Topic: [2019-10-22] Bitcoin Sidechains To Send Altcoins Prices to ZERO? (Read 325 times)

Sounds like a lot of fear, uncertainty and doubt here based upon a bunch of what-if scenarios. Who is to say that by the time that they finally figure out a way to implement this feature Bitcoin will still be ahead of all the other altcoins?
    What happens when Blockchain generation 4.0 comes with some crazy new innovative consensus algorithm that makes it a Bitcoin killer? It's all speculation. Kind of like when Einstein wrote down the mathematical formula that described L.A.S.E.R's, but a laser wasn't actual built until decades later.
   Or that time he invented Paper towels!

I don't know. What is the basis for those numbers?

Either way, he still highlights the major problem -- a majority of miners can collectively decide to steal the bitcoins locked into any sidechain. The more value amassed in sidechains, the worse the incentives become.

Remember the Segwit anyone-can-spend FUD? It becomes a reality with drivechains because there is no network of full nodes to stop miners.


I believe that's correct. The crux of the issue here is that sidechains are fundamentally insecure, not that they are a major threat to Bitcoin.

However, merge mining will definitely encourage mining centralization in Bitcoin, since mining sidechains carries additional overhead costs. That skews profitability towards larger pools. Arguably, this design also means that miners are effectively implementing soft fork block size increases:


Same here.

I understand that there are two threats: an increased incentive for double-spending 51% attacks (stealing sidechain funds) and inflation attacks on the sidechain.

But isn't this comment true, that the 51% attack, to create an invalid sidechain withdrawal to the main chain would need a fake chain of thousands of blocks (13,150 to be precise) and thus, a really big and stable cartel of miners to be achieved?

And regarding inflation attacks: I meant to have understood Paul Sztorc addressed such "on-sidechain" attacks and thinks they are not a threat to the main chain because they should only affect weak sidechains which are not "worthy" to be saved. Their peg simply would fail and they would die (or become a non-pegged "standard altcoin"). See here for his argumentation. Main chain would not be affected; for main chain a withdrawal "to the sidechain" is like a normal transaction.

Particularly, I'm referring to this argument:

The only threat I can understand from my layman's perspective is that a failing sidechain could lead, psychologically, to the belief that "Bitcoin" has failed and thus create market convulsions.

Anyway, I would like to see Drivechains first to be implemented in some altcoin - this would even help because then we very likely _will_ see failing and weak sidechains and the effect they could have on the main chain and its security.

There is also a second option: a "pegged coin" in the style of BitShares or DAI (which may be what Carlton Banks wrote about), over-collateralized by another "base" token to be used as a sidechain for BTC (well, it already exists with BitBTC, albeit with a semi-centralized base layer). However, this would have as a consequence the existence of strong altcoins serving as a base for these "peggedchains", and thus would not necessarily boost Bitcoin's dominance. (I'm however convinced that a BTC monopoly is impossible, even if we wanted it, because incentives to run altcoins are too strong.)

LoL

Put Back on TAB or aside

 

This is a very naive and a hopeful claim by bitcoin maximalists because, as they reckon, altcoins are stopping it from going on $1 million.

The cryptospace will always have altcoins. Developers will always make them, traders will always trade them, exchanges will always list them, bagholders will always hold them.

This article show that Bitcoin is secured because of sidechains, But not good for altcoins and I don't believe altcoins is become zero value  in my own view altcoin is also important in the digital crypto currency as alternative form of money same of bitcoin. And I believe until people patronage the altcoins specially in top list coins not become zero value shitcoin is possible to become zero.

Right. That's why you got to like how simple Bitcoin is. It's designed to do one task extremely well, and that's also what it does, while Ethereum has been designed to do multiple tasks well, but the reality is that it does a mediocre job in most task areas. It also requires far more technical understanding of the inner workings of the protocol.

Running a Bitcoin full node is just a matter of downloading Core or another client, let it open and it does everything for you. It just takes a day or two to download and validate the data. No further attention needed from the user. Running an Ethereum client will freak you out if you are a simple user and just want to contribute by running a full node. Result is that no node will be running.

