Gold collapsing. Bitcoin UP.

[Zangelbert Bingledack]

Yes but then you create two competing chains that work against each others network effect.

It is also different from sidechains because then you have to decide whether or not to use the feature of, say, your Monero spin-off.

The competing network effects may be a drawback, but not that much compared to the peace of mind of knowing your wealth is secure no matter which platform wins.

As you have mentioned above, you can't benefit from your wealth unless you spend it. The point of sidechains is not only to ensure your stake in the ledger but to be able to use it in different ways that are not possible on the mainchain.

Right, but the simple act of converting your stake into a house, bars of gold, cars, etc. doesn't require any special functionality beyond what Bitcoin already is.

The store of value function is surprisingly way more valuable than anything else, like by an order of magnitude (consider total world gold value). It's not just another way to use money.

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[brg444]

I suppose whether or not it deprecates the money function comes down to the exact nature of the change to the protocol.

"Devs gotta dev" means we should see more and more big projects doing amazing futuristic things that really end up going nowhere since they are way too advanced. It also presumably means VCs and other investors will "follow the shiny thing" until it burns them enough (too many investments in Bitcoin 2.0 that vaporize), and that could be what Austin Hill is doing now. However, it seems you're worried about the collateral damage in the meantime. Is that right?

yes.

and i think SC's deviate from Satoshi's original vision for Bitcoin as Money.  a digital gold standard so to speak.

I'm still wondering why things like Counterparty don't mess up the mining incentives. If a huge amount of stock value is riding on Bitcoin doesn't that potentially make an attack more attractive than the miners can get paid to defend against (since they're only getting paid based on the bitcoin price, rather than all the stock value)?

Also, I can see that SCs could mean miners don't get paid enough in tx fees in the future, but couldn't the same problem arise from off-chain transaction mechanisms in general?

I adressed this notion here, not sure if you saw it.

From my point of view. SPVP Sidechains that enable merged-mining are in fact bringing balance to this issue of transaction fees emigrating to different, off-chain schemes.

So far the only option to accomodate transactions types that are not implementable in the mainchain had been these off-chain schemes that effectively present this very danger of moving transactions off-chain and out of reach of potentially underfunded miners.

SPVP Sidechains will not negate this aspect but they introduce an alternative for the market. The likely outcome is that any chain that gain significant adoption from the market and therefore require the "ultimate" security model will be picked up by miners and that way these transactions will not "escape" them.

This is why I argue that lost incentives to off-chain schemes might be potentially more dangerous than a change to the incentive model (Adrian's concern)

[cypherdoc]

I suppose whether or not it deprecates the money function comes down to the exact nature of the change to the protocol.

"Devs gotta dev" means we should see more and more big projects doing amazing futuristic things that really end up going nowhere since they are way too advanced. It also presumably means VCs and other investors will "follow the shiny thing" until it burns them enough (too many investments in Bitcoin 2.0 that vaporize), and that could be what Austin Hill is doing now. However, it seems you're worried about the collateral damage in the meantime. Is that right?

yes.

and i think SC's deviate from Satoshi's original vision for Bitcoin as Money.  a digital gold standard so to speak.

I'm still wondering why things like Counterparty don't mess up the mining incentives. If a huge amount of stock value is riding on Bitcoin doesn't that potentially make an attack more attractive than the miners can get paid to defend against (since they're only getting paid based on the bitcoin price, rather than all the stock value)?

Also, I can see that SCs could mean miners don't get paid enough in tx fees in the future, but couldn't the same problem arise from off-chain transaction mechanisms in general?

back up a step.  miners get paid to insert those CP records into satoshi tx's in the first place which incentivizes mining growth and thus more security and thus less chance for subsequent attack on those same satoshi tx's.  now move all these CP tx fees off to a SC that can't be MM'd.  this deprecates the MC.  and there will be thousands of these insecure SC's as i think only a few SC's will be MM'd due to mining capacity constraints.

yes, offchain tx's take away from mining fees.  but SC's will open up a whole new avenue of risk by not only competing at the mining level for tx fees but also competing for BTC units and competing for new investment fiat that now suddenly has a whole menu of assets from which to choose from when contemplating investing into the "Bitcoin trading platform".

[cypherdoc]

I believe cypher is correct that in order to succeed the only think you need in society is trust less money, all other relationships depend on that one thing.  

yes, if we solve the money problem, we solve everything.

[Zangelbert Bingledack]

I'm still wondering why things like Counterparty don't mess up the mining incentives. If a huge amount of stock value is riding on Bitcoin doesn't that potentially make an attack more attractive than the miners can get paid to defend against (since they're only getting paid based on the bitcoin price, rather than all the stock value)?

