Gold collapsing. Bitcoin UP. - page 840.

Odalv

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Quote from: cypherdoc on October 23, 2014, 06:42:13 PM

you still haven't answered how a SC can't hurt Bitcoin if the economic value of a scBTC starts exceeeding a BTC in USD terms b/c of a significant innovation.

Hmm, what about an alt-coin
-> if the economic value of ALT starts exceeeding a BTC in USD terms b/c of a significant innovation.

cypherdoc

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Quote from: smooth on October 23, 2014, 06:59:37 PM

Quote from: cypherdoc on October 23, 2014, 06:35:51 PM

Quote from: smooth on October 23, 2014, 06:29:59 PM

Quote from: cypherdoc on October 23, 2014, 06:28:22 PM

Quote

-> I'll only send bitcoin to sidechain if I can get some advantage e.g. fast transfer to buy coffe ( HOT wallet )

how are you gonna do this with a 1-2 day confirmation/contest period

You would do it in advance of course. Keeping a small amount of spending money on the fast chain for these sorts of purchases.

ok, fair enough. what if you need to move large #'s BTC from cold storage into scBTC quickly if it becomes clear the SC is going to dominate b/c of some innovative feature and the exchange price is fluctuating wildly in the meantime?

You have a call option at a 1:1 price, so you really don't need to move quickly, as far as I can tell, at least not for economic reasons. If you expect the BTC blockchain to be abandoned or fail, you might be in a hurry. I think moving from BTC to SC is fast though right, just not the other way?

not my understanding. there's a 1-2 day confirmation/contest period which i think would be bilateral.

brg444

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Bitcoin replaces central, not commercial, banks

Quote from: cypherdoc on October 23, 2014, 06:53:32 PM

ah, that does make sense actually. but what happens if, as it becomes clear that a SC is going to win over Bitcoin, miners begin to jack their mining tx fees just b/c they can to create the SPV proof tx required to make the switch to scBTC?

also, there still is the question of Blockstream creating an additional asset on the winning SC ahead of time that stands to profit from a rush of BTC to scBTC.

I understand you are trying to poke holes into the concept and it is legitimate to consider these ideas BUT to me, suggesting that a SC is going to win over Bitcoin is essentially the same as entertaining the possibility that an altcoin would take over. The chances are slim to none, for the innovation required by this SC/alt would be so considerable that if we do reach this point, then to me it simply makes sense that Bitcoin core and their developers will recognize the innovation and adapt Bitcoin accordingly.

I don't see the advent of sidechains bringing forward fundamental, competing, money-function blockchain. I think it is Risto or Aminorex that said there are only two liquidity market currencies can compete for : legitimate and dark market. Once one or two have established their dominance over these, any additional feature is superficial and will not attract anything more than situational/speculative use.

I see sidechains as application specific uses of units derived from the Bitcoin ledger. IMO, any attempt at creating a sidechain that will compete with Bitcoin's money function will fail the same way alt coins have failed.

Odalv

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Quote from: cypherdoc on October 23, 2014, 06:42:13 PM

Quote from: Odalv on October 23, 2014, 06:37:29 PM

SideChain is not same as AltCoins
-> SideChain does not require POW nor "blockchain" to work .. (but SC can use them, it is problem of SC-participants)

this is not true. everyone has been talking about how to secure a SC blockchain with the most common solution and criticism being merge mining.

