I am only able to sample this thread lately due to time constraints so I apologize if my responses have already been covered.
the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.
But its not really separated is it? The BTC unit remains on the mainchain, "locked", essentially backing the sidechain. Its like paper gold being backed by phys, except that it impossible to hide naked paper. As a one-time holder of phyz gold and silver, I imagine that you'd agree that problems with the paper are unlikely to significantly affect the actual gold in your vault, except perhaps by removing value that the paper conferred (that is, many people think that gold ETFs drove the rise due by opening a larger market, and of course that additional value also floated phys).
yes, we have been through this, that's how thoroughly we've all picked this apart. i think it's conceptually constipating to stop your view of what's happening at the SPVproof (spvp) border, as if those BTC's always remain on the MC. no, it's much more illuminating and as a laxative to view the spvp as an offramp into another speculative asset (defined as anything other than BTC which is the only sound hard money) such as Cashcoin, Truthcoin, votecoin, stocks, bonds, prediction markets, anything else. as well, your model implies that someday these have to just be unlocked on a journey back to mobile BTC. not true, whatever emerges on the other side of the spvp may never come back as Bitcoin has been forever changed by the mere insertion of the spvp. i think that mere insertion forever breaks the Bitcoin concept as Sound Money. it's like throwing the front door of your cattle barn wide open. at first, nothing happens. but once the cattle realize they are no longer safe from wolves entering, they start wandering out until you eventually get a stampede.
Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.
their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.
I would prefer the devs work independently too, but reality isn't perfect. But again, the BTC are not "flowing off" the Bitcoin ledger... BTC is simply being used to transparently back another chain.
see above.
there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?
If there really will be 1000 entities who need sidechains, we now have 1000 additional uses for Bitcoin which will massively increase demand for coins and resulting in a huge price increase. This is a great problem to have.
We already imagine that if Bitcoin gains a large pct of the world's txns, it may not scale, resulting in high txn fees, and therefore may end up being used mostly for large transfers. In your 1000 entities scenario, the only difference is that instead of large opaque transfers (we don't know anything about the BTC transfer just that it happened), we can see that X coins moved from SC A to SC B.
But running a SC does have overhead and risk. It seems obvious to me that companies will use the mainchain if possible (that is, it scales and can capture the transaction).
You can't stop innovation. If in the SC future there will be 1000 sidechains backed with Bitcoin, in the non-SC future there will be 1000 altcoins, and Bitcoin's market cap will be 1000 times lower then it could have been.
brg444 has also changed his argument to "there will only be Blockstream creating 2 utility SC's to now there will be a bunch of Blockstream-like companies like Google, IBM producing SC's in droves". i believe this new backpedaled theory is what will happen. that's b/c the spvp has inserted a costless, riskless, backdoor offramp which breaks Bitcoin's hard money security and allows a siphoning of value to these 1000's of SC's as new speculative assets.
once we allow that offramp to be inserted into the source code, it's game over.
