Topic: Gold collapsing. Bitcoin UP. - page 841. (Read 2032266 times)

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.

Yes, the conversion ratio AFAIK has to be algorithmically defined.

Why "forced" to transfer?

Nobody is forced.  But if BTC owners could sell their BTC for $400 (say) and scBTC for $425, then arbitragers would naturally buy BTC, convert it to scBTC and sell it, making $25 (or the opposite).  So the price will never diverge significantly.  

We arent talking about 2.0 chains (like ethereum) we are talking about sidechains. They exist on the bitcoin blockchain.

Why "forced" to transfer?

Nobody is forced.  But if BTC owners could sell their BTC for $400 (say) and scBTC for $425, then arbitragers would naturally buy BTC, convert it to scBTC and sell it, making $25 (or the opposite).  So the price will never diverge significantly.  

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.

We can give ourselves 50% of the ether initially and let the next 50% come from locked coins. A pre side mine if you like. As soon as a decent number of coins are locked into our chain we can just cash out.

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

I agree scarcity drives price when demand exists. It is why I speculatively hold bitcoin right now. What will drive the demand for bitcoin if everyone moves to a bitcoin 2.0 chain?

I'm sure 99% SCs will use 1:1 conversion rate and no new SCBTC will be generated ... you will still have your bitcoins, but few will be locked in "fast transfer" sidechain  ... you will have some locked in "exchage" sidechain ... and some in your private business sidechains (not public sidechains)

I'm sure 99% SCs will use 1:1 conversion rate and no new SCBTC will be generated ... you will still have your bitcoins, but few will be locked in "fast transfer" sidechain  ... you will have some locked in "exchage" sidechain ... and some in your private business sidechains (not public sidechains)

What's ridiculous is that large holders expect these people to work for free -- AND that there are so few core developers.

how is it ridiculous if the for-profit company in question works to IMPROVE the Bitcoin technology and has EVERY incentive to do so in a legitimate community approved way?

comparison to 2008 is asinine. Bitcoin development is an open source process.

I repeat, these 5 devs have every incentive to work in a transparent and community focused manner. You are suggesting they will go rogue and commit damaging code to the Bitcoin main core and that the community, the miners, and everyone running a node will play along? This is tinfoil hat status AFAIC.

Attacking Austin Hill personally just because you dislike the guy isn't helping your cause either? I know some people who, contrary to you, have worked with Austin personally and can certainly vouch for him. It appears a great deal of industry people do so as well so right now, it seems to me you're alone in your corner, with Peter Todd maybe, trying to pin bad intentions to a person with nothing but words to back up your claims.

Markets and their capitalizations are a funny thing. They are illusory. We talk about bitcoin's current cap as being the price of a single coin multiplied by all the coins in existence. But the reality is far from that as the price is manipulated from, say, 1166 to 350 by a fraction of a few % of the coins in existence, or relatively modest amounts of fiat currency (millions to tens of millions of dollars only) on the way up.

This concept of a 'two way peg' between bitcoin blockchain and side chain is really an exchange. The terms of how many SCBTC can be acquired/released by locking/unlocking actual BTC are flexible and could float, for example based upon fiat exchange value of SCBTC or BTC. If SCBTC use becomes prevalent then it is possible that as the value of BTC falls, SCBTC rises, until BTC is not a store of value.

What you say (emboldened) is probably accurate. But what we care about is bitcoin maintaining value, as it's algorithmic scarcity was designed to do. That is the reason we hold it!

As scarcity increases, so does the price.... Mtgox was an exchange... that has nothing to do with a protocol and its security. You should rethink a bit of what you just said here.

Worst case, some highly functional altcoin takes over and BTC's value dwindles to 0.

I don't doubt that side chains offer some exciting possibilities. But I am still not sure this is the right thing for bitcoin. Perhaps this if implemented into bitcoin core it will herald the end of the alt's in the future and a proliferation of side chains offering discrete services, all fully or partially backed by bitcoin.

I am not against the idea overall. But these new chains are really just alt coins initially backed to some degree by bitcoin. Perhaps that is the leverage the bitcoin 2.0 coins need to succeed in correcting some of the (perceived or real) deficiencies in bitcoin right now. Perhaps we need a static reliable bitcoin blockchain to act as a store of value, in essence like a digital gold reservoir which backs future alt digital currencies. However I suspect this is likely to be wishful thinking. I say alt currencies because these alt chains will not run on the bitcoin chain or protocol, but will simply be linked to it by this 'two way peg' system. If the last five years has shown anything, it is that 'there can be only one' is true really with bitcoin market cap being gigantic and all the rest of the alts being a tiny afterthought.

With each alt side chain presumably there will be an IPO type event where a portion of btc coins go into a black hole of being 'locked'. This will dwindle available supply of btc and instead of being sold off on exchange (ethereum) and depressing the price could actually support it. If lots of popular side chains exist the actual use of bitcoin could become reduced or even minimal. What will keep bitcoin from losing it's value? Nothing I suspect.

What happens if one of these side chain alts becomes very successful (for example is supported by the banking system) and begins to draw a large number of bitcoins in circulation into lockdown. Will bitcoin value suddenly evaporate as all the coins sublime into the new chain in a mad rush? One can imagine some amazing pump and dump opportunities for clever side chain developers to acquire an awful lot of bitcoins through this 'two way peg' mechanism. (Early adopters again wahey!) Or to actually kill bitcoin with if a superior chain emerges.

What happens when a side chain is insecure and is 51%'d if decentralised or is simply hacked if centralised. It isn't hard to imagine a massive gox style disaster with hundreds of thousands of coins getting stolen or lost?

Interesting times.

That's right.  To state it clearly, there will be an arbitrage opportunity.  Buy BTC, transfer into SC, sell SCBTC, buy BTC.  So the price of bitcoin will be lifted with the added value sidechains bring.  In this sense inca, the child chain can never "destroy" Bitcoin even if it ends up carrying 99.9% of the transactions.