Topic: Gold collapsing. Bitcoin UP. - page 688. (Read 2032265 times)
Ukraine Admits Its Gold Is Gone: "There Is Almost No Gold Left In The Central Bank Vault"
http://www.zerohedge.com/news/2014-11-18/ukraine-admits-its-gold-gone
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/03/Ukraine%20goldjpg_0.jpg
Quote
Back in March, at a time when the IMF reported that Ukraine's official gold holdings as of the end of February, so just as the State Department-facilitated coup against former president Victor Yanukovich was concluding, amounted to 42.3 tons, and notably under the exiled president, Ukraine gold's reserves had constantly increased hitting a record high just before the presidential coup. We reported of a strange incident that took place just after the Ukraine presidential coup, namely that according to at least one source, "in a mysterious operation under the cover of night, Ukraine's gold reserves were promptly loaded onboard an unmarked plane, which subsequently took the gold to the US.
http://www.zerohedge.com/news/2014-11-18/ukraine-admits-its-gold-gone
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/03/Ukraine%20goldjpg_0.jpg
Have to protect that gold from the mean bad Rooshins dontcha know. Just like Germany's.
https://www.youtube.com/watch?v=tF4JTd61xco
it's becoming clearer to me everyday that what we are dealing with is Keynesian vs Austrian philosophy with this SC's debate.
heretofore, what has brought Bitcoin to where it is today is its Sound Money function. and its been brilliant at that. instant liquidity and transportation worldwide and p2p. continuous growth in the economy and stellar, but volatile, increasing SOV. gvts everywhere scrambling to figure out what this is and what role it has for their futures. investment groups everywhere diving into a variety of Bitcoin investing schemes. Bitcoin is the "Technology Singularity", as Daniel put it in the video above, that is the culmination of 4 decades of work by the cypherpunks. we have achieved acceptance as a global, digital, cash money system that, imo, is in the process of replacing gold's function for the last 5000 yrs. to me, an Austrian leaning Bitcoin proponent, that's all we should strive to be. that's all we need to be. my goal is to have Bitcoin have its own ticker symbol on the Forex exchange. from there, as the only true Sound Money in the world, it can consume all fiat currency AND gold, which will take us To The Moon and way beyond as the sole globally accepted currency. there only needs to be one money and Bitcoin can be "it". the problem is, if it is even a problem, it will take time and some long hard fought battles. the Keynesians don't want to help us. they don't want to "buy in" to the system which would take the price up logarithmically. they think a price of $376 is "too expensive". well, to me the other view is that they just weren't paying attention back in 2009 and tough luck, that's how technology disrupts financial systems, as it has with many other industries. i say "buy in" now and you can still join us on the way to the Moon. we haven't even really taken off yet.
the Keynesian view is that Bitcoin needs to do more to gain acceptance and grow itself. the protocol needs to be changed to incorporate all other forms of asset options; stocks, bonds, assurance contracts, smart contracts, insurance, etc. by allowing BTC to be transformed into speculative assets via the spvp, that is by definition inflationary. nevermind that if Bitcoin succeeds at the Austrian Sound Money function, it will force all those assets to trade in terms of Bitcoin eventually as well. but that would be the hard battle and there are too many fiat vested interests that don't want to see that happen. and there are too many Bitcoiner's who are impatient and can't stand price volatility. and there are too many devs that gotta dev and get paid (in USD's). and there are too many of all of those who missed out. so what do they do? they try to change Bitcoin. change it by changing the source code which breaks the Sound Money function. to me, that is what the spvp does, it creates an offramp into all manner of these assets. after all, that is exactly what the Blockstream (Keynesian's) say as well; that being that the blockchain is too restrictive, it's prevents innovation, it's too risky, it's too slow, it's not big enough, yada yada yada. so what is wrong with using SC's to incorporate all those assets? it breaks the Sound Money function. Bitcoin will no longer be viewed as solely a new form of money. it will be viewed as a "trading platform" with which you can use to move back and forth btwn assets and BTC. it would be like a Fidelity brokerage house, you deposit your money in a cash acct and then trade all manner of assets in and out. it also destroys the time preference of what money should be. you see, stocks, bonds, contracts, insurance, etc are long term investments. they are to be held. and they are not used to provide seamless, instant, liquidity type functions like Bitcoin would be if it stays in its current form as sound money. thus, we may NEVER see those assets be converted back to BTC in the future. or at least if we do, it won't be for a long time, and then what does that do for Bitcoins money function? answer: it slows it down if not outright destroys it. if that's true, where do Bitcoin miners get the tx fees they desperately need in the future to secure the mainchain? what do we, as current Bitcoin holders, do if we see that many ppl are using this offramp to move into all these different SC's? how do we interpret an especially popular SC? Zerg and others say that we should trust Blockstream devs to incorporate any popular function back into the MC. but that would be to violate one of Bitcoins core principles; trust no man. and incorporating other assets back into MC doesn't even make any sense when you are talking about SC's that offer completely different assets as defined above. they would have to stay as SC's and i dare say there mere existence destroys Bitcoins liquidity and money function.