Believe me, It is SC-participant's problem "how to secure SC". They can use blockchain, POW, POS, central entity, 10 oracles, signatures of all participants ... possibilities are endless. -> Bitcoin users not affected (there can be 1,000,000,000 sidechains -> not affecting Bitcoin)

Quote

1) SC will only set-up some address/addresses in Bitcoin-world (lock bitcoins to prevent double-spent) -> and create SideChain-world

SC world need security or else attackers will steal the scBTC
[/quote]

SC-world can work under the radar, no one know if SC exists. It depends what they use (blockchain, POW, POS, DPOS, central entity, 10 oracles, ..). They can know each others ... they can use tor to exchange transactions

Quote

2) In SC-world you can do SC-transactions (even by e-mail) -> build some hash-tree (you do not have to broadcast transactions to ALL WORLD and verify that ALL SEE THEM, b/c only participants matters)
3) SC-world has rules (Bitcoin users not affected) how to withdrawn/unlock bitcoins from scBTC (they must be able to create valid bitcoin transaction to unlock bitcoins).

you still haven't answered how a SC can't hurt Bitcoin if the economic value of a scBTC starts exceeeding a BTC in USD terms b/c of a significant innovation.
[/quote]

smooth

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Quote from: cypherdoc on October 23, 2014, 06:35:51 PM

Quote from: smooth on October 23, 2014, 06:29:59 PM

Quote from: cypherdoc on October 23, 2014, 06:28:22 PM

Quote

-> I'll only send bitcoin to sidechain if I can get some advantage e.g. fast transfer to buy coffe ( HOT wallet )

how are you gonna do this with a 1-2 day confirmation/contest period

You would do it in advance of course. Keeping a small amount of spending money on the fast chain for these sorts of purchases.

ok, fair enough. what if you need to move large #'s BTC from cold storage into scBTC quickly if it becomes clear the SC is going to dominate b/c of some innovative feature and the exchange price is fluctuating wildly in the meantime?

You have a call option at a 1:1 price, so you really don't need to move quickly, as far as I can tell, at least not for economic reasons. If you expect the BTC blockchain to be abandoned or fail, you might be in a hurry. I think moving from BTC to SC is fast though right, just not the other way?

smooth

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Quote from: Odalv on October 23, 2014, 06:37:29 PM

-> SideChain does not require POW nor "blockchain" to work .. (but SC can use them, it is problem of SC-participants)

Same as altcoins

Quote

1) SC will only set-up some address/addresses in Bitcoin-world (lock bitcoins to prevent double-spent) -> and create SideChain-world

Same as altcoins (using an IPO/ICO/proof-of-burn)

Quote

2) In SC-world you can do SC-transactions (even by e-mail) -> build some hash-tree (you do not have to broadcast transactions to ALL WORLD and verify that ALL SEE THEM, b/c only participants matters)

Same as altcoins

Quote

3) SC-world has rules (Bitcoin users not affected) how to withdrawn/unlock bitcoins from scBTC (they must be able to create valid bitcoin transaction to unlock bitcoins).

This is slightly different from altcoins in that you can only exchange back to BTC if there is a willing buyer no an exchange, and the side chain concept provides something like an automated market maker that allows you to do so at some price and under some conditions (both of which can vary depending on the side-chain).

I see only subtle differences. Call it altcoins 2.0 if you like.

cypherdoc

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Quote from: brg444 on October 23, 2014, 06:39:31 PM

Quote from: cypherdoc on October 23, 2014, 06:05:21 PM

Quote from: Odalv on October 23, 2014, 05:46:18 PM

Quote from: cypherdoc on October 23, 2014, 05:28:24 PM

i'm missing something here.

why can't the scBTC develop an independent value in USD on their own on an exchange? and if that value starts going up relative to the BTC value b/c the SC turns out to be better functionally, then why wouldn't every BTC owner be forced to transfer their BTC over to scBTC along with a migration of direct mining hashpower to the SC? if the SC is better, the difference in value btwn BTC and scBTC can't be arbitraged away.

the end result being a destroyed Bitcoin and a "new" Sidechain dominance.