Well if these sidechains can get moving now, great. If not, I'll be pretty okay actually. Back when I first heard about them, there was very little mainstream literature beyond talking about potential. I always thought that if rootstock, for instance, just made one very useful smart contract for escrowing bitcoin, and made it work well, that would get things going. Maybe that time will come soon?

right, Ethereum can act as a base chain for other chains, Bitcoin was never designed to (and so 5 years later, only 1 very simple centralised Bitcoin sidechain exists, where you have to trust 1 company to use it).

Although in fairness, Ethereum has made alot of adjunct design compromises that have made it a centralised system at that base layer; trying to run an Ethereum node is a massive task, and would be very painful and frustrating to start from zero today (I think you'd need months of work figuring out why the chain won't validate this or that section, it's a nightmare task apparently). In practice, Ethereum is a cartelized coin at this point, and there's no way back from that

That has already proven to be a non issue. Any token launched on Ethereum enjoys the security of it's immensely powerful network, and that security is something that you as project or business can tap into nearly for free, hence the reason most serious projects and businesses launch on Ethereum and not on garbage platforms such as EOS or TRON.

right... but just because it carries on regardless, doesn't make it viable. In this overall growth phase, new participants are literally queuing up to behave this exact same way over and over, but there's no such thing as infinite growth the maturing of the market, a viable sidechain protocol, or both of the former would kill this particular behavior pattern



No, you've misunderstood

The reason that HairdryerCoin or ElbowCoin fail isn't just because they're a cynical marketing gimmick. Very infrequently, someone actually comes up with a genuine purpose-based concept that Bitcoin wasn't designed for. Namecoin is (was) a perfect example: a special new .bit domain name ecosystem, where ICANN and FBI: World Police have literally zero legitimacy, which is resistant to censorship/takedowns (Tor .onions less so) and with which domains can also be bought and sold as a function of the network (Tor .onions cannot do this without trust issues)

But truly good concepts for purpose specific tokens also fail, because attracting hashpower is not easy, and makes them vulnerable to 51% attacks from bigger coins using the same hash type. If only there was some way to put these good concepts for purposed tokens under so much hashing protection that that problem went away.... aaaand can you say "hello sidechains"? But as outlined, no-one's found a safe/viable design for that, yet

Sidechains have been around as a concept and advocated for for a long while now.

There is really no evidence that they will bloom into something major any time soon (even though I do think that it'll be done, just in the long term) that will replace the entirety of altcoin markets.

But it would certainly make a lot of sense to integrate decentralised services and whatnot directly on top of the bitcoin blockchain, as opposed to have an alternate chain to do the task. I just don't think that the markets are ready for this yet.

Unless a sidechain can earn you dollars then alts have absolutely nothing to worry about. That's the only reason most of them exist and that's the only reason most people are here.

And it's not as if alts are being used for any actual purposes. If you were serious about your purpose you wouldn't be using one.

This. Up to last year I really believed that altcoins would trend down as the growth of LN on paper forms a major threat to any altcoin focusing on fast and cheap transactions, but I couldn't be more wrong.

Altcoins work as leveraged instruments both on the way up and down, and this is what people like about them, no matter how crappy they may seem. All that matters is to enter and exit with a profit and people then shift to another coin.

Buying random altcoins is also very exciting for people in the sense that it potentially may turn out to be the next Bitcoin or Ethereum they have invested in. It's a complete package that makes them interesting investment options.

This is from the article:


I was specifically talking about drivechains being insecure. Worse yet, their insecurity could effectively become an attack on Bitcoin:

https://zmnscpxj.github.io/sidechain/weakness/index.html

https://twitter.com/peterktodd/status/1090410614613135361

Adam Back points out the security holes of merged mined sidechains right in the article too:


There may be promise in zero-knowledge proofs, but it is completely theoretical. Nothing that currently exists is even close to accomplishing proofs of that magnitude. It would be a stretch to even call it vaporware:

https://www.forbes.com/sites/ktorpey/2019/02/27/its-2019-where-are-bitcoins-sidechains/#60da53c353b4

Altcoins have one main utility that Bitcoin will never be able to take away from them, which is that they generally go up more than Bitcoin. Most of the altcoin traders and investors play with altcoins to stack up on satoshis, and I'm pretty sure that it will continue to be like that for many more years. It also helps keeping a lot of Bitcoin off the market.