Bitcoin is a simple system currently. that's great for a simple money function. we don't want complexity or risk. but to add SC's into the equation introduces all sorts of risk and unpredictable consequences. the price of Bitcoin has to move orders of magnitude higher to achieve its money status. this is how miners will profit and how adoption will increase. the only way to achieve this is to target the Forex and gold markets as a Sound Money; the exact same plan that has gotten us to where we are. those are the Big Kahuna's we want to tap into and this is the strategy that the cypherpunks ultimately envisioned and this is what will take us to the Moon. we need to force outsiders to buy in. not allow them to insert an offramp to divert value into insignificant, undesirable or risky asset markets.
if you've read this thread for any length of time, you can see that what i'm saying above is totally consistent with my positions in the past. as well as my past memes:
"The blockchain may only ever be applicable to Bitcoin as Money".
"The BTC currency unit is forever inextricably linked to its blockchain. you break that link and you break Bitcoin".
heretofore, what has brought Bitcoin to where it is today is its Sound Money function. and its been brilliant at that. instant liquidity and transportation worldwide and p2p. continuous growth in the economy and stellar, but volatile, increasing SOV. gvts everywhere scrambling to figure out what this is and what role it has for their futures. investment groups everywhere diving into a variety of Bitcoin investing schemes. Bitcoin is the "Technology Singularity", as Daniel put it in the video above, that is the culmination of 4 decades of work by the cypherpunks. we have achieved acceptance as a global, digital, cash money system that, imo, is in the process of replacing gold's function for the last 5000 yrs. to me, an Austrian leaning Bitcoin proponent, that's all we should strive to be. that's all we need to be. my goal is to have Bitcoin have its own ticker symbol on the Forex exchange. from there, as the only true Sound Money in the world, it can consume all fiat currency AND gold, which will take us To The Moon and way beyond as the sole globally accepted currency. there only needs to be one money and Bitcoin can be "it". the problem is, if it is even a problem, it will take time and some long hard fought battles. the Keynesians don't want to help us. they don't want to "buy in" to the system which would take the price up logarithmically. they think a price of $376 is "too expensive". well, to me the other view is that they just weren't paying attention back in 2009 and tough luck, that's how technology disrupts financial systems, as it has with many other industries. i say "buy in" now and you can still join us on the way to the Moon. we haven't even really taken off yet.