Because there is a MATH no 3D party -> how to convert(lock) BTC to scBTC

Rule #1
You can anytime convert BTC to scBTC using this conversion function (if btc protocol is not broken)

repeat(
1. Convert BTC -> scBTC
2. You sell scBTC for $
3. buy more BTC at Bitstamp
)

=> scBTC has only value of BTC (SideChain has value based on BTC)

this is where i still don't understand. remember, i'm trying to think of a scenario where SC's can hurt Bitcoin.

presumably, both BTC and scBTC will be traded 24/7 on an exchange for USD. if a scBTC begins to exceed the value of a BTC in USD terms b/c the market perceives the SC to have a superior feature of whatever, then BTC will start to migrate to the SC as scBTC. why? b/c they're worth MORE in USD terms. at some point, you could even imagine where there could be a rush to make this conversion if the tech is that much better. mining power would also migrate to the SC. this cannot be arbed away b/c in this scenario, the SC is superior making the scBTC more valuable, no matter that a 1:1 peg exists. this could get quite disorderly and ecoomically disadvantageous for BTC holders with this confirmation and contest period of 1-2 days. what am i missing?

My understanding, and I might be wrong :

- I'm not sure about the concept of scBTC trading on exchanges for reasons that buying a 4$ share of BTC and transferring to SC will give you 4$ share of scBTC. Value of BTC and sBTC are correlated, no matter the 1:x peg.

- My assumption is the share of scBTC pie you can claim is representative to the share of BTC you own. In that sense, if a SC is so superior that there are clear incentives for people to transfer their BTC to this chain, it does not matter when they do it for their stake in BTC, even while on BTC's blockchain, is simply a stake of scBTC they have not claimed YET.

- If this assumption is true then automatically the value of a Bitcoin will rise will the value of its "to-be-claimed" stake in sBTC and be redeemable for the same USD exchange rate

edit : Maybe this makes no sense but this is how I understand it.

ah, that does make sense actually. but what happens if, as it becomes clear that a SC is going to win over Bitcoin, miners begin to jack their mining tx fees just b/c they can to create the SPV proof tx required to make the switch to scBTC?

also, there still is the question of Blockstream creating an additional asset on the winning SC ahead of time that stands to profit from a rush of BTC to scBTC.

Erdogan

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Quote from: Odalv on October 23, 2014, 05:46:18 PM

Quote from: cypherdoc on October 23, 2014, 05:28:24 PM

i'm missing something here.

why can't the scBTC develop an independent value in USD on their own on an exchange? and if that value starts going up relative to the BTC value b/c the SC turns out to be better functionally, then why wouldn't every BTC owner be forced to transfer their BTC over to scBTC along with a migration of direct mining hashpower to the SC? if the SC is better, the difference in value btwn BTC and scBTC can't be arbitraged away.

the end result being a destroyed Bitcoin and a "new" Sidechain dominance.

Because there is a MATH no 3D party -> how to convert(lock) BTC to scBTC

Rule #1
You can anytime convert BTC to scBTC using this conversion function (if btc protocol is not broken)

repeat(
1. Convert BTC -> scBTC
2. You sell scBTC for $
3. buy more BTC at Bitstamp
)

=> scBTC has only value of BTC (SideChain has value based on BTC)

Rule #2
There is conversion function (MATH) how to convert scBTC to BTC (unlock your/anybody previously locked coins ... if SideChain is not broken => you cannot unlock more, than was locked)

Jumping in. Let's say a scheme like this could be created. As I have argued elsewhere, the value of the money is dependent on the preference to hold. Now even if there is an equal number of locked bitcoins and number of scBTC in existence, the values would differ. Why? This is because the traits of a bitcoin and the traits of a scBTC is different. This is the whole point of the sidechain coins, they are better for some purpose, for example micropayments, and they would also differ in the assumed long time viability, for example. So the question for a holder of some value would repeatedly be, should I hold in bitcoin or should I hold in scBTC, and the choice will affect the value of each.