People never cared enough about the utility of altcoins to care about Bitcoin doing a lot of things better, or that it has a lot in the pipeline deeming altcoins obsolete.

Altcoins are already going to zero in the long run, most of them are cash grabs that can't seriously compete with anything, and those that aren't can still die because they aren't strong enough. This all will happen regardless if sidechains will ever be launched or no.

yep, there'd be a million side-chains by now if there was a viable way to do it.

They aren't NOW, but responding to the article and the potential designs discussed, they will be, which was the point.

They aren't. Sidechains are altcoins. Nobody has even figured out how to theoretically secure sidechains in a trustless and decentralized way.

This comment from Peter Todd outlines one of the primary problems:


Other approaches like federated consensus are uninteresting.

Too much money needed to create a sidechain, it's a bit like mining bitcoins... not really for the average Joe. More money you will have to invest in, more "power" you'll get.  Another argument I found interesting, what could happen once we have a lot of sidechains built, couldn't it quickly become a real mess?

I know the advantages but It reminds me of powdered milk for newborns. We collect the milk from the cows, we process it into powder in the factories. To finally transform it back into liquid milk (what it was at first + everything chemical, as a gift )


https://blockstream.com/liquid/
I don't think Blockstream is imagining something   Nor ETH with Plasma or Lisk.

It's obvious that the idea has alot of potential (as well as technical hurdles, hence the distinct lack of Bitcoin sidechains in operation since the idea was first written up)

I like the experimental possibilities; Ethereum's EC20 protocol (?) could be viewed like a sidechain system, where many different tokens (that do not necessarily have to be currencies ) are run in parallel with the underlying Ethereum blockchain (Buterin always said "Ethereum is not designed to function as a currency", and to a certain extent that's true, you're buying shares in the overall platform when you purchase ETH). This direction was originally fulfilled with the "colored coins" approach in Bitcoin, and at least one noteworthy success (Omnilayer's hosting of the Tether stablecoins) has been using Bitcoin's main blockchain for this secondary purpose.

Having a sidechain for an internet domain name system, cryptographic shares in companies (even other financial contracts), or just for serving and querying keys (PGP system could use such a sidechain in light of this summer's keyserver flaw) could all be very aptly implemented as Bitcoin sidechains.

There's a problem with all the possibility though; freedom to experiment includes freedom to design deceptive or disastrous sidechains, and the corresponding freedom to make unwise decisions about using such chains. I expect that a breakthrough in Bitcoin sidechain tech and a subsequent explosion in marketing of new sidechains is going to lead to alot of fraud and losses of over-excited investors.

No-one's holding your hand to bail you out if you screw up, permissionless capitalism means all trades are final, even if "it isn't fair". Buyer beware.

An advantage of sidechains adding features is that it is then secured by the full value of bitcoin, thus it is distributed and has a lot of value securing it as compared to a new alt coin that has very low value and therefore lower security.

Tomorrow (a few hours from now), it will have been exactly five years since the original white paper on Bitcoin sidechains (PDF) was released. The basic idea explained in the paper was that Bitcoin users would be allowed to move their coins between multiple, completely different blockchains that could enable a wide range of new cryptocurrency features.

The end result of this functionality would theoretically be an end to the many altcoins that existed on the market at the time, as there would no longer be a legitimate reason to create a new cryptocurrency in an effort to experiment with new features. Instead, new features that were sufficiently complex could come to Bitcoin by way of sidechains.

Today, sidechains do exist, but they come with trade-offs in the areas of centralization and censorship resistance – at least for now. At the recent Transylvania Crypto Conference, a panel of experts on the topic, including Blockstream CEO and sidechains white paper co-author Adam Back, discussed the current state and future potential of sidechains for Bitcoin.

The source is here for more reading...





The claim is that Bitcoin Sidechains can eventually make all altcoins lose value and purpose as this functionally can easily adopt all the features that altcoins may have rendering them, in essence, very worthless and inutile. "...new features that were sufficiently complex could come to Bitcoin by way of sidechains."


Now, whether this claim can happen or not depends a lot if Sidechains can be implemented soon and if the market will be reacting in the way it is expected.

Do you think that Sidechains has this potential or maybe the guys behind this proposition is just imagining things? Please share here what you may know about this Sidechains...