the Keynesian view is that Bitcoin needs to do more to gain acceptance and grow itself. the protocol needs to be changed to incorporate all other forms of asset options; stocks, bonds, assurance contracts, smart contracts, insurance, etc. by allowing BTC to be transformed into speculative assets via the spvp, that is by definition inflationary. nevermind that if Bitcoin succeeds at the Austrian Sound Money function, it will force all those assets to trade in terms of Bitcoin eventually as well. but that would be the hard battle and there are too many fiat vested interests that don't want to see that happen. and there are too many Bitcoiner's who are impatient and can't stand price volatility. and there are too many devs that gotta dev and get paid (in USD's). and there are too many of all of those who missed out. so what do they do? they try to change Bitcoin. change it by changing the source code which breaks the Sound Money function. to me, that is what the spvp does, it creates an offramp into all manner of these assets. after all, that is exactly what the Blockstream (Keynesian's) say as well; that being that the blockchain is too restrictive, it's prevents innovation, it's too risky, it's too slow, it's not big enough, yada yada yada. so what is wrong with using SC's to incorporate all those assets? it breaks the Sound Money function. Bitcoin will no longer be viewed as solely a new form of money. it will be viewed as a "trading platform" with which you can use to move back and forth btwn assets and BTC. it would be like a Fidelity brokerage house, you deposit your money in a cash acct and then trade all manner of assets in and out. it also destroys the time preference of what money should be. you see, stocks, bonds, contracts, insurance, etc are long term investments. they are to be held. and they are not used to provide seamless, instant, liquidity type functions like Bitcoin would be if it stays in its current form as sound money. thus, we may NEVER see those assets be converted back to BTC in the future. or at least if we do, it won't be for a long time, and then what does that do for Bitcoins money function? answer: it slows it down if not outright destroys it. if that's true, where do Bitcoin miners get the tx fees they desperately need in the future to secure the mainchain? what do we, as current Bitcoin holders, do if we see that many ppl are using this offramp to move into all these different SC's? how do we interpret an especially popular SC? Zerg and others say that we should trust Blockstream devs to incorporate any popular function back into the MC. but that would be to violate one of Bitcoins core principles; trust no man. and incorporating other assets back into MC doesn't even make any sense when you are talking about SC's that offer completely different assets as defined above. they would have to stay as SC's and i dare say there mere existence destroys Bitcoins liquidity and money function.
Bitcoin is a simple system currently. that's great for a simple money function. we don't want complexity or risk. but to add SC's into the equation introduces all sorts of risk and unpredictable consequences. the price of Bitcoin has to move orders of magnitude higher to achieve its money status. this is how miners will profit and how adoption will increase. the only way to achieve this is to target the Forex and gold markets as a Sound Money; the exact same plan that has gotten us to where we are. those are the Big Kahuna's we want to tap into and this is the strategy that the cypherpunks ultimately envisioned and this is what will take us to the Moon. we need to force outsiders to buy in. not allow them to insert an offramp to divert value into insignificant, undesirable or risky asset markets.
if you've read this thread for any length of time, you can see that what i'm saying above is totally consistent with my positions in the past. as well as my past memes:
"The blockchain may only ever be applicable to Bitcoin as Money".
"The BTC currency unit is forever inextricably linked to its blockchain. you break that link and you break Bitcoin".
Ukraine Admits Its Gold Is Gone: "There Is Almost No Gold Left In The Central Bank Vault"
http://www.zerohedge.com/news/2014-11-18/ukraine-admits-its-gold-gone
Quote
Back in March, at a time when the IMF reported that Ukraine's official gold holdings as of the end of February, so just as the State Department-facilitated coup against former president Victor Yanukovich was concluding, amounted to 42.3 tons, and notably under the exiled president, Ukraine gold's reserves had constantly increased hitting a record high just before the presidential coup. We reported of a strange incident that took place just after the Ukraine presidential coup, namely that according to at least one source, "in a mysterious operation under the cover of night, Ukraine's gold reserves were promptly loaded onboard an unmarked plane, which subsequently took the gold to the US.
http://www.zerohedge.com/news/2014-11-18/ukraine-admits-its-gold-gone
Maybe you don't know this because you're young and new here and this may come as a shock to you, but soundbites don't actually prove anything.
In fact, those soundbites remind me of a conversation I had a little over two years ago:
https://bitcointalksearch.org/topic/m.1227012
In fact, those soundbites remind me of a conversation I had a little over two years ago:
https://bitcointalksearch.org/topic/m.1227012
I don't have to rely on soundbites.
Unlike most detractors in here, Adam Back and Austin Hill's track record speak for themselves.
On one end of the spectrum, if a sidechain's 2-way peg can be severed at the whim of the sidechain devs, it would essentially be an altcoin and would presumably attract about as much investment as altcoins do (not a threat to Bitcoin).
At the other end of the spectrum, if it's mathematically impossible to sever the 2wp, then it is a true sidechain and the value seems to always remain with the Bitcoin ledger (not a threat to Bitcoin, at least not for this reason).
From the description of the SPV proof, to get out of the sidechain it seems like you need to be able to create transaction in the sidechain which burns some sidechain units.At the other end of the spectrum, if it's mathematically impossible to sever the 2wp, then it is a true sidechain and the value seems to always remain with the Bitcoin ledger (not a threat to Bitcoin, at least not for this reason).
