http://konradsgraf.squarespace.com/storage/Monetary%20analsyis%20of%20sidecoins%20KG%2024Oct2014.pdf
thank you.
very very helpful.
Topic: Gold collapsing. Bitcoin UP. - page 832. (Read 2032266 times)
Thanks, that is a clear explanation of Side Chains.
Seen this yet?
https://download.wpsoftware.net/bitcoin/alts.pdf
lol.
That's Andrew Poelstra's "A Treatise on Altcoins". He's even harsher than many of us in this thread! He's also listed as an author on the sidechains whitepaper.
https://download.wpsoftware.net/bitcoin/alts.pdf
Quote from: 'Andrew Poelstra'
Of course, “developing your own cryptosystem” is the purview of only cranks and researchers, so it was reasonably assumed that none of these “altcoins”, as they were called, could ever be plausibly presented for public use.
Boy, were we ever wrong on that one.
...
If you are, or are planning to, develop and release an “altcoin” to the public, this document reminds you that you are playing with fire. This sort of behavior was cute on sci.crypt, a community populated mainly by cryptographic experts where there was no risk that your charlatanism would be mistaken for anything legitimate, and where there was no ability to store value in your scheme anyway.
...
The Bitcoin community differs in both those respects. Your crankery is not cute. You are not a cryptographer, and yet are releasing a homebrew cryptosystem, misrepresenting your own qualifications, and encouraging others to store value in your creation. These actions are incompetent, dishonest and reprehensibly dangerous.
Boy, were we ever wrong on that one.
...
If you are, or are planning to, develop and release an “altcoin” to the public, this document reminds you that you are playing with fire. This sort of behavior was cute on sci.crypt, a community populated mainly by cryptographic experts where there was no risk that your charlatanism would be mistaken for anything legitimate, and where there was no ability to store value in your scheme anyway.
...
The Bitcoin community differs in both those respects. Your crankery is not cute. You are not a cryptographer, and yet are releasing a homebrew cryptosystem, misrepresenting your own qualifications, and encouraging others to store value in your creation. These actions are incompetent, dishonest and reprehensibly dangerous.
lol.
That's Andrew Poelstra's "A Treatise on Altcoins". He's even harsher than many of us in this thread! He's also listed as an author on the sidechains whitepaper.
Maybe SideChain feature can be used for better security. Everybody can create their own sidechain (multisignature cold wallet).
a) it is hard to spend from this wallet (a lot of signatures and hashes are needed -> quantum computer resistant)
b) it can be exchanged with others sidechains in case +51% attack and bitcoin network cannot transact
Just my ideas, I do not know if it is possible.
a) it is hard to spend from this wallet (a lot of signatures and hashes are needed -> quantum computer resistant)
b) it can be exchanged with others sidechains in case +51% attack and bitcoin network cannot transact
Just my ideas, I do not know if it is possible.
They have banded together [nominally under the Bitstream banner] because they believe this proposal adds considerable value to Bitcoin's infrastructure. Nothing more.
...
The makeup of this group makes them vastly more credible than Mikin 'red-list' Hearndresen and the Bitcoin Foundation circle-jerkers. I would absolutely consider their work on Bitcoin to be the mainline branch and TBF-associated 'enhancements' to be a side-branch if/when push came to shove. And very possibly a hostile side-branch. Hopefully the big miners are clued in and still independent enough to see things the same way.
If Peter Todd came up with a workable generic shared ledger, especially one which employed treechain methods, I'd consider it a (very interesting) alt-ish type thing.
Blockstream:
sipa
bluematt
gmaxwell
BitPay:
jgarzik
TBF:
gavinandresen
Viacoin:
Peter Todd
Independent:?
wumpus (current lead dev)
... plus large number of 'vested-interest' coders making commits, comments and ready to pounce on BS.
