Topic: Gold collapsing. Bitcoin UP. - page 809. (Read 2032266 times)

market participants can follow the money:  https://blockchain.info/address/1i7cZdoE9NcHSdAL5eGjmTJbBVqeQDwgw


These two would have to be done with printed fiat to maintain the risk-free put.  So basically they would have to steal from others to pull this off, which they are good at doing.



I think this attack is an extreme long shot, but a possibility I suppose.  IMO, the benefits of side chains outweigh the risks.  I would prefer decentralized side chains without changing existing core code, but from what I understand, that can't be done.  So their proposal is the next best thing.  We have known for a while that bitcoin needs to scale somehow.  Whether SCs, TCs, increasing the block size limit, or a combination is necessary, bitcoin needs to scale to become a global reserve currency (I prefer the term backbone currency as I believe we should scrap as much legacy terminology as possible... the current fiat train wreck needs to be forgotten).  Technically bitcoin is still in beta.  This could be the last major change necessary for a finished product. 

  apparently its now a 144,000 BTC question!

that fist with TBI's leek before EmTygox was imploded. 2 more to go.

first, some general observations of the current state of Bitcoin. as it is, the MC network is running at its top and peak efficiency.  that being,

1.  most BTC are being held safely tucked away in cold storage wallets all over the world. this is a result of 5.5 yrs of time, work, and accumulative effort on behalf of these holders/savers.  in fact, these saved BTC should be viewed as being held in equilibrium with those BTC being used for more active speculation and day trading.  there is a delicate balance going on here from a market perspective which leads to what we call the price.  anything that forces those BTC to be mobilized from cold storage would cause severe volatility and most likely a decrease in value as it would indicate a market perception that something significantly different has been introduced into the system.
2.  mining hardware and infrastructure build out has gone thru an impressive and exponential rise over the last several years also based on a tremendous amount of work and investment capital put at risk.  this is ensuring the security of the entire Bitcoin concept and encouraging savers and speculators to hold their Bitcoin based on the confidence in these miners. this mining, directed solely at the MC at the moment, can also be considered to be in a delicate equilbrium.  anything that disturbs this equilibrium will cause volatility and most likely loss in the value.
3.  in this sense, one could conceptually visualize Bitcoin as a runaway train that continues to speed ahead, just out of reach of attackers who wish to kill it.  it is critical that Bitcoin always stays just that bit ahead of its attackers in terms of its mining capabilities (for security purposes) and in the development of its cryptography (also for security purposes).  anything that introduces volatility into this situation and causes Bitcoin to deviate from this continual forging ahead has the potential to derail the entire system as it will destroy value.

the above assumptions have resulted in an optimum distribution of coins for all Bitcoin participants into the MC.  this is a good thing, despite how some detractors have tried to label holders/savers as hoarders which, imo, is a blatant attempt at denigration as well as a misunderstanding of Bitcoin economics.  i won't go into that debate as it has been flushed out numerous times previously that "hoarders" are not hurting Bitcoin, and may in fact be helping Bitcoin. these peoples willingness to hold and thus value BTC helps support and drive the price upwards. these holders/savers have taken significant time and effort to store these BTC in cold wallets, sometimes in secure locations spread out all over the world. these people represent Bitcoin's most ardent supporters and are encouraged by the current growth in the system, specifically in mining, which protects their savings. having to mobilize these BTC's in the case of economic uncertainty or volatility introduced by a change in the Bitcoin ecosystem will cause these BTC to be exposed to hacking attempts and potential loss in value.

anything or anyone proposing a change to the Bitcoin ecosystem that disrupts this delicate economic mining equilibrium that we have achieved since Bitcoin's inception has to be put under severe scrutiny to demonstrate and prove, as close to a shadow of a doubt, that what they are proposing truly represents ground breaking innovation while at the same time demonstrating that they have considered all adverse economic scenarios that result as a consequence.  and with good reason.  with close to $5 billion in market cap at risk, an incorrect economic assumption resulting from a mistake in implementing a code change could lead to disaster. in fact, anything that causes increased volatility in this delicate balance has a significant chance of harming current Bitcoin holders.

Conceptually...   Yes.  It is an interesting concept.  Proof of that, is that we are even taking up pages about it here, and it is pretty off-topic.
It will have an interesting journey from concept to market reality.
At the moment, it remains a concept.
I like the concept, the details will be very important to implementing it.   It would be very easy to get it wrong, and underestimating the challenge it presents would be at our own peril.
The most likely outcome is that it will add value to bitcoin, and subtract some value from some speculators.