Also, I can see that SCs could mean miners don't get paid enough in tx fees in the future, but couldn't the same problem arise from off-chain transaction mechanisms in general?

I adressed this notion here, not sure if you saw it.

From my point of view. SPVP Sidechains that enable merged-mining are in fact bringing balance to this issue of transaction fees emigrating to different, off-chain schemes.

So far the only option to accomodate transactions types that are not implementable in the mainchain had been these off-chain schemes that effectively present this very danger of moving transactions off-chain and out of reach of potentially underfunded miners.

SPVP Sidechains will not negate this aspect but they introduce an alternative for the market. The likely outcome is that any chain that gain significant adoption from the market and therefore require the "ultimate" security model will be picked up by miners and that way these transactions will not "escape" them.

This is why I argue that lost incentives to off-chain schemes might be potentially more dangerous than a change to the incentive model (Adrian's concern)

I tend to think Bitcoin will eventually be forced to change its method of paying miners (either through increased inflation or higher tx fees), as detailed in https://bitcointalk.org/index.php?topic=68655.msg9458351#msg9458351

Since that's far in the future, though, I'm not in a rush. The nature of sounding the alarm about "danger on the horizon" is that sometimes the alarm is itself the greater source of danger. I worry that the current popularity of sidechains is partly a reaction to the price decline and fears about altcoins, scalability, etc. If we worry so much about such things and then mess with the core protocol, the cure might be worse than the disease, especially if the disease was really just a phantom. This dynamic goes on in many aspects of Bitcoin, which may be why the devs are usually pretty conservative. However, that conservatism itself has been seen as a danger, so...

[NewLiberty]

I have referred to this situation as the ledger being distributed on multiple chains instead of sitting on a single one.

This notion has potentially positive implications for the preservation of the ledger : a single Blockchain is a single point of failure.

This probably isn't the point you were trying to make here.
You should realize that this single point of failure issue is compounded rather than being resolved by side chains.  
Each SPV link creates an additional failure point in that model, each of them being only as secure as the weakest predecessor.

(If MC fails, SC₁ fails to the degree that SC₁ value is derived from MC and etc.)

I'm a fan of side chains.  I love the potential it offers.  I'm also a fan of Blockstream.  These are heroes of the first order.

A hero ventures forth from the world of common day into a region of supernatural wonder.
Fabulous forces are there encountered and a decisive victory is won.
The hero comes back from this adventure with the power to bestow boons on his fel­low man.

However to succeed, against some of the most powerful adversaries that we know of, the challenges are not small ones.  
The victory is not pre-ordained.  If we do not look for the pitfalls, and only look at the beautiful horizons, we will end up in the pit... with spikes through our necks.

Recognizing and examining the problems is part of what makes the adventure more likely to succeed.  It also helps folks to see what this can do.

...
"The Ledger" in this context is a marketing term so I don't know if it refers to everything on any block chain anywhere, or the just Bitcoin block chain, or Bitcoin plus SCs (so long as the SPV is working), but then it becomes two ledgers if it stops working, or a chain dies...  
It can mean whatever you want it to mean, but that just makes the term meaningless for anyone else.

Side chains do present a clear and present danger for Bitcoin.  They also offer some extremely powerful advantages, but we can't hope to get any of those without dealing with the dangers.  There are just too many pits, and we should recognize that not everyone wants to see either Bitcoin or Side Chains succeed.

Like Adrian-s and cypherdoc, I do not think we NEED side chains for Bitcoin to succeed, so I like a cautious approach.  It is more important to do it right, than it is to do it.

[Zangelbert Bingledack]

yes, offchain tx's take away from mining fees.  but SC's will open up a whole new avenue of risk by not only competing at the mining level for tx fees but also competing for BTC units and competing for new investment fiat that now suddenly has a whole menu of assets from which to choose from when contemplating investing into the "Bitcoin trading platform".

I don't know what you mean by "competing for BTC units" since the chains don't really "get" the BTC units, more like just babysit them (unless the SC breaks).

As far as competing for investment fiat, aside from just the tx fees which are negligible right now, this seems to also apply to Counterparty. A stock, for example, by nature involves investing in a company rather than in bitcoins (or dollars). Someone could buy ASICMiner shares for fiat or buy paper DOW stock certificates for yuan, but I don't know if that's a bad thing for Bitcoin or the dollar, respectively. Sure the money doesn't go into the ledger, but eventually just having a stock market running on the ledger, at bottom, should bring a lot of value to that ledger.

[brg444]

Yes but then you create two competing chains that work against each others network effect.