I don't see any issues at present.
miners could abandon my SC that offers perfect anonymity. and that would be for another SC that takes my SC with perfect anonymity and adds even better functionality on top of that. then i'd have to move my SC coins yet again! what a hassle and potential security risk.
if the SC tech is in fact better, BTC hodlers would have to defect. as they defect, miners would have to follow. no?
money always seeks the place that treats it best.
if the SC tech is in fact better, BTC hodlers would have to defect. as they defect, miners would have to follow. no?
money always seeks the place that treats it best.
If this is done (SC tech is in fact better) and no one is using Bitcoin, I can imagine there will be transaction (in new SC), how to withdraw coin from abandoned BTC chain. => New SC will accept, old bitcoin transaction even Bitcoin is dead ... because this is the only way how to create coins.
They have banded together [nominally under the Bitstream banner] because they believe this proposal adds considerable value to Bitcoin's infrastructure. Nothing more.
...
The makeup of this group makes them vastly more credible than Mikin 'red-list' Hearndresen and the Bitcoin Foundation circle-jerkers. I would absolutely consider their work on Bitcoin to be the mainline branch and TBF-associated 'enhancements' to be a side-branch if/when push came to shove. And very possibly a hostile side-branch. Hopefully the big miners are clued in and still independent enough to see things the same way.
If Peter Todd came up with a workable generic shared ledger, especially one which employed treechain methods, I'd consider it a (very interesting) alt-ish type thing.
i think we've identified numerous potential problems in different scenarios in the last several pages that need answering. i'm not going to repeat them yet again.
all of your potential problems depend on the creation of a sidecoin when this is not the main use case of altCHAINS
no it does not. I've been talking about SC ' s alone with 1:1 scBTC
The main use case is not known yet. Creating sidecoins may not be (probably isn't) the intended use case but that's not the same thing at all. Unintended consequences happen all the time.
It is not, you are right. But it is pretty clear what the intended purposes are, at least in Blockstream's team mind, and that is not sideCOINS.
Quote
By using a sidechain which carries bitcoins rather than a completely new currency, one can avoid the thorny problems of initial distribution and market vulnerability, as well as barriers to adoption for new users, who no longer need to locate a trustworthy marketplace or invest in mining hardware to obtain altcoin assets.
Sure the do put forward interesting use case of Issued Assets (native currencies) on top of a sidechain but I think it is made evident that there is not much interest creating such a currency to simply compete with Bitcoin.
Considering all the facts it seems to me sidecoins are not inherently more dangerous to Bitcoin than altcoins.
In fact, I find it more honest to consider how sidecoins could help Bitcoin's development
Quote
If, in the medium term, there were wide agreement that the new system was an improvement, it may end up seeing significantly more use than Bitcoin. As there are no changes to parent chain consensus rules, everyone can switch in their own time without any of the risks associated with consensus failure. Then, in the longer term, the success of the changes in the sidechain would provide the needed confidence to change the parent chain, if and when it is deemed necessary to do so.
i think we've identified numerous potential problems in different scenarios in the last several pages that need answering. i'm not going to repeat them yet again.
all of your potential problems depend on the creation of a sidecoin when this is not the main use case of altCHAINS
The main use case is not known yet. Creating sidecoins may not be (probably isn't) the intended use case but that's not the same thing at all. Unintended consequences happen all the time.
i think we've identified numerous potential problems in different scenarios in the last several pages that need answering. i'm not going to repeat them yet again.
all of your potential problems depend on the creation of a sidecoin when this is not the main use case of altCHAINS
I don't understand how the peg will work.
Let's say 10 000 BTC are locked and give access to some sidecoin, if that Sidecoin is more succesful than BTC then the Sidecoin could be sell for more than the peg on the open market. If the sidecoin fail than the sidecoin holder can exit the sidechain and retreive their old BTC.
So basically a sidecoin is an option and there is a massive incentive to leave the BTC blockchain to the sidechain and enjoy you free option, so basically this will destroy Bitcoin. What I don't understand?