If it's possible to block transactions in the sidechains, then it would be possible to prevent sidechain holders from cashing out into the main chain.
In that case I'd expect a lot of people to pretty wary of investing in sidechains, especially as a store of value. It seems like they should just be considered "fortified altcoins" in that case. For many altcoin proponents it may become THE way to launch altcoins, and it may provide a powerful boost, but it seems like it will take years without incident for people to gain enough confidence in the pegging system to rely on it as a store of value.
To be able to block transactions would require centralization of the tx verification process or corruption of the miners.
Considering the proposition of SPVP sidechains is to MM the more valuable sidechains on the same level as BTC it would mean a situation where a miner goes rogue and attack the network.
Some have argued MM might open an incentive to do so that does not exist with Bitcoin itself. In my opinion the economic incentive for miners to behave is still very much in place and discourages most attempts.
On one end of the spectrum, if a sidechain's 2-way peg can be severed at the whim of the sidechain devs, it would essentially be an altcoin and would presumably attract about as much investment as altcoins do (not a threat to Bitcoin).
At the other end of the spectrum, if it's mathematically impossible to sever the 2wp, then it is a true sidechain and the value seems to always remain with the Bitcoin ledger (not a threat to Bitcoin, at least not for this reason).
From the description of the SPV proof, to get out of the sidechain it seems like you need to be able to create transaction in the sidechain which burns some sidechain units.At the other end of the spectrum, if it's mathematically impossible to sever the 2wp, then it is a true sidechain and the value seems to always remain with the Bitcoin ledger (not a threat to Bitcoin, at least not for this reason).
If it's possible to block transactions in the sidechains, then it would be possible to prevent sidechain holders from cashing out into the main chain.
In that case I'd expect a lot of people to pretty wary of investing in sidechains, especially as a store of value. It seems like they should just be considered "fortified altcoins" in that case. For many altcoin proponents it may become THE way to launch altcoins, and it may provide a powerful boost, but it seems like it will take years without incident for people to gain enough confidence in the pegging system to rely on it as a store of value.
http://www.etf.com/sections/features/23846-winklevoss-bros-beware-bitcoin-etf-risks.html
So no further development until January it seems.... So much for fourth-quarter 2014....
Quote
The brothers will speak more extensively about their plans at the upcoming Inside ETFs conference in Hollywood, Florida, in January.
So no further development until January it seems.... So much for fourth-quarter 2014....
I'm just trying to make incremental progress in my understanding by answering the question "on which ledger is the value stored?" The probability that the 2-way peg is severed is a different discussion.
I think the probability of the 2-way peg being severed is actually central to the definition of "sidechain" vs. "altcoin," and for practical purposes determines investment behavior in the chain.
On one end of the spectrum, if a sidechain's 2-way peg can be severed at the whim of the sidechain devs, it would essentially be an altcoin and would presumably attract about as much investment as altcoins do (not a threat to Bitcoin).
At the other end of the spectrum, if it's mathematically impossible to sever the 2wp, then it is a true sidechain and the value seems to always remain with the Bitcoin ledger (not a threat to Bitcoin, at least not for this reason).
For cases in between, we cannot really call it a true sidechain, and by the same token we cannot really expect substantial portions of the bitcoin holders to just jump over to the sidechain.
In other words, there's a reasoning error to watch out for here: insofar as the value that could be funneled over to the sidechain relies on the certainty that the 2wp will remain, the concern is self-defeating. If there is any shadow of possibility that the 2wp could be broken, it won't attract that many bitcoins - not much more an any altcoin; and if any sidechain does attract a large portion of the bitcoins, it will only be because the 2wp is as certain of a thing in investors' minds as Bitcoin itself is, which is an extremely high bar.
(This does still leave the possibility that the devs could hamstring Bitcoin deliberately to reduce confidence in Bitcoin to bring it in line with confidence in a not completely solid 2wp so that many people would switch despite some uncertainty. However, this is a much smaller argument to be making.)
+1
good to see some reason and rationality in here. refreshing
Can a sidechain restrict the number of BTC converted to sidechainCOIN?
If they can be restricted, than value of scCOIN can grow but only be obtained via direct purchase and not btc conversion when the cap is hit. This removes value from the mainchain and will only be converted back to BTC if the scCOIN becomes less valuable than BTC again.
