Topic: Gold collapsing. Bitcoin UP. - page 835. (Read 2032266 times)

Bitcoins still exist, they can be unlocked by destroying (or locking) your SC coins, effectively swapping keys with the bitcoins. Their location can still be seen on the blockchain. Really it would drive Bitcoin price up, not down because it is the only secure exchange between SC coins.

Explain to me how you price something that doesn't exist.  If ALL BTC are converted to SCbtc, then that means no more BTC exists.  If no more BTC exist then there are no more sellers.  Buyers can't buy when there are no sellers and the price is effectively 0.

Yeah. The secondary currency would likely threaten the security of the entrenched bitcoins by having an effect on hashrate through price manipulation. I suppose if the altcoin was used only for microtransactions it might make sense since the mining is subsidized by merge miners.

Not quite, I too am having problem wraping my head about how exactly this would work but I believe this to be the relevant part in the whitepaper :


Note that the referred "block subsidy" exists only if the altchain issues its own native currency (not a 1:1 peg)

Right. Then there is no mining in the SC? How are SC blockchains built?

From the Bitcoin blockchain.

So if I understand this correctly, think of the altchains as a multi-sig wallet.

If you wish to use some features of a sidechain (anonymity) you would essentially lock them to the altchain. From there, they would move within the altchain blockchain until you unlock them back to BTC. Any unit in the altchain is essentially a bitcoin that has been locked into the altchain. There is no issuance of new coins, no distribution model.

Where are the block rewards bitcoin backing coming from if the chain is 1:1?

1:1 pegged sidechains using bitcoins has currency are not "only supported by fees".

Miners are essentially reward by the usual BTC issuance and additional transactions from sidechains

It will happen. There are plenty of good reason for a sidechain to use the anonymity feature of, say, Monero. What cypher fails to consider here is that a new currency is not necessary for this to exist. The altchain will leverage Bitcoin's currency and benefit from its network effect.


I'm not sure about your security incentive question. Merge mining allows for hashing power of BTC to be shared with the anonymous altchain in a trivial way.

So tell me cypherdoc, what is more likely to catch on?

A 1:1 pegged sidechain with anonymity features or an anonymous sidechain issuing its own currency distributed in some malicious, hypothetic way that would benefit the Blockstream developer?

IIRC pre-mines have never really been popular or successful.

I've been trying to wrap my head around the SC debate. I can only see a 1:1 peg working without it becoming an altcoin because fractional reserve. Transactions only supported by fees would preclude using them for micro-transactions. Competition for mining for the fees would reach equilibrium with Bitcoin mining. There's not much advantage to them except for minimal counterparty risk.

It sounds like a fairly safe way to create a decentralized exchange for designing Bitcoin's replacement.

Apparently you are a bit logic challenged. One example consistent with a premise does not "demonstrate" the premise to be true.

People sell manure all the time. It's a huge industry. That is the same as spending.

Who said so? The paper does suggest another altcoin can be spun off a sidechain. The difference is it also clearly states this is not where the ground for innovation lays. Altchain backed by BTC currency is what is important here. You chose to focus on the altcoin as if Blockstream's motivation is to create an altcoin using a sidechain which they have specifically explained why they have no interest and little purpose doing so.

I still have yet to see you come up with a good incentive for core dev to maliciously fork Bitcoin in a way that would advantage them.

No one is denying the existence of an apparent "conflict of interest". But like in all things Bitcoin you have to consider in an honest way what truly could go wrong.

How long will you ignore the concept of open source and distribution? What else do I need to say to explain to you that a SC fork is bound to fail?



What is embarassing is your continuing stubbordness in front of facts and arguments.

Did you read my post at all? Is there anything you would like to argue?

Do you not understand the idea that Sidechain are not an inherent threat to Bitcoin since Bitcoin is the parent chain?

You have repeatedly supported the idea in this thread that altcoins can barely make a dent into Bitcoin yet packaged in a sidechain you are somehow worried it could threaten it?

Do you recognize that scBTC have the SAME network effect challenge than any other altcoin?

Your statement is only true if we don't care about reality. Or truth.

Both of these theories have been empirically tested, and only one of them demonstrated to be true.

Gold is deflationary, manure rots like demurrage. Try spending manure.

That's essentially identical to the frequent argument that deflationary currencies can't work because no one will spend them (or, in his words, it rebukes sellers). Both are wrong.

I have to agree with Daniel on this one. He proved fairly rigorously why demurrage-based currencies must fail, and nobody has produced a refutation stronger than, "Maybe if I hope hard enough it will work!!!"

http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/

I love the idea, but I don't get how a dark 1:1 pegged SC can have a security incentive if you are only mining for fees.

One example does not prove this at all. It simply proved that no one wanted Freicoin. They might want something else with that property, but with some other differences.

No trade does not mean the price is zero, it simply means there is trade. For example, in a speculative market you would get no trading if everyone agrees on the same price.

Anyway, as I said mining would still happen, and you could potentially buy from miners, but only at better price than what they could get by converting to higher-valued scBTC. There is no arbitrage though, the mining rewards would simply be sought out for their conversion value and miners would compete harder for them, driving up difficulty.