It is also different from sidechains because then you have to decide whether or not to use the feature of, say, your Monero spin-off.

The competing network effects may be a drawback, but not that much compared to the peace of mind of knowing your wealth is secure no matter which platform wins.

As you have mentioned above, you can't benefit from your wealth unless you spend it. The point of sidechains is not only to ensure your stake in the ledger but to be able to use it in different ways that are not possible on the mainchain.

Right, but the simple act of converting your stake into a house, bars of gold, cars, etc. doesn't require any special functionality beyond what Bitcoin already is.

The store of value function is surprisingly way more valuable than anything else, like by an order of magnitude (consider total world gold value). It's not just another way to use money.

There is no peace of mind in a reality where there are multiple competing ledgers.

Replacing the trust anywhere there is currently counter-party or third-party intervention is invaluable IMO.

Yes it may be so that money is the most pressing issue in that concern but it does not address ALL trust relations. Bitcoin provides the chance to create an immutable historical record of EVERYTHING. Some use cases go way beyond financial aspects.

[brg444]

I'm still wondering why things like Counterparty don't mess up the mining incentives. If a huge amount of stock value is riding on Bitcoin doesn't that potentially make an attack more attractive than the miners can get paid to defend against (since they're only getting paid based on the bitcoin price, rather than all the stock value)?

Also, I can see that SCs could mean miners don't get paid enough in tx fees in the future, but couldn't the same problem arise from off-chain transaction mechanisms in general?

I adressed this notion here, not sure if you saw it.

From my point of view. SPVP Sidechains that enable merged-mining are in fact bringing balance to this issue of transaction fees emigrating to different, off-chain schemes.

So far the only option to accomodate transactions types that are not implementable in the mainchain had been these off-chain schemes that effectively present this very danger of moving transactions off-chain and out of reach of potentially underfunded miners.

SPVP Sidechains will not negate this aspect but they introduce an alternative for the market. The likely outcome is that any chain that gain significant adoption from the market and therefore require the "ultimate" security model will be picked up by miners and that way these transactions will not "escape" them.

This is why I argue that lost incentives to off-chain schemes might be potentially more dangerous than a change to the incentive model (Adrian's concern)

I tend to think Bitcoin will eventually be forced to change its method of paying miners (either through increased inflation or higher tx fees), as detailed in https://bitcointalk.org/index.php?topic=68655.msg9458351#msg9458351

Since that's far in the future, though, I'm not in a rush. The nature of sounding the alarm about "danger on the horizon" is that sometimes the alarm is itself the greater source of danger. I worry that the current popularity of sidechains is partly a reaction to the price decline and fears about altcoins, scalability, etc. If we worry so much about such things and then mess with the core protocol, the cure might be worse than the disease, especially if the disease was really just a phantom. This dynamic goes on in many aspects of Bitcoin, which may be why the devs are usually pretty conservative. However, that conservatism itself has been seen as a danger, so...

Fair enough, and my interest in sidechains were certainly not born from any reaction to price, altcoins, or scalability.

As for the post you refer to, I have previously expressed  my disagreement with the idea behind it

This is because successful sidechains would allow Bitcoin transactions to be disconnected from Bitcoin miners.

From where I stand the situation is exactly the opposite. Successful sidechains would enable Bitcoin miners to claim transactions fees that otherwise would be "hijacked" by off-chain schemes.

And if it so, would you not consider sidechains as a potentially viable solution to the problem you suggest (compared to inflation or higher tx fees)

[cypherdoc]

yes, offchain tx's take away from mining fees.  but SC's will open up a whole new avenue of risk by not only competing at the mining level for tx fees but also competing for BTC units and competing for new investment fiat that now suddenly has a whole menu of assets from which to choose from when contemplating investing into the "Bitcoin trading platform".

I don't know what you mean by "competing for BTC units" since the chains don't really "get" the BTC units, more like just babysit them (unless the SC breaks).

i view the 2wp as a "pass thru" from which scBTC arise on the other side.  these can then ride the SC themselves or be converted to InflataCoin or whatever.  in that sense, scBTC cannot be harvested for tx fees on MC.

As far as competing for investment fiat, aside from just the tx fees which are negligible right now, this seems to also apply to Counterparty. A stock, for example, by nature involves investing in a company rather than in bitcoins (or dollars). Someone could buy ASICMiner shares for fiat or buy paper DOW stock certificates for yuan, but I don't know if that's a bad thing for Bitcoin or the dollar, respectively. Sure the money doesn't go into the ledger, but eventually just having a stock market running on the ledger, at bottom, should bring a lot of value to that ledger.

maybe.

i just don't see it.  the other 6 billion just want stable money with SOV.  i know i do.  the deflationary nature of BTC itself means once fiat starts moving into Bitcoin it should send us to the moon.  that is the asymmetric bet most ppl are focused on when they say that.  it is a money thing.  i simply find all these other things incredibly distracting and risky.  and SC's violate "my" definition of the inextricable link.  