If it can’t be restricted then if the scCOIN value rises so does the value of BTC. Since anyone can use this extra value by converting BTC to it.
This should be true as far as both the mainchain and sidechain are representing value as a number. But what if the sidechain is more like a colored coin where an asset is represented by a token. I don’t know how that would affect the mainchain positively or negatively restricted or unrestricted.
If they can be restricted, than value of scCOIN can grow but only be obtained via direct purchase and not btc conversion when the cap is hit. This removes value from the mainchain and will only be converted back to BTC if the scCOIN becomes less valuable than BTC again.
If it can’t be restricted then if the scCOIN value rises so does the value of BTC. Since anyone can use this extra value by converting BTC to it.
This should be true as far as both the mainchain and sidechain are representing value as a number. But what if the sidechain is more like a colored coin where an asset is represented by a token. I don’t know how that would affect the mainchain positively or negatively restricted or unrestricted.
All options are feasible, even ugly tokens not pegged to the SideChain that is used to convert them.
All options including restricting the numbers of BTC able to be converted? That seems like a hard sell for miners to run that software if it can diminish the value of the mainchain. Thoughts?
There are use cases for all sorts of options that seem really weird. They don't all break markets.
For example this can be an on-chain fire marshal compliance:
When you enter the room that has a maximum capacity of 1243 people according to fire codes, you get an indivisible token. Its redeemed when you leave.
You then have an automated time-stamped compliance-assurance with the fire code. Hook in Age-coin and you know who can order alcohol without sloppy ink marks on the backs of hands...
That same feature can also be used to create an artificial scarcity on a side chain for other purposes.
There are millions of options, bajillions of use cases.
The SC potential is incredibly vast, touches everything, and is completely mind-blowing in what it can do.
If you think SC can't be the engine of Bitcoin mass adoption like nothing else, you don't grok side chains.
If you think SC can't be the downfall of and lead to the end of Bitcoin, you don't grok side chains.
Odalv, what type of mathematical proof is being used to lock btc in the currently functioning federated server models you claim are in place today? And why would they be considered secure and how well are they functioning?
On one end of the spectrum, if a sidechain's 2-way peg can be severed at the whim of the sidechain devs, it would essentially be an altcoin and would presumably attract about as much investment as altcoins do (not a threat to Bitcoin).
At the other end of the spectrum, if it's mathematically impossible to sever the 2wp, then it is a true sidechain and the value seems to always remain with the Bitcoin ledger (not a threat to Bitcoin, at least not for this reason).
From the description of the SPV proof, to get out of the sidechain it seems like you need to be able to create transaction in the sidechain which burns some sidechain units.At the other end of the spectrum, if it's mathematically impossible to sever the 2wp, then it is a true sidechain and the value seems to always remain with the Bitcoin ledger (not a threat to Bitcoin, at least not for this reason).
If it's possible to block transactions in the sidechains, then it would be possible to prevent sidechain holders from cashing out into the main chain.
In no way is the "Bitcoin's bullet proof BTC/blockchain linkage" broken. The coins aren't actually moved to the other chain, they are held on the mainchain like gold in a vault and a representation which is NOT BTC and can't be spent at coinbase for example, appears on the sidechain.
There is no way sidechains break the 21 million scarcity limit of real BTC. And anything that a sidechain could do to "dilute" the space (that is by creating a new token type) can be done with an altcoin today, and that has gotten nowhere. Any "betrayal" of the BTC "brand" that can be done with sidechains can equivalently be done much more easily (and with the same brand damage) with centralized solutions. We've seen it over and over again; Gox ponzi didn't kill BTC, and SCponzi won't either. But the risk of SCponzi will certainly make the mainchain the preferred place to hold and make large transfers. Sidechains will make Bitcoin the preferred long term store of value, because tremendous utility is just a chain transfer away.
And how is Gox going to go Ponzi when the GoxBTC and GoxUSD on its sidechain must match the BTC "locked" on the mainchain and the USD in their bank accounts (which can be audited)?
If a multi-token sidechain is created with scBTC and inflata-Coin-to-make-devs-rich, what do you think people will do? Probably not even touch the sidechain. But assuming they do, they will hold the scBTC and when they need to "use" the sidechain features the require inflata-coin, they'll buy the inflata-coin moments before spending it.
