Topic: Do We Embrace Sidechains? (Read 302 times)

All 3 of your examples do not need complex smart contracts and also they all need some sort of centralized authority for intervention. For example voting can never take place on a decentralized public ledger ever without a centralized authority making sure of the healthy election. Using blockchain is also the least efficient way of doing any of the examples above.

P.S. I was hoping for a better reply, like an actual use case not some generic response copied from the internet.

Smart contracts help in transforming traditional financial services in multiple ways.

Smart contracts provide a secure environment making the voting system less susceptible to manipulation. Votes using smart contracts would be ledger-protected, which is extremely difficult to decode.

Smart contracts can be used for inventory management and the automation of payments and tasks.

In the case of insurance claims, they perform error checking, routing, and transfer payments to the user if everything is found appropriate.

There are currently 30,020 LN nodes so I guess at least 28k-29k people are running LN nodes (some may run more than one like a company).

BTW LN is a second layer not a side-chain.

It is not that hard, and people who find it hard to run an LN node are the same people who find it hard to run a bitcoin node and end up using custodial wallets. I wouldn't call them "computer literate".

I am not against Side-chains as a whole, but I am apposed to Side-chains that are over complicating the technology. I do not know how many people are running Lightning Network nodes, but I can tell you... the average computer literate person will be challenged to run it successfully. 

A Side-chain should add value... increase user friendliness and increase adoption, but most developers are creating solutions with robust features that are over complicating the technology. (When you develop something, look at the user base and what they need.... not your personal requirements and what you can manage on your skill level)

Could you give us an example of such industry and an example of the functionality the additional smart contracts could solve in real world that is not gambling or fundraising?

The presence of "federations" is honestly what gives me a bad gut feeling. To me, this completely invalidates their "trustless" system.

Something to consider is that taproot/tapscript/schnorr is coming in about 2-3 days and it does improve the smart contract capabilities of bitcoin.  Not to mention the privacy and efficiency improvements.  Sidechains aren't a bad thing, but they aren't the be-all-and-end-all for scaling.  One problem is the notion of federated sidechains implies that there may be a finite group of signatories which implies trust.  This is one nice thing about bitcoin, people can implement and activate things without asking for permission. 

Doesn't using a smart contract platform that has faster confirmation times inherently increase scalability?

So wouldn't bitcoins sidechains like Liquid help scale bitcoin while also bringing additional functionalities?

I think most people who are still hung-up about "sidechains" or "Alt-chains" have basically closed their eyes to the fact that DeFi (including the scams, manipulation and market grabs) has become large enough that people are developing L2 based applications for trading. The basic facts cannot change that Bitcoin is essentially the ONLY cryptocurrency that we have. A lot of crypto-rich people have already diversified their BTC holdings into other chains simply for the sake of making use of the lending/ borrowing and other functionalities that Smart-contracts enable.

If sidechains had been taken seriously, Bitcoin going to Ethereum as Wrapped-BTC would have gone to Sidechains. In both cases, there will always be people who would want to "play" with their money rather than hodl on-chain indefinitely.

The question asked by OP is wrong though. Sidechains DONT scale bitcoin. All they do is provide the smart-contract functionality while utilizing the security of BTC chain. Obviously, there is a custodial/ delegated swap that happens and that makes it not much different from the Alt-chains that exist purely for smart-contract based products.

I've had been a fan of RSK which helped me "pay very less BTC" while getting my transaction getting confirmed way quicker than BTC's main chain, but now the problem is that I need to pay a bit more to get my transaction through compared to BTC's Blockchain. Though, the transactions are very fast and success ratio of confirmations is much better and it can really help scale BTC at a much better pace. It's true that they've brought their own coins but have they stopped serving the purpose they were made for? I guess not, they're still serving BTC to run on their chains to be sent quickly to the other party.

I'm actually hoping to see a proper sidechian which should be an integral part of the Bitcoin Network, with Network Participants on the main network able to easily take part in the sidechains network consensus as they take part in main chain consensus. For the sake of security and decentralization, there are other important factors to look out for when considering proper sidechians.
I'm not sure if any I have seen so far is close to proper... Will probably go through those on your list later to see how close they are

THANK YOU for that link, that is something I have been looking for all week.

I believe there are many industries that value many of the functionalities that other smart contract platforms have to offer. I think if sidechains are able to bring that kind of functionality to bitcoin it means all the better.