Let's say 10 000 BTC are locked and give access to some sidecoin, if that Sidecoin is more succesful than BTC then the Sidecoin could be sell for more than the peg on the open market. If the sidecoin fail than the sidecoin holder can exit the sidechain and retreive their old BTC.
So basically a sidecoin is an option and there is a massive incentive to leave the BTC blockchain to the sidechain and enjoy you free option, so basically this will destroy Bitcoin. What I don't understand?
It is an option in both directions.
I don't understand how the peg will work.
Let's say 10 000 BTC are locked and give access to some sidecoin, if that Sidecoin is more succesful than BTC then the Sidecoin could be sell for more than the peg on the open market. If the sidecoin fail than the sidecoin holder can exit the sidechain and retreive their old BTC.
So basically a sidecoin is an option and there is a massive incentive to leave the BTC blockchain to the sidechain and enjoy you free option, so basically this will destroy Bitcoin. What I don't understand?
Let's say 10 000 BTC are locked and give access to some sidecoin, if that Sidecoin is more succesful than BTC then the Sidecoin could be sell for more than the peg on the open market. If the sidecoin fail than the sidecoin holder can exit the sidechain and retreive their old BTC.
So basically a sidecoin is an option and there is a massive incentive to leave the BTC blockchain to the sidechain and enjoy you free option, so basically this will destroy Bitcoin. What I don't understand?
Careful about your speculation, it is possible for the feature of an altchain to become immensely successful but it is a completely different thing to suggest a sidecoin from an altchain would become more succesful than BTC. As I've mentionned above this is akin to saying an altcoin would become more successful than BTC. A possibility, but generally considered HIGHLY improbable.
Also, you are confusing two possibilities.
An altcoin could be created through a side chain using a non-deterministic exchange rate. If BTCs are pledged to that sidechain's altcoin then they are exposed to its exchange rate and volatility. In this scenario if the sidecoin fails than the holder CANNOT retrieve the same amount of BTC he put in, only the amount the exchange rate provides him in exchange for his failed coin.
The alternative is for an altchain to provide a certain feature that could be accessed using your BTCs. You would lock your BTCs to this altchain and use it as you wish. Since the altchain uses BTC as a currency and not a native sideCOIN then there is effectively no floating exchange rate and if the sidechain is somehow compromised you would generally be able to unlock your BTC from the chain and go back to BTC main.
This is a soft fork change, which means any single miner can choose to adopt it and remain compatible with the existing infrastructure. Other miners won't add the new transactions since they are "nonstandard", but they will validate blocks containing them.
Can someone explain how this works. I didn't follow it in the paper and I don't have time to read it more carefully right now.
If a new opcode is added for coin return how will existing nodes validate that transactions unlocking coins using an opcode they don't understand are valid?
Edit: I guess mining would be more or less pegged too. Miners could mine bitcoin, convert so SC and sell, at least as long as there was a mining reward.
Correct. If the side chain gained value relative to the main chain (leading to main chain near-abandonment) then miners would mine solely for the purpose of converting their main chain rewards to the side chain.
However, this could exacerbate or accelerate the failure of the main chain when rewards are phased out/down, because there would indeed be no reason to mine on an abandoned or near-abandoned chain except for rewards.
I wouldn't necessarily describe this as bad unless it is pushed by someone with a malicious agenda. If it happens organically it is just an upgrade. The (market preferred) side chain would become the new main chain.
I really doubt anything will come along that is considered "better" for everyone. Anonymity, for example, is well below scarcity, security, and historical record on my list of priorities. But the thing with SC as opposed to altcoins is that bitcoin the currency stays the same. It is only bitcoin the blockchain that is in danger of being replaced. And even if it is replaced, bitcoin the blockchain will still be mined heavily at least until the subsidy dries up because new coins can be moved to whatever chain is successful.
SC also provides a way forward scalablilty wise that doesn't require a VERY controversial hard fork.