But without sidechains you really do risk a new token that comes along and takes massive market share. We as a society are not ready to put stocks, mortgages, etc on a blockchain (because why have the risk of a new tech coupled with the return of an old stock). But someday we WILL be. And when we are, what's going to be the preferred payment? Old stodgy BTC that you have to sign up for exchanges, do AML, etc to access real markets, or tradecoin which can be tranformed into GOOG 5 seconds after receipt? There's a REASON gold shot up when ETFs appeared -- its called access to markets.
What about the IOT (internet of things) token? 20 years from now, items in your house might be doing 500 txns per day for a total of < $5 automatically on your behalf... Sidechains allow BTC to scale beyond our wildest dreams to applications we can't even consider.
You are like the guy who said there's only use for 5 computers in the world.
You should instead consider that the biggest risk to BTC right now is the sidechain-altcoin that Blockstream so "kindly" offered to build instead of integrating these technologies directly into BTC. That altcoin has the potential to leave BTC in the backwaters of digital currencies (except that I believe in the core devs in Blockstream to move the tech over).
Ok, that's probably the end of my rant... but my subsequent silence does not mean that you are right :-). Honestly, I miss the great insights you guys (and mostly cypherdoc) provide about the larger world economic picture on this thread and hope that we can eventually get back to it! But I'll tell you this; I'm a technologist and I've skipped from one newly breaking technology to the next for my entire career in startups; gaming, telecom in 1995-2000, storage, wireless, OSHW, bitcoin. I'm telling you if sidechains CAN be done (honestly I haven't really verified the gory details of the automated 2-way peg myself) they WILL eventually be the dominant coin. I proposed them in early 2012 (the concept not the mechanism)... but don't worry to much, BTC will not die; it'll be the Rolls Royce with a valuation above what we have today, while the sidechain-enabled coin takes 99% of the market.
EDIT: tl;dr. Bitcoin is the zerg. It will take over everything thru sidechains.
There is no way sidechains break the 21 million scarcity limit of real BTC. And anything that a sidechain could do to "dilute" the space (that is by creating a new token type) can be done with an altcoin today, and that has gotten nowhere. Any "betrayal" of the BTC "brand" that can be done with sidechains can equivalently be done much more easily (and with the same brand damage) with centralized solutions. We've seen it over and over again; Gox ponzi didn't kill BTC, and SCponzi won't either. But the risk of SCponzi will certainly make the mainchain the preferred place to hold and make large transfers. Sidechains will make Bitcoin the preferred long term store of value, because tremendous utility is just a chain transfer away.
And how is Gox going to go Ponzi when the GoxBTC and GoxUSD on its sidechain must match the BTC "locked" on the mainchain and the USD in their bank accounts (which can be audited)?
If a multi-token sidechain is created with scBTC and inflata-Coin-to-make-devs-rich, what do you think people will do? Probably not even touch the sidechain. But assuming they do, they will hold the scBTC and when they need to "use" the sidechain features the require inflata-coin, they'll buy the inflata-coin moments before spending it.
But without sidechains you really do risk a new token that comes along and takes massive market share. We as a society are not ready to put stocks, mortgages, etc on a blockchain (because why have the risk of a new tech coupled with the return of an old stock). But someday we WILL be. And when we are, what's going to be the preferred payment? Old stodgy BTC that you have to sign up for exchanges, do AML, etc to access real markets, or tradecoin which can be tranformed into GOOG 5 seconds after receipt? There's a REASON gold shot up when ETFs appeared -- its called access to markets.
What about the IOT (internet of things) token? 20 years from now, items in your house might be doing 500 txns per day for a total of < $5 automatically on your behalf... Sidechains allow BTC to scale beyond our wildest dreams to applications we can't even consider.
You are like the guy who said there's only use for 5 computers in the world.
You should instead consider that the biggest risk to BTC right now is the sidechain-altcoin that Blockstream so "kindly" offered to build instead of integrating these technologies directly into BTC. That altcoin has the potential to leave BTC in the backwaters of digital currencies (except that I believe in the core devs in Blockstream to move the tech over).