I believe people will understand the risks and still take comfort in the fact this is built alongside a secure asset like bitcoin. I do believe privacy will be the main driver, however. People want ways to privately use their bitcoin.

just like custodial exchanges are not a blockchain or a 'your key your wealth'situation.. sidechains and altnets that bridge to bitcoin via utxo locks do have some niche.. but those supporting such things need to be clear about the pitfalls and limitations and lack of security of their alternative networks

too many sidechains and altnet fans pretend their network is bitcoin or has the security of bitcoin. or call it things like layer 2 to pretend its part of bitcoin.. without ever daring to be honest about why its not bitcoin

the altnet and sidechains need to express that its different to bitcoin and explain what users can lose/risk when using such networks

there has been too much buzzword play happening trying to offramp users away from bitcoin to these other networks without having the brutal honesty about what these other networks can and cant do.. too much over hype, too much over promising. and even more so too much pretence that its better than bitcoin.

if these altnet and sidechain fanatics actually wanted loyal and true honest utility of their network. they should be honest upfront. and let the user decide to take a chance fully informed.. and not be feared into using another network with fud about how bitcoin is broke and cant be fixed. and then find out when on the other network they are stuck being required to 'trust' other people to sign transactions on their behalf and be at the whims of other peoples ability to host them, sign for them, or have the funds for them to hop payments around

so to put it short.
yes sidechains and altnets have some niche.. but those sidechains/altnets better be clear about what they can and cant do and what makes them different to bitcoin.. even for the reason why they even exist.

everyone knows exchange database is not the bitcoin ledger even if they display a graphic user interface of a token of the same name. and the same needs to be true for sidechains/altnets. explain the differences and risks. dont lie. hype about the comparables

make it clear the real asset is being locked up on bitcoin. and the other network is playing with other units of measure, pegged/backed/divisible of the locked asset

I don't think we need more fake decentralized projects like we have now with bunch of altcoins, and moving that shit to bitcoin ecosystem makes no sense to me.
Sidechain and other layers for Bitcoin might be a good idea that could in theory kill the need for using any other coins, and using them for privacy and scalability would be a great use case.
Jameson Lopp has a nice list of resources for this on his website:
https://www.lopp.net/bitcoin-information/other-layers.html

I think that the crypto community is still neutral towards sidechain projects.
Most of the Bitcoiners have a "let's wait and see what happens" mindset,when it comes to such projects.
If the sidechain projects become successful,that's great.If the projects turn out to be a failure,that's no big deal.The Bitcoin Core blockchain won't be damaged by this.
Overall,there's something to gain and nothing to lose for the Bitcoin community.
Sidechains can bring new and useful features to the table.

Honestly, so far I have been scarcely interested in the problem of sidechains and the effects they might have on the bitcoin blockchain. As for me, I think they are no different from other altcoins except that in the case of sidechains there should necessarily be a bridge to bitcoin's chain to make settlements. It also follows that any blockchain that exists today could potentially become a sidechain for bitcoin if the users, or developers, or whoever else in charge of that blockchain, wish to do so.

Should we embrace them? I don't know. It depends on who you ask. The real question is will governments embrace them because the lack of decentralization in these sidechains requires approval from authorities for sidechains to exist and function.

Side-chains can not scale bitcoin, they are completely different blockchains that don't even have to use a 1:1 ratio with bitcoin and their coin. For example there could be a side-chain where you "deposit" your bitcoin and receive 1000 tokens for each bitcoin!

It may be because you are using the wrong term when you mean "token creation methods".

Not totally, but there's still a lot. The developer team handles the codebase, the domain, the website, etc which are major points of failure. One of the major advantages is that these sidechains should be trustless though; though I don't know the technicalities of these Bitcoin sidechains so I can't confirm. I'd wait for comments from other a lot more technically literate peeps lol.

This makes sense.

However, if these services were running on top of (or alongside) bitcoin, would they still have the same 'centralized points of failure'?
I believe this is what you asked in your original response if I'm not mistaken.

I hope someone is able to shed some light on that point.

The majority opinion of Bitcoin "maximalists" are that these services provided by smart contract platforms are unnecessary, and that have so much centralized point of failures that you might as well just use centralized platforms.

I somewhat don't totally share the same view with this despite me understanding why they think this, so you'd have to wait for them to respond.