Topic: Gold collapsing. Bitcoin UP. - page 781. (Read 2032266 times)

Just to carry on this idea, I think this is something most of you fail to realize.

Any innovative feature ported to a 1:1 chain will inevitably succeed over a sidecoin.

Users will congregate to the safest, most risk-adverse chain and the one with a deterministic, floating peg is certainly not it.

Miners will MM only the most popular chain where there is sufficient value therefore there are considerable chances that miners will have no incentive to secure the sidecoins considering it is doubtful they will attract any user in the long run.

Exactly. A state would choose a sidecoin as (dare I say) cryptofiat. They would exchange for BTC at the border.

to be honest I don't see it.

from the quote you posted I understand that a sidechain could contain different units, some that are pegged 1:1 with BTC and others that have a deterministic, floating exchange rate.

if that is the case, then I don't see the use case for such a scheme. if one wants to use the feature on such a sidechain then he would want to use the unit which carries a 1:1 peg and not the sidecoin. if, for any reason, the amount of available 1:1 units on that sidechain are limited then someone will clone the sidechain and remove the cap.

sidecoins create no incentive for the user, only additional risk.

if they have the choice between two sidechains promoting the same feature, one using a sidecoin and the other a 1:1 2wp, then the 2wp wins every time

i know that.  i never claimed that a sidecoin needed to be exchanged for BTC.  those factors don't change my argument at all, that being Bitcoin miners will be encouraged to MM initially and defect eventually given a successful SC as i have defined it.

The moment an additional coined is issued on the sidechain that cannot be redeemed 1:1 with BTC ALL the coins on that sidechain become sidecoins.

pg 11 Complexity:

On the level of assets, we no longer have a simple “one chain, one asset” maxim; individual
chains may support arbitrarily many assets, even ones that did not exist when the chain was first
created. Each of these assets is labelled with the chain it was transferred from to ensure that their
transfers can be unwound correctly.

I will be honest I haven't looked into OT in much details but if I understand it right, can the same concern you guys parade around not be applied to OT as well?

If OT gains traction and develops innovative utilities then is it not right that most txs would occur on their network and would be even more dangerous for the miners than SCs?

I'm not sure I understand your last comment. Value is not inflated using utility chains working with a 1:1 peg, the ledger is preserved and no additional coins are created.

the dev can design the peg and the SC with any properties he wants.  he could design the exact scenario i outline; a SC with a 1:1 peg for BTC <--> scBTC that also issues a block reward for a new sidecoin while at the same time processing scBTC and sidecoin tx for fees.

this would definitely attract MM initially, and if highly successful, defecting Bitcoin miners who direct mine the SC.

I don't believe this is quite exact.

A SC with a sidecoin will reward BTC locked into this sidechain with a deterministic amount of scBTC (not 1:1). For example 1 BTC will get you 5000 scBTC. From that point on these sidecoins have a floating exchange rate. If the sidechain fails to attract speculators/users than the exchange rate is more expensive ex: it now cost you 10000 scBTC to redeem 1 BTC.

For that reason, sidecoins are exactly like altcoins

how are those cheep coins working for you   OT can be as decentralized as using a BitTorrent client to assess the BitTorrent network, 100%  decentralized, and available without a prototypical change why so insistent SC are better?  

FYI inflation in value on a SC is what prevents one converting back into BTC, one want to use the value enabled by the SC, and if it isn't there you want to convert back the BTC.

Maybe I should repeat again? Sidecoin = altcoin. Same dynamics. Floating exchange rate with BTC and all. So MM an altcoin more risky than MM a sidecoin?

Absolutely not.

Nikkei +657 (4%)


 

you're not reading properly.  a SC with a sidecoin can also accept scBTC.  it's the scBTC that have the 2wp, as you say.  therefore, any miner mining the SC gets 3 revenue streams; scBTC and sidecoin tx fees and sidecoin block rewards.  this is why they will MM and eventually directly mine if enough scBTC appears on the SC.

 

You were wrong by your first sentence, should I continue reading?

Sidecoins do NOT guarantee that the scBTC can get back to the BTC. Sidecoins have a floating peg and not a 1:1 2wp.

Utility sidechains (1:1) peg have no inflation and are more decentralized than OT is.


I win?

Inflation on the sidechain is not affecting the mainchain 

no, your logic fails you again.

if faster tx times is implemented WITHOUT security tradoff to the SC then it makes perfect sense that the mainchain would incorporate the feature natively.

since you refuse this scenario, then indeed, as mentionned in the whitepaper, the scBTC might attract considerable, even the majority of the coin.

BUT

[/i]

The price of scBTC will NOT riser faster than BTC's since a BTC can claim a 1:1 stake in the SC so they are effectively worth the same.

brg444, what is you critique of doing all the things you like about SC with Open-Transactions http://opentransactions.org/wiki/index.php/Main_Page, and none of the inflation?

brg444,

the difference btwn an altcoin as it exists today and a sidecoin that could exist on a SC tomorrow is a direct link to the Bitcoin network via the 2wp.  b/c the 2wp guarantees that scBTC can get back to BTC (theoretically), users will be encouraged to migrate to the SC to utilize the innovation and pay scBTC tx fees.  and they will be incentivized to stay there b/c of the 2wp.  initially, i believe these scBTC will be valued lower than BTC in fiat terms b/c they are indeed less secure and arbing can be expected to drag down the BTC price.  however, as time advances and if the innovation is significantly proven to be useful and confidence in security of the SC increases, more and more ppl will convert to scBTC.  you yourself concluded this should drive up the fiat price and i agree.  this should feed on itself to the point that everyone will perform their tx's on the SC if the Bitcoin core devs do nothing to update the MC with the innovation.  this would destroy Bitcoin miners over the long run as their block rewards diminish along with defecting tx fees.  how and when will they devs decide to upgrade the protocol?  they need consensus which you've already said is impossible.  will they do it under pressure, panic?  when 40, 50, or 60% of all BTC have become scBTC?  maybe it will be too late or maybe it gets blocked by Blockstream core devs b/c their biz model depends on SC development and success?  can you imagine how many $millions it would be worth to Blockstream if all BTC hodlers ended up having to move to a SC they had helped conceive and build?  who knows, i don't see it as guaranteed and i surely see the process as potentially being conflicted.  

MM an altcoin as it's defined today is seriously risky and not worth the trouble for Bitcoin miners.  MM a sidecoin adds additional badly needed revenue to struggling smaller miners who will be more willing to defect to a sidecoin.  the revenue stream will be more easy to envision for these miners.  the other difference is that no, Bitcoin miners can't just simply start mining an altcoin today if they wanted to.  the altcoin's protocol has to be specifically modified by the altcoin devs to accept Bitcoin DMMS.  i don't see them offering this to Bitcoin miners so that's why it's not happening.  since sidecoins represent a direct link to the Bitcoin MC for BTC users to convert to scBTC, the process is simpler and worth more to miners b/c they can mine not only sidecoin reward & tx fees but scBTC tx fees as well.  

duh!

they will mine both chains!

one more comment like this and you've officially turned into a troll