Ok, that's probably the end of my rant... but my subsequent silence does not mean that you are right :-). Honestly, I miss the great insights you guys (and mostly cypherdoc) provide about the larger world economic picture on this thread and hope that we can eventually get back to it! But I'll tell you this; I'm a technologist and I've skipped from one newly breaking technology to the next for my entire career in startups; gaming, telecom in 1995-2000, storage, wireless, OSHW, bitcoin. I'm telling you if sidechains CAN be done (honestly I haven't really verified the gory details of the automated 2-way peg myself) they WILL eventually be the dominant coin. I proposed them in early 2012 (the concept not the mechanism)... but don't worry to much, BTC will not die; it'll be the Rolls Royce with a valuation above what we have today, while the sidechain-enabled coin takes 99% of the market.
EDIT: tl;dr. Bitcoin is the zerg. It will take over everything thru sidechains.
That's a really persuasive argument from someone I respect.
The other way to question this though is that somehow btc units are fed through the peg and through some magic stocks, bonds , smart contracts, altcoins, etc come out the other side and somehow this is not inflationary? What if it just breaks the entire system?
This, along with Cypherdoc's question pretty much sums up where I am too.
In order to make Bitcoin what it promises to be we do need to chase away the hubris, and look at the real problems.
When identified, they can be monitored and worked.
If there are ways our advancements can be used against us, we need to know them. We should expect that those that would see the Bitcoin experiment fail, will attempt this.
tl;dr
When you can see no evil, you are the evil.
I'm just trying to make incremental progress in my understanding by answering the question "on which ledger is the value stored?" The probability that the 2-way peg is severed is a different discussion.
I think the probability of the 2-way peg being severed is actually central to the definition of "sidechain" vs. "altcoin," and for practical purposes determines investment behavior in the chain.
On one end of the spectrum, if a sidechain's 2-way peg can be severed at the whim of the sidechain devs, it would essentially be an altcoin and would presumably attract about as much investment as altcoins do (not a threat to Bitcoin).
At the other end of the spectrum, if it's mathematically impossible to sever the 2wp, then it is a true sidechain and the value seems to always remain with the Bitcoin ledger (not a threat to Bitcoin, at least not for this reason).
For cases in between, we cannot really call it a true sidechain, and by the same token we cannot really expect substantial portions of the bitcoin holders to just jump over to the sidechain.
In other words, there's a reasoning error to watch out for here: insofar as the value that could be funneled over to the sidechain relies on the certainty that the 2wp will remain, the concern is self-defeating. If there is any shadow of possibility that the 2wp could be broken, it won't attract that many bitcoins - not much more than any altcoin; and if any sidechain does attract a large portion of the bitcoins, it will only be because the 2wp is as certain of a thing in investors' minds as Bitcoin itself is, which is an extremely high bar.
(This does still leave the possibility that the devs could hamstring Bitcoin deliberately to reduce confidence in Bitcoin to bring it in line with confidence in a not completely solid 2wp so that many people would switch despite some uncertainty. However, this is a much smaller argument to be making.)
I thought of tvbcof when I read this:
http://torrentfreak.com/copyright-monopoly-wars-repeat-much-worse-141116/
http://torrentfreak.com/copyright-monopoly-wars-repeat-much-worse-141116/
I think you should stop talking about sidechains, invent altcoins and exchanges or banks if you like, trust-based or automatic.
An altcoin, with an automated bank, issuing exactly the same number of altcoins as bitcoins deposited in the bank. This is the same as the pegged sidechain, but easier to understand, therefore it removes all kinds of futuristic fluff.
An altcoin, with an automated bank, issuing exactly the same number of altcoins as bitcoins deposited in the bank. This is the same as the pegged sidechain, but easier to understand, therefore it removes all kinds of futuristic fluff.
Sure the free market will govern most options, not all will be successful, I am skeptical mainly because of the lack of attention to the downside risks.
That is where I am at also, trying to understand the downsides and risks.
What the cheerleaders miss is that by continuing to ignore the downsides and risks, or to claim that they do not exist, or to suggest that they are unimportant because the upside is so huge....the message is that any problems will not be solved.
Most of us understand the incredible potential of the offering.
However if this thread were any indication...there is very little confidence that there are any adults in the room with them, shepherding this development effort to that potential success by looking out for the pitfalls.
Drama. That's why we have 25,000 denominations of Christianity.
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