[brg444]

Like Adrian-s and cypherdoc, I do not think we NEED side chains for Bitcoin to succeed, so I like a cautious approach.  It is more important to do it right, than it is to do it.

I don't either, and my investment in BTC is not dependent on whether or not they will succeed as, as much as I disagree with cypherdoc, I do recognize the enormous potential if it can only achieve the status of a universal store-of-value and replace gold.

In some way this changes everything but I also see a potential for this immutable ledger to achieve much more.

[Adrian-x]

Imagine NXT as a SC, all big holders of Bitcoin could put there BTC there and earn interest. The fees could be cheaper than Bitcoin.

I am not a fan of PoS but I hold NXT for other reasons.

[brg444]

yes, offchain tx's take away from mining fees.  but SC's will open up a whole new avenue of risk by not only competing at the mining level for tx fees but also competing for BTC units and competing for new investment fiat that now suddenly has a whole menu of assets from which to choose from when contemplating investing into the "Bitcoin trading platform".

I don't know what you mean by "competing for BTC units" since the chains don't really "get" the BTC units, more like just babysit them (unless the SC breaks).

i view the 2wp as a "pass thru" from which scBTC arise on the other side.  these can then ride the SC themselves or be converted to InflataCoin or whatever.  in that sense, scBTC cannot be harvested for tx fees on MC.

As far as competing for investment fiat, aside from just the tx fees which are negligible right now, this seems to also apply to Counterparty. A stock, for example, by nature involves investing in a company rather than in bitcoins (or dollars). Someone could buy ASICMiner shares for fiat or buy paper DOW stock certificates for yuan, but I don't know if that's a bad thing for Bitcoin or the dollar, respectively. Sure the money doesn't go into the ledger, but eventually just having a stock market running on the ledger, at bottom, should bring a lot of value to that ledger.

maybe.

i just don't see it.  the other 6 billion just want stable money with SOV.  i know i do.  the deflationary nature of BTC itself means once fiat starts moving into Bitcoin it should send us to the moon.  that is the asymmetric bet most ppl are focused on when they say that.  it is a money thing.  i simply find all these other things incredibly distracting and risky.  and SC's violate "my" definition of the inextricable link.

These "pass thru" are a figment of your imagination. They are not unique to the 2wp and certainly not to a SPVP sidechain. They exist already in multiple form with the same consequence of risks to the ledger.

[devphp]

Imagine NXT as a SC, all big holders of Bitcoin could put there BTC there and earn interest. The fees could be cheaper than Bitcoin.

I am not a fan of PoS but I hold NXT for other reasons.

You're a brave Legendary member, not many would admit to hold NXT. I noticed this is a no-no among early Bitcoin adopters. Kudos to you!

[brg444]

yes, offchain tx's take away from mining fees.  but SC's will open up a whole new avenue of risk by not only competing at the mining level for tx fees but also competing for BTC units and competing for new investment fiat that now suddenly has a whole menu of assets from which to choose from when contemplating investing into the "Bitcoin trading platform".

I don't know what you mean by "competing for BTC units" since the chains don't really "get" the BTC units, more like just babysit them (unless the SC breaks).

i view the 2wp as a "pass thru" from which scBTC arise on the other side.  these can then ride the SC themselves or be converted to InflataCoin or whatever.  in that sense, scBTC cannot be harvested for tx fees on MC.

As far as competing for investment fiat, aside from just the tx fees which are negligible right now, this seems to also apply to Counterparty. A stock, for example, by nature involves investing in a company rather than in bitcoins (or dollars). Someone could buy ASICMiner shares for fiat or buy paper DOW stock certificates for yuan, but I don't know if that's a bad thing for Bitcoin or the dollar, respectively. Sure the money doesn't go into the ledger, but eventually just having a stock market running on the ledger, at bottom, should bring a lot of value to that ledger.

maybe.

i just don't see it.  the other 6 billion just want stable money with SOV.  i know i do.  the deflationary nature of BTC itself means once fiat starts moving into Bitcoin it should send us to the moon.  that is the asymmetric bet most ppl are focused on when they say that.  it is a money thing.  i simply find all these other things incredibly distracting and risky.  and SC's violate "my" definition of the inextricable link.  

It seems you are only interested in profit gains and how rich Bitcoin is going to make you.

