Gold collapsing. Bitcoin UP. - page 719.

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: cypherdoc on November 14, 2014, 11:55:45 AM

SC's only work in theory if they can be confined to "utility" chains as brg444 has defined them, ie, SC's w/o an altcoin that just processes tx's with enhanced features like fast tx or anon. but since these utility chains won't make money for their devs, and IF no other speculative SC's will be formed, then you don't need a Blockstream for profit would you?

Absolutely not true. Plenty of corporate sidechains can be created that are not speculative and create a semi-controlled environment defined by the clients' use that uses the BTC currency as its fuel.

Quote from: cypherdoc on November 14, 2014, 11:55:45 AM

i'm perfectly aware of that. but centralized entities encourage usage of the SPVproof, as brg444 and the whitepaper have already suggested, as they are more secure (MM) and they are decentralized. we've already seen this incentive live with the Truthcoin example.

What is this obsession you have with Truthcoin? They are an obvious scam that will never get any traction.

Quote from: cypherdoc on November 14, 2014, 11:55:45 AM

think about it. it's only realistic that utility chains can be MM'd. that's b/c the data requirement and work involved would be too much to MM ALL SC's in existence which will be in the thousand/billions. therefore, MM will be confined to perhaps 2 utility chains that make Bitcoin better as money, fast tx and anon debatedly.

all other speculative SC ledgers will be maintained by their owners. owners who have paid Blockstream good money (USD's) to construct their SC. they will be less secure as they won't be mined by third party independent mining auditors ala Bitcoin miners. the only way for these types of SC entities survive is by attracting BTC to their scBTC. the more the better. the more retention the better. this take tx fees away from Bitcoin miners which is bad. the Blockstream biz model depends on this siphoning of BTC -->scBTC for the survival of their clients. otherwise they don't make money.

thousand/billions of sidechains, yea right. this makes no sense and is an obvious stretch of reality.

as much as you'd like it to be different. speculation is a niche. preservation of value is in the majority's interest.

for this reason, it is straight up disingenuous to suggest that speculative schemes will siphon most of the value out of BTC.

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: _mr_e on November 14, 2014, 12:34:25 PM

Quote from: cypherdoc on November 14, 2014, 12:31:50 PM

btw, since everyone around here seems to not mind for-profits changing the source code to their own advantage, why don't we increase OP_return back up to 80 bytes, from 40 bytes, so that Counterparty can fit back in their tx proofs for their share issuance that they were so badly depending on, so as to further their profit model? Roll Eyes

I honestly don't know if sc is the right way to go or not. But I do know that the network runs on consensus. If it agrees to allow sc while denying the 80 bytes, then that is what the consensus has decided. It isn't something that can be argued or reasoned with.

the question then becomes, the consensus of who?

those who participate in this thread or those who participate in the dev email lists and IRC channels? or the consensus of the community at large?

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: brg444 on November 14, 2014, 12:31:35 PM

Quote from: cypherdoc on November 14, 2014, 11:38:54 AM

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

mostly all of your arguments are shown to be irrelevant if we consider that sidechains can be implemented today without the SPV proof.

bitcoins being converted to represent assets is not a new proposition and something that will exist sidechain or not.

that would be true.

i don't have any problem with SC's being implemented thru federated servers as they don't involve changing source code. but as soon as you do change source, as with SPVproofs, all sorts of unpredictable things start happening as i've outlined.

currently, when BTC gets "exchanged" for assets, those BTC just change hands and still exist on the MC and remain secure and can continue to circulate. SC's introduce another dynamic completely. BTC's get siphoned off MC to speculative SC's created by Blockstream for insecure, potentially dishonest entities. it's conceivable these entities will be gvts as Austin has said. in this case, BTC's essentially get converted into whatever asset the SC is offering. this destroys Bitoin's Sound Money principles. the key to this dynamic is the SPV proof.