Should the value of scBTC prove to be higher on the market, according to those preferences, all value would then eventually move to the sidechain coins, and bitcoin would die.

cypherdoc

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Quote from: Odalv on October 23, 2014, 06:37:29 PM

SideChain is not same as AltCoins
-> SideChain does not require POW nor "blockchain" to work .. (but SC can use them, it is problem of SC-participants)

this is not true. everyone has been talking about how to secure a SC blockchain with the most common solution and criticism being merge mining.

Quote

1) SC will only set-up some address/addresses in Bitcoin-world (lock bitcoins to prevent double-spent) -> and create SideChain-world

SC world need security or else attackers will steal the scBTC

Quote

2) In SC-world you can do SC-transactions (even by e-mail) -> build some hash-tree (you do not have to broadcast transactions to ALL WORLD and verify that ALL SEE THEM, b/c only participants matters)
3) SC-world has rules (Bitcoin users not affected) how to withdrawn/unlock bitcoins from scBTC (they must be able to create valid bitcoin transaction to unlock bitcoins).

you still haven't answered how a SC can't hurt Bitcoin if the economic value of a scBTC starts exceeeding a BTC in USD terms b/c of a significant innovation.

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: cypherdoc on October 23, 2014, 06:05:21 PM

Quote from: Odalv on October 23, 2014, 05:46:18 PM

Quote from: cypherdoc on October 23, 2014, 05:28:24 PM

i'm missing something here.

why can't the scBTC develop an independent value in USD on their own on an exchange? and if that value starts going up relative to the BTC value b/c the SC turns out to be better functionally, then why wouldn't every BTC owner be forced to transfer their BTC over to scBTC along with a migration of direct mining hashpower to the SC? if the SC is better, the difference in value btwn BTC and scBTC can't be arbitraged away.

the end result being a destroyed Bitcoin and a "new" Sidechain dominance.

Because there is a MATH no 3D party -> how to convert(lock) BTC to scBTC

Rule #1
You can anytime convert BTC to scBTC using this conversion function (if btc protocol is not broken)

repeat(
1. Convert BTC -> scBTC
2. You sell scBTC for $
3. buy more BTC at Bitstamp
)

=> scBTC has only value of BTC (SideChain has value based on BTC)

this is where i still don't understand. remember, i'm trying to think of a scenario where SC's can hurt Bitcoin.

presumably, both BTC and scBTC will be traded 24/7 on an exchange for USD. if a scBTC begins to exceed the value of a BTC in USD terms b/c the market perceives the SC to have a superior feature of whatever, then BTC will start to migrate to the SC as scBTC. why? b/c they're worth MORE in USD terms. at some point, you could even imagine where there could be a rush to make this conversion if the tech is that much better. mining power would also migrate to the SC. this cannot be arbed away b/c in this scenario, the SC is superior making the scBTC more valuable, no matter that a 1:1 peg exists. this could get quite disorderly and ecoomically disadvantageous for BTC holders with this confirmation and contest period of 1-2 days. what am i missing?

My understanding, and I might be wrong :

- I'm not sure about the concept of scBTC trading on exchanges for reasons that buying a 4$ share of BTC and transferring to SC will give you 4$ share of scBTC. Value of BTC and sBTC are correlated, no matter the 1:x peg.

- My assumption is the share of scBTC pie you can claim is representative to the share of BTC you own. In that sense, if a SC is so superior that there are clear incentives for people to transfer their BTC to this chain, it does not matter when they do it for their stake in BTC, even while on BTC's blockchain, is simply a stake of scBTC they have not claimed YET.

- If this assumption is true then automatically the value of a Bitcoin will rise will the value of its "to-be-claimed" stake in sBTC and be redeemable for the same USD exchange rate

edit : Maybe this makes no sense but this is how I understand it.