And I haven't read one reasonable reason why Sidechains should absolutely not happen.

Only farfetched scenarios that necessitate collusion of the majority of the network to happen.

Given the obvious value proposition of the different aspects of sidechains (which you are not honest if you choose to ignore) I would say it is only fair to give the runner a chance to prove itself.

But they are not saying that in the way you suggest they are. Their point is not that Bitcoin the blockchain doesn't need "bitcoin" the asset but that the asset should not have to be tied only to the Bitcoin blockchain but could, conceptually, be used on other blockchains.

This isn't doing anything to promot the innovation SC are supposed to represent.

I haven't read of one example where they provided an economic innovation that cannot be done with existing tech.

Instead some chose to insult me by PM, rather than give comment to my posts.

back to my favorite topic, that of Sidechains.  

i've provided the reasoning behind a very simple speculative or malicious economic/non-economic attack scenario and have provided the 5 "M's" as justification.  i'm not saying something like this will work, i'm just saying it is a possibility that needs to be considered and certainly one which i've never heard any of the core devs making this proposal even talk about:

1.  Method:  exploit the economic concept of a risk free put provided by the 2 way peg
2.  Means:  gvt has a 143000 BTC address which they could use to pump into a SC causing, at the least, considerable uncertainty around Bitcoin's MC future.  more likely, they could spark a run out of BTC into scBTC as the rest of us would seek or be forced to exploit the risk free put as well.  an independent whale could also spark this run, i would say, depending on how much many BTC they have and if they want to take some additional risk with fiat buying.
3.  Mining:  mining might be predicted to follow the move as we are currently over-secured and many miners are losing money as we speak.  defecting over to a SC is not out of the question as they would be early adopters of a nascent, possibly more innovative SC that might obsolete the MC while being paid the same, if not more, via a sidecoin subsidy and scBTC tx fees that have the potential to increase greatly in price.
4.  Money:  gvt could partner with Wall St who could start buying scBTC and their preferred form of sidecoin with printed fiat more fitting of their long term objectives as financial elite.  their objective is to drive the price in an attempt to cause a run on BTC from the MC to the SC.  they would be rewarded by buying scBTC while it is lower in price compared to BTC in the early stages.  also sidecoin prices would be initially expected to be low as well.
5.  Motive:  gvt/Wall St could destroy the Bitcoin MC via the forced migration of BTC to scBTC by causing volatility and fragmentation of mining security assisted with 51% attacks.  this would be expected to drive the BTC price down.

fundamentally, i disagree with the core observation of the Sidechain Whitepaper which originally stated (interestingly, it seems they've changed it):

"the core observation is that “Bitcoin” the blockchain is conceptually independent from “bitcoin” the asset: if we had technology
to support the movement of assets between blockchains, new systems could be developed which
users could adopt by simply reusing the existing bitcoin currency"

http://www.blockstream.com/sidechains.pdf

as i've said since the start of my participation in Bitcoin: Bitcoin the currency is inextricably linked and intertwined with its blockchain.  the blockchain is nothing without the currency.

i'd also flip that around by saying that Bitcoin the currency is nothing without its blockchain.

given all the potential risks and complexities introduced by Sidechains, are they something we should be serious about?

The latter 

THAT is the 64,000 BTC question!

I'm not sure what you're saying is he a government Trojan or an unsuspecting Bitcoin Trojan for government?

It seems so

https://twitter.com/jonmatonis/status/527846975769956352


Something big is brewing.

I expect he will join the board of a possibly TBA Bitcoin company. Might be announced no later than by next week at Money2020.

i''m gonna warn you right now, we've got several divergences going on in the main indices right now.  we've got the Dow Theory non-confirmation i've been talking about.  only the $DJT has set new highs yet is looking to pull back under its previous high.  also, we've got the RUT down today.  remember how it was leading to the downside to begin with which i detected months ago.  also the gold and silver selloff means Deflation. :

i put this podcast up with Krugman the other day:

http://www.bloomberg.com/podcasts/masters-in-business/

i forgot to mention that the Nobel Prize Winner in Economics acknowledges and despises, of all things, paid internet trolls!  AND he spends a considerable amount of time talking about them!

who said they don't exist?

frickin A, man!:

Granted.

OTOH, not all my posts are on this forum (https://blog.conformal.com/monetas-brings-colored-coins-to-btcd/), and not all my schemes have been made public yet.

ok, you want some PM porn?  here you go. oh Lordy:

the most i'll give on that is "equally hard".  altho you might want to get your post count up