In the end, any opposition is irrelevant. This is a soft fork change, which means any single miner can choose to adopt it and remain compatible with the existing infrastructure. Other miners won't add the new transactions since they are "nonstandard", but they will validate blocks containing them. If use increases to the point that they are missing out on fees, you bet your ass they will jump on board.
SC also provides a way forward scalablilty wise that doesn't require a VERY controversial hard fork.
In the end, any opposition is irrelevant. This is a soft fork change, which means any single miner can choose to adopt it and remain compatible with the existing infrastructure. Other miners won't add the new transactions since they are "nonstandard", but they will validate blocks containing them. If use increases to the point that they are missing out on fees, you bet your ass they will jump on board.
+1
I could go for that.
Smooth is right. SC'S are just sophisticated forms of altcoins.
Smooth is right. SC'S are just sophisticated forms of altcoins.
Nop, only you focus on that.
sideCHAINS are altCHAINS that allow for bilateral movement of assets (bitcoins) between them.
sideCOINS are effectively altCOINS supported by the Bitcoin network.
I suggest you read the paper again
Quote
It appears that we desire a world in which interoperable altchains can be easily created and used, but without unnecessarily fragmenting markets and development. In this paper, we argue that it is possible to simultaneously achieve these seemingly contradictory goals. 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 currency2
brg444, I'm past the part about core dev altcoin implementations. I do see how it would be a hard sell for them although not impossible to sell to noobs. You forget that we are witnessing the power of what they can do RIGHT NOW with this SC proposal. They've banded together precisely to push this proposal through as a for profit company which requires a fork for them to be successful. It's not a wild thought imagining them trying to implement a new currency some day. LukeJr has talked about demurrage coin on reddit. Why? I could see a day where he starts one on his own and claims its just him personally, not Blockstream. Unlikely but possible.
They have banded together because they believe this proposal adds considerable value to Bitcoin's infrastructure. Nothing more.
It is not a wild thought to imagine them try to implement a new coin. In fact they are free to do so. But as in all things alt coin, the free market will decide whether their proposition is worth switching over from Bitcoin. In the event this happens, their position as core developer would be of little help, if any at all. The whole idea of Bitcoin is that we do not care who created it, only that it works as advertised.
The agenda you are trying to push is they would somehow leverage their position in the community as a way to influence the market to switch over to their coin. Sure, the community would carefully consider the proposition considering their status. The code would be reviewed, analysed and criticized the same way Satoshi's was. And if it turns out there is any unethical concern comes up or it is made obvious this coin would provide unfair advantage to some entrenched interest then the idea would be dismissed and everyone would move on.
This is not so black and white. I suppose there could be a real threat of a side chain taking over if there is little to no perceived risk by the market to move from chain to chain, but if the market perceives little to no risk then maybe there is little to no risk. Savers will likely park their money in the safest chain, i.e. the chain with the highest hashrate and bitcoin could cease to be the dominant chain at some point. I don't see why it couldn't happen.
I agree this could happen but not the way you suggest.
For a side chain to "take over" it requires the whole network, nodes & miners, to come to a concensus that the side chain should become the main chain.
As you have mentionned, it that were to happen, it would be because the market perceives little to no risk. Risk #1 being the conservation of value of their stake. In reality, ONLY a 1:1 peg that preserves Bitcoin's scarcity & overall economic model can provide this security.
I have demonstrated in my previous post and some have come to an agreement that sidechains issuing a new native currency (no 1:1 peg) are effectively an altcoin piggybacking off Bitcoin's security. For that reason, the likelyhood that such a sidechain takes over is the same as any regular altcoin taking over.
Having said that, if a sidechain's feature becomes so obviously superior that the whole market wants it then it is much more likely this feature is implemented into the Bitcoin main chain, either as a soft fork OR a hardfork. This makes much more sense for every market participant than having them all switch to the sidechain. In that scenario, hard fork are still a very tricky proposition but with the help of experimentation and beta implementation within a sidechain, the risk is considerably mitigated and consensus much easier to obtain.
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