Odalv

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Activity: 1414

Merit: 1000

Quote from: cypherdoc on October 23, 2014, 06:05:21 PM

Quote from: Odalv on October 23, 2014, 05:46:18 PM

Quote from: cypherdoc on October 23, 2014, 05:28:24 PM

i'm missing something here.

why can't the scBTC develop an independent value in USD on their own on an exchange? and if that value starts going up relative to the BTC value b/c the SC turns out to be better functionally, then why wouldn't every BTC owner be forced to transfer their BTC over to scBTC along with a migration of direct mining hashpower to the SC? if the SC is better, the difference in value btwn BTC and scBTC can't be arbitraged away.

the end result being a destroyed Bitcoin and a "new" Sidechain dominance.

Because there is a MATH no 3D party -> how to convert(lock) BTC to scBTC

Rule #1
You can anytime convert BTC to scBTC using this conversion function (if btc protocol is not broken)

repeat(
1. Convert BTC -> scBTC
2. You sell scBTC for $
3. buy more BTC at Bitstamp
)

=> scBTC has only value of BTC (SideChain has value based on BTC)

this is where i still don't understand. remember, i'm trying to think of a scenario where SC's can hurt Bitcoin.

presumably, both BTC and scBTC will be traded 24/7 on an exchange for USD. if a scBTC begins to exceed the value of a BTC in USD terms b/c the market perceives the SC to have a superior feature of whatever, then BTC will start to migrate to the SC as scBTC. why? b/c they're worth MORE in USD terms. at some point, you could even imagine where there could be a rush to make this conversion if the tech is that much better. mining power would also migrate to the SC. this cannot be arbed away b/c in this scenario, the SC is superior making the scBTC more valuable, no matter that a 1:1 peg exists. this could get quite disorderly and ecoomically disadvantageous for BTC holders with this confirmation and contest period of 1-2 days. what am i missing?

SideChain is not same as AltCoins
-> SideChain does not require POW nor "blockchain" to work .. (but SC can use them, it is problem of SC-participants)
1) SC will only set-up some address/addresses in Bitcoin-world (lock bitcoins to prevent double-spent) -> and create SideChain-world
2) In SC-world you can do SC-transactions (even by e-mail) -> build some hash-tree (you do not have to broadcast transactions to ALL WORLD and verify that ALL SEE THEM, b/c only participants matters)
3) SC-world has rules (Bitcoin users not affected) how to withdrawn/unlock bitcoins from scBTC (they must be able to create valid bitcoin transaction to unlock bitcoins).

cypherdoc

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Merit: 1002

Quote from: smooth on October 23, 2014, 06:29:59 PM

Quote from: cypherdoc on October 23, 2014, 06:28:22 PM

Quote

-> I'll only send bitcoin to sidechain if I can get some advantage e.g. fast transfer to buy coffe ( HOT wallet )

how are you gonna do this with a 1-2 day confirmation/contest period

You would do it in advance of course. Keeping a small amount of spending money on the fast chain for these sorts of purchases.

ok, fair enough. what if you need to move large #'s BTC from cold storage into scBTC quickly if it becomes clear the SC is going to dominate b/c of some innovative feature and the exchange price is fluctuating wildly in the meantime?

smooth

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Quote from: cypherdoc on October 23, 2014, 06:28:22 PM

Quote

-> I'll only send bitcoin to sidechain if I can get some advantage e.g. fast transfer to buy coffe ( HOT wallet )

how are you gonna do this with a 1-2 day confirmation/contest period

You would do it in advance of course. Keeping a small amount of spending money on the fast chain for these sorts of purchases.

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: Odalv on October 23, 2014, 06:04:01 PM

Quote from: smooth on October 23, 2014, 05:50:43 PM

Quote from: Odalv on October 23, 2014, 05:46:18 PM

Quote from: cypherdoc on October 23, 2014, 05:28:24 PM

i'm missing something here.

why can't the scBTC develop an independent value in USD on their own on an exchange? and if that value starts going up relative to the BTC value b/c the SC turns out to be better functionally, then why wouldn't every BTC owner be forced to transfer their BTC over to scBTC along with a migration of direct mining hashpower to the SC? if the SC is better, the difference in value btwn BTC and scBTC can't be arbitraged away.

the end result being a destroyed Bitcoin and a "new" Sidechain dominance.