[cypherdoc]

yes, offchain tx's take away from mining fees.  but SC's will open up a whole new avenue of risk by not only competing at the mining level for tx fees but also competing for BTC units and competing for new investment fiat that now suddenly has a whole menu of assets from which to choose from when contemplating investing into the "Bitcoin trading platform".

I don't know what you mean by "competing for BTC units" since the chains don't really "get" the BTC units, more like just babysit them (unless the SC breaks).

i view the 2wp as a "pass thru" from which scBTC arise on the other side.  these can then ride the SC themselves or be converted to InflataCoin or whatever.  in that sense, scBTC cannot be harvested for tx fees on MC.

As far as competing for investment fiat, aside from just the tx fees which are negligible right now, this seems to also apply to Counterparty. A stock, for example, by nature involves investing in a company rather than in bitcoins (or dollars). Someone could buy ASICMiner shares for fiat or buy paper DOW stock certificates for yuan, but I don't know if that's a bad thing for Bitcoin or the dollar, respectively. Sure the money doesn't go into the ledger, but eventually just having a stock market running on the ledger, at bottom, should bring a lot of value to that ledger.

maybe.

i just don't see it.  the other 6 billion just want stable money with SOV.  i know i do.  the deflationary nature of BTC itself means once fiat starts moving into Bitcoin it should send us to the moon.  that is the asymmetric bet most ppl are focused on when they say that.  it is a money thing.  i simply find all these other things incredibly distracting and risky.  and SC's violate "my" definition of the inextricable link.  

It seems you are only interested in profit gains and how rich Bitcoin is going to make you.

i don't think you have been reading carefully enough.

[Adrian-x]

Imagine NXT as a SC, all big holders of Bitcoin could put there BTC there and earn interest. The fees could be cheaper than Bitcoin.
I am not a fan of PoS but I hold NXT for other reasons.

Why?  This is where a centralized coin (Phillipines) as a SC would put with BTC as the basis of the coin.  POS system for a centralized coin makes absolute sense, and we could lower the transaction costs for usage assuming our Miners Rate gets high in their currency, also prevents bloat.

FUCK NXT

And this is good for Bitcoin how?
It will eat Bitcoin like Fiat ate Gold, a PoS SC is a terrible idea, it will reward wealth not productivity.

[Adrian-x]

Imagine NXT as a SC, all big holders of Bitcoin could put there BTC there and earn interest. The fees could be cheaper than Bitcoin.

I am not a fan of PoS but I hold NXT for other reasons.

You're a brave Legendary member, not many would admit to hold NXT. I noticed this is a no-no among early Bitcoin adopters. Kudos to you!

Not sure who put "Legendary" on my name  
I'm just supporting the crypto economy not NXT specifically. The NXT idea is similar to our current Fiat system, if Bitcoin succeeds we all succeed.

My support is to take a whack a mole approach to Alts. Bitcoin is the pilot people in the alt space work for Bitcoin, the stupid ones sell it.

[brg444]

Not sure who put "Legendary" on my name  
I'm just supporting the crypto economy not NXT specifically. The NXT idea is similar to out current Fiat system, if Bitcoin succeeds we all succeed.

My support is to take a whack a mole approach to Alts. Bitcoin is the pilot people in the alt space work for Bitcoin, the stupid ones sell it.

I had to sell some, Gavin talking about a fork not an evolution, and this this is devastating IMO.

I've been buying every dip untill the release of this paper my support has switched I'm now a net seller and will be untill there is more clarity.

 

[Adrian-x]

And this is good for Bitcoin how?
It will eat Bitcoin like Fiat ate Gold, a PoS SC is a terrible idea, it will reward wealth not productivity.

I agree it will reward wealth not productivity but what happens when/if the greedy miners make transaction fees cost to much in a native land?  You cut off third world countries possibly taking advantage of using Bitcoin - a POS SC coin would keep funds at a constant rate for transacting - this is really not that much different than what a Coinbase/Circle Company will be doing when we get a centralized wallet system that will charge users a small percentage to use and keep transactions of the blockchain.

Much like Coinbase Tips and ChangeTip is doing right now with the tipping features.  Internal transfers.

I'm a greedy miner too.  Miners have it easy for the next 6 years, there after if they charge high fees they devalue the network if the value of the network drops the status quo change if they don't adapt it degrades it will keep changing until the status quo brings new actors.

It's actually greed that will prevent degeneration, miners who scoop up the transaction fees that are equal to the marginal cost will out compete there competitors. At every halving there will be a disruption and miners will start a new competitive race to discover the marginal cost of business.

SC running on the Bitcoin protocol using SPV proofs change this incentive, this is why I'm skeptical.