Topic: Gold collapsing. Bitcoin UP. - page 797. (Read 2032266 times)

You first must burn bitcoins into SC.

So if you burn 10M of 13M BTC then the rest 3M BTC will increase in scarcity drastically. (3.25 times more scarce)
Then if  scBTC will become worthless and tokens inaccessible then all value(market cap, not tokens) will be returned to BTC.

and i hugely disagree.  you would have to know ahead of time that the SC innovation would at least offset the known decrease in security of the SC due to MM exactly to get a full value transfer from BTC to scBTC in terms of fiat.

we already know from your paper that there will be at least a delay (2d?) due to the contest/confirmation time.  also, the SPV proof is untested, unless you want to claim it's perfect/unhackable right here and now, which would be foolish.  these factors alone will ensure that there is a difference btwn the BTC and scBTC fiat price.  its not an instantaneous transfer.

the guy is not known for his manners.  in fact, if i say one thing, you can be guaranteed he'll just say the opposite to disagree.

I hugely disagree with the belief that sidechains will decrease the value of Bitcoin. Having more uses for the Bitcoin blockchain will almost certainly increase its value, rather than decreasing it.

That's insulting. I've outline why SC will leach value out of Bitcoin and the most viable argument against my point is exchanging value on a side chain. I.e. using side chains as money is using Bitcoin.

It's not no Bitcoin TX fees are paid and the value created by the network effect reside on the SC.

There is no 1:1 peg guarantee. If the SC is inflationary and appeals to a central bank more than Bitcoin they'll use that not BTC. And the minority who want BTC hard money will be eaten for breakfast.

That's an idealistic assumption money laundering can cost much over a 10% burn, unsuspecting traders take the arb.

The mix is better if new virgin players pull the BTC out. So sell the SC token at a discount in fiat. Then the speculators to take advantage of the arb and now you have clean BTC to pull out (exchange)

Something is making the guy soil himself multiple times per day.  Probably being wrong for nearly a year is contributing as stress, but it doesn't really help shed light on the root cause of his malady.

Haven't heard of him, but economists are typically horrible when it comes to speculative calls.

I'm pretty sure that the price difference will be negligible and close to whatever ratio is pegged at protocol. If you are certain that you are right, it seems it is an inevitability that this arbitrage perpetuum mobile will drag Bitcoin to nothingness under the assumption that it will always be valued below the threshold for arbitrage and that this feedback loop will continue forever. Why not sell Bitcoin in that case?

I keep thinking I'm missing something obvious, because this seems a ridiculous train of thought from you. Is the bear market getting to you?

Who her likes Konrad Graf? He is a leading Bitcoin economist.

He said both will be expected to trade in exchanges and probably for different prices. Who are you to disagree?

Correct.  I think its worth clarifying that the peg is algorithmic, because its seems from the thread that some people may not understand that.  You, personally, can ask the network automatically to swap unlimited quantities of BTC on the sidechain for BTC on the main bitcoin chain.

The only reason to swap with users using atomic swaps or trades is to do that faster.  No one is going to take anything other than a negligible price difference because they can click a button and move the coins between chains themselves.

Further because that 2wp backstop is there, and anyone and his dog can do arbitrage, with full confidence that they'll be able to exercise the 2wp and capitalise on the small time-preference, the will be small.  It seems just as likely that the sidechain coins sell at a small premium for the time-preference access to side-chain features.  (Time-preference means someones preference to gain access to something sooner rather than waiting eg 24hrs, and they'll sometimes be willing to pay a small fee to get it earlier, eg check advances or such things).

I dont think it realistic that we would see anyone willing to sell sidechain BTC at anything significantly below par in either direction, to do so is to burn money needlessly.  People will arbitrage it and its open to anyone to arbitrage.  So unless someone wants to burn money (and bitcoin already supports proof of burn or pay to miners if you're into burning money or donating to miners), no one will be offering to swap sidechain BTC for BTC at anything far below or above $350 (assuming current market price of $350).  eg $349.50 to $350.50 might be an example which is 15 basis points, that'd give someone a 15% return on an annual basis with steady arbitrage for a 2 day clearance time on the peg.  They can maybe get a higher return (and hence be willing to offer even lower margins) by holding a float on both sides and cancelling some trades against others as those happen faster so they get more than one arbitrage fee per exercise of the 2wp.

Obviously no one is encouraging anyone to put real money into untested or buggy sidechains.  I dont think there will be lots of sidechains and the main sidechains will be extremely well tested and coded to the same rigor as bitcoin itself.

Adam

Why? People will just move dirty BTC to mixSCBTC, stirr well, and then move them back to mainchain, no?

I think there wont be a need for scBTC <-> fiat exchange. Since coins can be moved to main chain with low cost, it doesn't make much sense to directly trade sc/fiat, does it? As someone else put it: why would anyone sell scBTC when you can just move them back to BTC main chain?

You got it right.

if BTC drops as a result then same happens to scBTC. But I do not know why. The less BTC is available at MC the more scarce BTC are, and the more utility BTC can provide. SC does not print new money.

SC brings new utility. (value)

well then, it's obvious you're putting your priorities and wants above those of the community in general.  in other words, you want the Bitcoin network to provide the security for your localized SC and you don't care if the price of BTC drops as a result.

b/c
advantage:
at the moment I need some utility (e.g. I want trade on exchange, I want buy cofe or gas) =>

I accept:
at the same moment I cannot make international transfers. I can only transact with small group who accepts SC (for some utility).

But how does this work? Is it just a way of destroying Bitcoins without actually destroying them (ie destroying Bitcoin and creating Sidecoins and vice versa creating Bitcoins and destroying Sidecoins, "converting" them 1:1) at the protocol level? I suppose cypherdoc's argument is that assuming Sidecoins will be valued less than Bitcoins of equal convertible value, people will be arbitraging that.

If I have understood correctly, then this doesn't seem a problem. To profit off this arbitrage, you need to buy Sidecoins (for USD say) and sell them for Bitcoins (selling those again). Thus the price has to rise to a level where friction prohibits arbitrage. It sounds like we're discussing a perpetuum mobile here. Either that, or I still misunderstand.