If I have to be honest I still can't quite grasp cypher arguments, I feel there's
something but at the same time I didn't find his narrative rigorously enough.
It seems more gut feeling rather than rational arguments.
E.g. the link between the ledger and the token that spvp should break if implemented:
If we consider 1:1 time invariant 2wp, for a transitive property I'd say that scBTC is
linked to the ledger in the same way btc is. At the same time I somewhat know that sc has
to be secured by merge mining and here come into play miner incentive you're referring to.
Having said what's your position on bitcoin current issues? Just to name a few:
scalability, tx confermation time, lack of incentive to run a node. Do you think
We can live with them? If not what are the needed solutions and how do you
think to deploy those?
For every cent miners earn mining Bitcoin on a SideChain they insulate themselves from the disruption in the inevitable 50% revenue drop, and for every bit of insulation we move closer to Kevin Dowd's inevitable Bitcoin prediction.
Sidechains do not generate more demand for transactions, they simply accomodate those transactions so that they can be held on-chain. It appears you suggest it is better for transactions to occur off-chain? That miners incentive should be limited to only what can be accomodated on the mainchain?
What ratio do you propose should be held on/off so as to not allow miners to "insulate themselves from the disruption in the inevitable 50% revenue drop".
I think 100% of Bitcoin exchanges should happened on a single Bitcoin ledger. But in reality I don't know.
If you prefer you can think of federated SC's as as on the Bitcoin blockchain, and there is no limit for those.
As ZB has pointed out, the exchanges do happen on the same, single Bitcoin ledger. That ledger is merely fragmented into different chains. The value is distributed on different chains but is all, in theory, compounded into the same network/ledger.
The problem I'd like for you to address re: federated SC's is they have the same consequences of changing the economic incentives for miners. Yes that change does not happen on the protocol level but it is IMO at least equally concerning. In that scenario, the incentives are not adopting a different model but are effectively "hijacked" by the federation/oracles/OT. This has the potential to considerably decrease the miners incentive to protect the network, especially compounded with the block subsidy drop.
If we expect miners to depend on transactions fees in the future then should we not make sure these transactions are not driven away to schemes that are out of their reach?