Because there is a MATH no 3D party -> how to convert(lock) BTC to scBTC

Rule #1
You can anytime convert BTC to scBTC using this conversion function (if btc protocol is not broken)

repeat(
1. Convert BTC -> scBTC
2. You sell scBTC for $
3. buy more BTC at Bitstamp
)

=> scBTC has only value of BTC (SideChain has value based on BTC)

Rule #2
There is conversion function (MATH) how to convert scBTC to BTC (unlock your/anybody previously locked coins ... if SideChain is not broken => you cannot unlock more, than was locked)

Those rules provide a 1:1 peg. It remains to be seen whether such a peg will be economically viable. It appears (somewhat) to be technically viable to implement.

Those particular rules however, are not required by the side chain concept, as the side chain developers have stated on Reddit and elsehwere. Different rules are possible, which gives rise to all manner of altchains/altcoins.

I think the side chain developers are wasting their time pathologically obsessing over scamcoins, both because scamcoin market value is tiny and because "killing altcoins" or "protecting scarcity" isn't the real value of side chains anyway. The value of side chains is as a safer and faster mechanism for extending and improving (though also damaging I suppose) Bitcoin, if they work.

A lot of functions are possible but only few are viable
-> I will not send bitcoin to sidechain if I'm not able to withdraw same amount.

SC's will always be less secure. you may not get them back if 51% attacked.

Quote

-> I'll only send bitcoin to sidechain if I can get some advantage e.g. fast transfer to buy coffe ( HOT wallet )

how are you gonna do this with a 1-2 day confirmation/contest period

Quote

-> I can keep some coin in ExchangeSideChian to have advantage buy cheap coins -> then I'll store them to COLD BITCOIN wallet.

then you're speculating. introduces risk.

smooth

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Quote from: Odalv on October 23, 2014, 06:04:01 PM

-> I will not send bitcoin to sidechain if I'm not able to withdraw same amount.

Ah, but that is only true if you aren't speculating on getting more. If you can get more, then you will rationally risk getting less.

An example of a lottocoin was given on Reddit by one of the developers. Everyone can move to the side chain, but only one person (chosen randomly) gets to move all of the bitcoins back. Everyone else gets nothing.

How is it possibly not clear this creates even more opportunities for speculative markets?

cypherdoc

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why don't you try giving me an answer to my post just above yours before i answer you?

brg444

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Bitcoin replaces central, not commercial, banks

Quote from: cypherdoc on October 23, 2014, 05:07:50 PM

there is the potential to implement things that will benefit the company. why can't you see this? we should avoid if at all possible compromising situations. 5 devs under one roof is not the answer, imo. if they were split up individually, then fine.

there is potential they might try to. but anything that would be considered harmful to the main blockchain would be met with considerable opposition from other core devs, miners & nodes. the fact that they are 5 core devs does not give them vto over code implementation. if the community finds them to behave in an unethical way they will lose their place. simple as that.

Quote from: cypherdoc on October 23, 2014, 05:07:50 PM

how can you assure that they won't? simply b/c they haven't? that's naive.

Quote from: cypherdoc on October 23, 2014, 05:07:50 PM

the fact that Hill and Back did miss early adoption of Bitcoin needs to be considered. they probably don't have much in the way of BTC. this could change all that for them so i don't blame them for taking this shot if they can get ppl like you to buy in.

Quote

People like me ? Roll Eyes

Are you suggesting they wish to implement sidechains so that they can scam people out of their BTC? Because that's surely what this sounds like. I'm quite sure even though they are not early adopters, they probably have enough BTC so that if it succeeds the way you & me hope they will be comfortable enough.

Topic: Gold collapsing. Bitcoin UP. - page 840. (Read 2032266 times)