these argument and so until then it seems a bit disingenous for you to continue parading the same concern.

it's dependent on it's existing incentive structure to grow

And that is exactly the proposition made by sidechains

[cypherdoc]

RUT turning down again.  Dow and Transports peaking out in a Megaphone?

[Erdogan]

The significance of the peg on the volume of scBTC: I really think it is important to rub it in.

Two real life examples:

If you peg something higher than its natural market value, you get a situation like the one with the cars on Cuba (you don't get them).

If you peg something lower than its natural market value, you get a situation like the one with gasoline in Venezuela, where everybody use gas guzzling cars (tendency to transform money to gasoline) and smuggling to the neighbour country.

Again, with money: When you peg the peso to a higher value (compared to its natural value which is the dolar blue rate), everybody wants to transform their pesos (the scBTC) to dollars (the BTC) (they can't transform all, because of currency controls, but they would if they could).

With a peg that is higher than the natural price, which necessarily is the situation with scBTC at kickoff, they will have a hard time intializing the sidechain. I don't think sidechain promoters understand this.

[brg444]

whenever we get proposals to "fix Bitcoin" as we are currently getting with SC's, it's often helpful to step back to before the proposal to help reassess where we actually.  below is a talk by Daniel Krawiscz, whose views very much correspond to mine.  listen carefully and realize everything is just fine and there is nothing to panic about by making rash changes to the protocol.  other points that struck me in this talk are:

https://www.youtube.com/watch?v=iKRH_zxpdjM

1.  OT appears to be a better federated system in that it doesn't require another currency and doesn't require an spvp change to the protocol which would "siphon off" BTC value from its blockchain.

 

That's your usual federated server model right there. A "better" one? Conventional federated sidechains do not require another currency or spvp change to the protocol.

I'm not sure what your point is

2.  he, and Balaji Srinivasan here, https://www.youtube.com/watch?v=cOubCHLXT6A, both advocate "exiting the system" principles if you are dissatisfied with your current existing fiat system.  exiting the current system implies that there is another new and secure system to which you can flee which will protect you.  since this is high risk, this system would have to be a Self Contained Financial System that is secure, reliable, and firewalled off from outside intervention.  ideally, it would be a public good, not subject to improprieties or vested interests that might be motivated to "profit" off said system.  this system, as it currently and already stands, is Bitcoin.  its transactional units are inextricably linked to its blockchain for maximum impenetrable security.

Sidechains are within Bitcoin's "self contained financial system".

3.  i think the reason you're hearing such common calls for the "blockchain" as distinct and removed from its "currency unit" is b/c the outside public intuitively realizes that if left as is, Bitcoin fundamentally disrupts the current fiat system.  they can conceptually "understand" a blockchain as new "tech" while rejecting the currency unit.  it also allows them to continue to "resist" buying a seat at the table by using cold hard cash or trading something of great value for BTC.  if you can subvert the system by changing the rules, ie the protocol, to break the inextricable link, then you can "attract" value out of the Bitcoin system and convert or transform that value into all manner of inflationary, speculative assets.  this is what the spvp or 2wp does.  we don't want that.

You don't need sidechains to do so. Value in Bitcoin can be attracted to all kind of inflationary schemes as is.

i view the spvp as a breach in that system, like a leaky valve or offramp thru which real value can be siphoned off and transformed into all manner of speculative assets.  this is a problem.  guys like brg444 have already shown their cards that Bitcoin "is broken" and if you just insert this "funnel" or 2wp (spvp) into the walls of what now is an impenetrable system, it will make it "better".  i think this is fundamentally wrong and is a major flaw in the Blockstream WP.  the mere insertion of this funnel will break Bitcoin's Sound Money principles as it allows an offramp into all manner of insecure, alternative ledger systems (fake blockchains).  if we can know ahead of time that it "might" be a problem, why insert it?  it's not enough to say, "let's just let them put it in and see what happens".  if they're wrong, and i am right, it will destroy the system as it erodes confidence that we indeed have a secure firewalled off Bitcoin not subject to for-profit opportunities and structural weakness.

You still don't get it.... SPVP does NOT introduce the off ramp. SPVP is a proof verification mechanism. Federated model sidechains can be created without SPVP and act as the SAME "leaky valve of offramp thru which real value can be siphoned off". So consider that your "problem" exists already.

[brg444]

you want these guys to "buy in" to the Bitcoin system buy purchasing BTC units which they can then use for their own purposes.  you don't want them to "siphon" value out of Bitcoin by breaking its Sound Money principles by breaking the link btwn the currency unit and its blockchain.

i know you know this but i'm just clarifying how i see these developments.

 

You never fail to surprise me with your stupidity.

Venture Capitalists do not exist to make speculative bets on assets/commodity/money.

They exist for the sole reason of developing businesses and infrastructure. You can be quite certain they ARE investing in Bitcoin through their personal portfolio. Their job is not to do it through their clients' investment.

The Sound Money principles of Bitcoin are broken as is by the existence of federated sidechains. Value can be siphonned through these off ramps any moment one is created.

Sold your Bitcoins yet?

[brg444]

an analogy to the self contained financial system that i envision with Bitcoin is gold.

there is a finite amount of gold circulating throughout the world.  it's stored, it's used, it's supply is theoretically immutable.  none of it gets "transformed" to other speculative assets at any time.  and for 5000 yrs it served as the basis for a sound money system.  

by promoting the transformation of BTC units over to "different less secure ledgers" which now seems to be accepted here by even brg444, how is Bitcoins Sound Money function sustained?

You are promoting the transfer of BTC units to even less secured, more centralized ledger that are infinitely more suspect to inflating the users' value.

How does THIS support Bitcoins' Sound Money function?

You analogy to gold is quite ridiculous I should say. "None of it gets transformed to other speculative assets at any time" Are you kidding me? Did you forget maybe about the existence of gold-backed paper currency !?

[molecular]

TC is a pathetic example and an obvious scam that will attract so much suckers before it gets exposed.

TC in this statement is TruthCoin.

brg444 This guy has a much better take on what SC are than you.
He understand the mining incentives that make Bitcoin, the only scam he's pulling is capitalizing on the inflation effect offered by the idea of SC's, someone who gets mining like this and looks for a win win without addressing the effect the proposed protocol change will have on mining incentives is a businessman, he isn't the scanner you think he is. We'll see thousand of these  

brg444 read the article you may learn something please address all criticism on the appropriate blog, feel free to invite my input over there if you like.

http://www.truthcoin.info/blog/pow-and-mining/

burterins arguments against the paper:

https://www.reddit.com/user/vbuterin

your link is now confusing because of new comments in other threads he wrote.

here's his main rebuttal: https://www.reddit.com/r/Bitcoin/comments/2miytv/long_live_proofofwork_long_live_mining/cm4tr3f

[brg444]

bang on. also explains the long bull market, metaphorically, VC,s will get to a stage like early mining, at some point its better to invest in BTC than it is to try and make earn it.
the idea isn't to disrupt the economy, its to disrupt the financial system used to run the economy.

Bitcoin is a risk distribution virus, more powerful than any biological weapon, it assimilates and leave a working economy in its wake, all we have to do is protect the DNA that makes it work, punting economic energy into Bitcoin is how it grows.  

VCs will never resort to solely buying BTC. This is an asinine proposition which defeats the whole purpose of their existence.