_mr_e

legendary

Activity: 817

Merit: 1000

Quote from: cypherdoc on November 14, 2014, 12:31:50 PM

btw, since everyone around here seems to not mind for-profits changing the source code to their own advantage, why don't we increase OP_return back up to 80 bytes, from 40 bytes, so that Counterparty can fit back in their tx proofs for their share issuance that they were so badly depending on, so as to further their profit model? Roll Eyes

I honestly don't know if sc is the right way to go or not. But I do know that the network runs on consensus. If it agrees to allow sc while denying the 80 bytes, then that is what the consensus has decided. It isn't something that can be argued or reasoned with.

cypherdoc

legendary

Activity: 1764

Merit: 1002

btw, since everyone around here seems to not mind for-profits changing the source code to their own advantage, why don't we increase OP_return back up to 80 bytes, from 40 bytes, so that Counterparty can fit back in their tx proofs for their share issuance that they were so badly depending on, so as to further their profit model? Roll Eyes

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: cypherdoc on November 14, 2014, 11:38:54 AM

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

mostly all of your arguments are shown to be irrelevant if we consider that sidechains can be implemented today without the SPV proof.

bitcoins being converted to represent assets is not a new proposition and something that will exist sidechain or not.

shields

full member

Activity: 164

Merit: 100

Quote from: Erdogan on November 13, 2014, 05:29:13 PM

Bitcoin is money - I am with cypher on this one.

Speaking of currencies, this good article suggests the yen is the first to go, of the big currencies. I see no flaws in this article:

http://davidstockmanscontracorner.com/bojs-yen-trashing-will-ignite-a-tital-wave-of-asian-devaluation-and-deflation/

I haven't even clicked the link and I see a flaw in the title, or should I say 'tital'.

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: _mr_e on November 14, 2014, 12:16:37 PM

Quote from: cypherdoc on November 14, 2014, 12:13:01 PM

Quote from: notme on November 14, 2014, 11:32:07 AM

I don't think you understand their business model very well. The have an obligation to profit, yes. But their business is developing new capabilities by extending the Bitcoin platform. In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable. A dairy farmer doesn't eat his cattle.

damn formatting:

i understand it completely. it's conflicted and it may not even be intentional.

think about it. it's realistic that only utility chains can be MM'd. that's b/c the data requirement and work involved would be too much to MM ALL SC's in existence which will be in the thousand/billions. therefore, MM will be confined to perhaps 2 utility chains that make Bitcoin better as money, fast tx and anon debatedly.

all other speculative SC ledgers will be maintained by their owners. owners who have paid Blockstream good money (USD's) to construct their SC. they will be less secure as they won't be mined by third party independent mining auditors ala Bitcoin miners and therefore you have to "trust" them. the only way for these types of SC entities survive is by attracting BTC to their scBTC. the more the better. the more retention the better. this take tx fees away from Bitcoin miners which is bad. the Blockstream biz model depends on this siphoning of BTC -->scBTC for the survival of their clients. otherwise they don't make money.

Then who in their right mind would ever send their btc to these chains?

we don't know. but we do know that it will have to be Blockstreams mandate to make it so. otherwise, they don't make money constructing SC's.

_mr_e

legendary

Activity: 817

Merit: 1000

Quote from: cypherdoc on November 14, 2014, 12:13:01 PM

Quote from: notme on November 14, 2014, 11:32:07 AM

I don't think you understand their business model very well. The have an obligation to profit, yes. But their business is developing new capabilities by extending the Bitcoin platform. In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable. A dairy farmer doesn't eat his cattle.

damn formatting:

i understand it completely. it's conflicted and it may not even be intentional.

think about it. it's realistic that only utility chains can be MM'd. that's b/c the data requirement and work involved would be too much to MM ALL SC's in existence which will be in the thousand/billions. therefore, MM will be confined to perhaps 2 utility chains that make Bitcoin better as money, fast tx and anon debatedly.

all other speculative SC ledgers will be maintained by their owners. owners who have paid Blockstream good money (USD's) to construct their SC. they will be less secure as they won't be mined by third party independent mining auditors ala Bitcoin miners and therefore you have to "trust" them. the only way for these types of SC entities survive is by attracting BTC to their scBTC. the more the better. the more retention the better. this take tx fees away from Bitcoin miners which is bad. the Blockstream biz model depends on this siphoning of BTC -->scBTC for the survival of their clients. otherwise they don't make money.

Then who in their right mind would ever send their btc to these chains?

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: notme on November 14, 2014, 11:32:07 AM

I don't think you understand their business model very well. The have an obligation to profit, yes. But their business is developing new capabilities by extending the Bitcoin platform. In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable. A dairy farmer doesn't eat his cattle.

damn formatting:

i understand it completely. it's conflicted and it may not even be intentional.

think about it. it's realistic that only utility chains can be MM'd. that's b/c the data requirement and work involved would be too much to MM ALL SC's in existence which will be in the thousand/billions. therefore, MM will be confined to perhaps 2 utility chains that make Bitcoin better as money, fast tx and anon debatedly.

all other speculative SC ledgers will be maintained by their owners. owners who have paid Blockstream good money (USD's) to construct their SC. they will be less secure as they won't be mined by third party independent mining auditors ala Bitcoin miners and therefore you have to "trust" them. the only way for these types of SC entities survive is by attracting BTC to their scBTC. the more the better. the more retention the better. this take tx fees away from Bitcoin miners which is bad. the Blockstream biz model depends on this siphoning of BTC -->scBTC for the survival of their clients. otherwise they don't make money.

