now that the concept of the Bitcoin unit being inextricably linked to the blockchain is finally being better understood, the next logical extension of that concept is that sidechains make no sense. for all of the reasons i, and Adrian, have been arguing for months on end late last year.
No, its a well known logic axiom that the positive does not imply the contrapositive.
In other words, yes, the blockchain needs the bitcoin token. But that does not imply that Bitcoin needs the blockchain. Ok, ok, Bitcoin obviously needs the Bitcoin Blockchain to exist as it contains the history of the token's value appreciation and forms the foundation of its awesome features. So what we are really asking is "does Bitcoin need to use the blockchain exclusively?"
Well can Bitcoins be traded off chain? Of course. Judging by exchange volumes it seems that most transfers (trades) already occur off chain.
that's not at all what is happening. BTC deposited on an exchange are parked in an address owned by the exchange. all the trading is just on its own internal DB. when an owner wants to withdraw from the exchange, it simply draws from the pooled address and sends back to the owner's personal address. none of the BTC has EVER left the blockchain.
A sidechain is just a decentralized way to make off-chain transfers. Judging by what's going on on exchanges, if sidechains work they'll be popular even if their sole use is to decentralize some of the currently-existing centralized solutions (changetip?).
I think that there are very limited uses for a blockchain without an independently valued token (i.e. not a fiat representation token). I have discussed some in this thread. But in the ultimate egg-on-face for all the naysayers, I think we'll discover countless uses for a digital value token (aka bitcoin) and our ability to deploy crypto-currencies into these applications will actually be hindered by the inconvenience of the blockchain. Sidechains (if they end up viable) are an attempt to reduce this inconvenience by opening up development of the blockchain, but keeping the token.
SC's present its own form of problematic deposit; the spvp. talk about friction; it will be necessary to have at minimum a 2d proof of locktime, probably more. and then in the federated server model according to Adam himself, a necessary bounty to prevent cheating by the centralized owners.
i was highly disappointed by this simplistic presentation yesterday which didn't get any traction on Reddit whatsover, btw:
https://docs.google.com/presentation/d/1Tc_fhTPqbdlvApnWQWsgzG1U6NwN9lgkQsTdm5O-9iA/edit?pli=1#slide=id.g6eb72e55c_0103it is all pie in the sky and glosses over the potential for losing coins while stuck on the SC in case of an attack. these SC's will be attacked as they will be insecure by virtue of the fact they won't have 100% MM. and there is just no guarantee of one getting his coins back on the MC in that event as their simplistic SC sandbox in the Bitcoin Park diagram is suggesting. those miners who were once MM'ing to protect the SC can turn around and perform a 51% attack on the SC and refuse to mine the "proof of lock" thus disabling a return of those BTC all the while going short on the SC at an exchange. the slideshow presents as if nothing can go wrong.