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: BldSwtTrs on November 14, 2014, 11:53:19 AM

Quote from: cypherdoc on November 14, 2014, 11:38:54 AM

Quote from: _mr_e on November 14, 2014, 11:29:33 AM

Quote from: cypherdoc on November 14, 2014, 11:14:07 AM

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.

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.

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?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

You are talking of a case where : market cap of [BTC pre Sidechain release] = market cap of [BTC chain + SC]
Then indeed value will flow from a secure chain to a less secure chain which will undermine the whole system.

But the purpose of SC is to create value, so we can expect that:
Market cap of [BTC chain + SC] > market cap of [BTC pre Sidechain release]
Where the delta of the total value doesn't come from a zero sum game between BTC and SC, but from a positive sum game where value is added because of new SC's features.

the question is, create value for who? and at what cost?

if the "stated" intentions of Blockstream is to create value for Bitcoin and not Blockstream, then they should restructure as a non-profit. or create SC's as a public service. b/c that's the other important point here: imo, Bitcoin has evolved to a point where it has become a public good. it is a form of Sound Money that cannot, in the slightest, be perceived to have any improprieties or self interested groups in control. that is, if we want nations and ppl of all strata to buy in. Blockstream for profit violates this.

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: notme on November 14, 2014, 11:44:13 AM

Cypher only believes in the free market when it helps make his case.

what free, and i'll add fair, market allows a for profit bunch of insiders to go in and change the rules of the game (yes, the protocol) to facilitate their own business model? are you that dense?

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: notme on November 14, 2014, 11:42:50 AM

Quote from: cypherdoc on November 14, 2014, 11:38:54 AM

Quote from: _mr_e on November 14, 2014, 11:29:33 AM

Quote from: cypherdoc on November 14, 2014, 11:14:07 AM

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.

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.

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?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

Again, SPV proofs are only needed for decentralized sidechains. These will be mined by independent, distributed, third party mining auditors.

who will mine these decentralized SC's? seriously. Bitcoin miners are only incentivized to mine for BTC as money. we've already agreed they will only mine those utility chains that enhance that function of money, not speculative SC's who take advantage of the SPV proof to advertise themselves as "decentralized or more secure".

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: notme on November 14, 2014, 11:32:07 AM

Quote from: cypherdoc on November 14, 2014, 11:14:07 AM

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.

I don't see this assumption. The assumption is that the ledger can be extended. BTC are locked, creating an entry on a subledger. Only by proving the validity of the subledger can the BTC be unlocked. I don't see how this breaks Bitcoin as money.

SC's only work in theory if they can be confined to "utility" chains as brg444 has defined them, ie, SC's w/o an altcoin that just processes tx's with enhanced features like fast tx or anon. but since these utility chains won't make money for their devs, and IF no other speculative SC's will be formed, then you don't need a Blockstream for profit would you?

Quote

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.

Centralized entities have no need for a SPV proof, the federated model using m-of-n bitcoin addresses will work just fine for them. BTW, this is still a SC under the definitions given in the paper, and it can be done today.

i'm perfectly aware of that. but centralized entities encourage usage of the SPVproof, as brg444 and the whitepaper have already suggested, as they are more secure (MM) and they are decentralized. we've already seen this incentive live with the Truthcoin example.

Quote

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?

The only way "all the bitcoin" will move to a sidechain is if the sidechain is obviously better than BTC. If that's the case, why not upgrade? Your BTC will be convertible. I see no losers here.

converting is highly risky. especially to those who don't pay attention to Bitcointalk or Reddit on a regular basis. this was the exact reason the proposal to harvest "supposedly" inactive address balances has been shot down many times. it's risky and unnecessary to force a widespread migration to an improved SC.

Quote

If "all the bitcoin" move to many sidechains, BTC is still needed as the backbone to move between the different sidechains. That's where the fees will come in, and maintaining a limited block size will ensure they are high enough.

no, we've already learned that scBTC can move btwn other SC's. they don't "ever" have to come back to MC.

Quote

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

I don't think you understand their business model very well. The have an obligation to profit, yes. But their business is developing new capabilities by extending the Bitcoin platform. In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable. A dairy farmer doesn't eat his cattle.

i understand it completely. it's conflicted and it may not even be intentional.

think about it. it's only realistic that utility chains can be MM'd. that's b/c the data requirement and work involved would be too much to MM ALL SC's in existence which will be in the thousand/billions. therefore, MM will be confined to perhaps 2 utility chains that make Bitcoin better as money, fast tx and anon debatedly.

all other speculative SC ledgers will be maintained by their owners. owners who have paid Blockstream good money (USD's) to construct their SC. they will be less secure as they won't be mined by third party independent mining auditors ala Bitcoin miners. the only way for these types of SC entities survive is by attracting BTC to their scBTC. the more the better. the more retention the better. this take tx fees away from Bitcoin miners which is bad. the Blockstream biz model depends on this siphoning of BTC -->scBTC for the survival of their clients. otherwise they don't make money.

BldSwtTrs

legendary

Activity: 861

Merit: 1010

Quote from: cypherdoc on November 14, 2014, 11:38:54 AM

Quote from: _mr_e on November 14, 2014, 11:29:33 AM

Quote from: cypherdoc on November 14, 2014, 11:14:07 AM

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.

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.

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?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

You are talking of a case where : market cap of [BTC pre Sidechain release] = market cap of [BTC chain + SC]
Then indeed value will flow from a secure chain to a less secure chain which will undermine the whole system.

But the purpose of SC is to create value, so we can expect that:
Market cap of [BTC chain + SC] > market cap of [BTC pre Sidechain release]
Where the delta of the total value doesn't come from a zero sum game between BTC and SC, but from a positive sum game where value is added because of new SC's features.

notme

legendary

Activity: 1904

Merit: 1002

Quote from: _mr_e on November 14, 2014, 11:41:11 AM

Quote from: cypherdoc on November 14, 2014, 11:38:54 AM

Quote from: _mr_e on November 14, 2014, 11:29:33 AM

Quote from: cypherdoc on November 14, 2014, 11:14:07 AM

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.

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.

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?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

Won't the free market take those things into account making scBtc less valuable and higher risk? And those who stayed in btc have their value rise?

Cypher only believes in the free market when it helps make his case.

notme

legendary

Activity: 1904

Merit: 1002

Quote from: cypherdoc on November 14, 2014, 11:38:54 AM

Quote from: _mr_e on November 14, 2014, 11:29:33 AM

Quote from: cypherdoc on November 14, 2014, 11:14:07 AM

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.

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.

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?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

Again, SPV proofs are only needed for decentralized sidechains. These will be mined by independent, distributed, third party mining auditors.

_mr_e

legendary

Activity: 817

Merit: 1000

Quote from: cypherdoc on November 14, 2014, 11:38:54 AM

Quote from: _mr_e on November 14, 2014, 11:29:33 AM

Quote from: cypherdoc on November 14, 2014, 11:14:07 AM

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.

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.

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?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

Won't the free market take those things into account making scBtc less valuable and higher risk? And those who stayed in btc have their value rise?

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: _mr_e on November 14, 2014, 11:29:33 AM

Quote from: cypherdoc on November 14, 2014, 11:14:07 AM

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.

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.

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?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

notme

legendary

Activity: 1904

Merit: 1002

Quote from: cypherdoc on November 14, 2014, 11:14:07 AM

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.

I don't see this assumption. The assumption is that the ledger can be extended. BTC are locked, creating an entry on a subledger. Only by proving the validity of the subledger can the BTC be unlocked. I don't see how this breaks Bitcoin as money.

Quote

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.

Centralized entities have no need for a SPV proof, the federated model using m-of-n bitcoin addresses will work just fine for them. BTW, this is still a SC under the definitions given in the paper, and it can be done today.

Quote

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?

The only way "all the bitcoin" will move to a sidechain is if the sidechain is obviously better than BTC. If that's the case, why not upgrade? Your BTC will be convertible. I see no losers here.

If "all the bitcoin" move to many sidechains, BTC is still needed as the backbone to move between the different sidechains. That's where the fees will come in, and maintaining a limited block size will ensure they are high enough.

Quote

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

I don't think you understand their business model very well. The have an obligation to profit, yes. But their business is developing new capabilities by extending the Bitcoin platform. In order to continue offering services extending the Bitcoin platform, they have to ensure the Bitcoin platform remains viable. A dairy farmer doesn't eat his cattle.

Topic: Gold collapsing. Bitcoin UP. - page 719. (Read 2032266 times)