Called me biased but this sounds like the BEST solution to Bitcoin's scalability issues and iXCoin would be the best natural fit in the world. Any input?
-----------------
A hard fork to increase the block-size limit is the same as creating a new altcoin (bootstrapped on Bitcoin's blockchain), and then just telling everybody to switch to it; that's an idiot's approach to a decentralized system.
You want new characteristics for Bitcoin (e.g., a bigger block size).
This requires making a new system called Bitcoin 2.0 (or BitcoinXT) that copies over and begins to extend the same blockchain used by Bitcoin; this is the same as making a new altcoin (boostrapped on Bitcoin's blockchain) and then just telling everyone to move over to it.
In technical terms, doing this is called a hard fork, and it's disastrous because it can split the network, and thereby
destroy fungibility—people will disagree on what a bitcoin is (that is, their software will disagree); hard forks as a policy for upgrading - means that the characteristics of Bitcoin are always at risk—the contract to which people thought they had agreed can just vanish! Furthermore:
* User support for Bitcoin 2.0 is NOT well known.
* Mining support for Bitcoin 2.0 is NOT well known.
* Whether Bitcoin 2.0 functions as intended is also NOT well known.
-
A sidechain Bitcoin 2.0 is basically a hard fork Bitcoin 2.0 as described above, except you do NOT copy the old blockchain over to the new system; instead, you connect a new blockchain [e.g. *iXcoin*] to the old blockchain by means of a 2-way peg [with a 1 to 1 ratio?], and then disable the creation of new coins, (iXCoin is already done minting) deferring solely to the old system to continue that minting process.
- To use the new Bitcoin 2.0 system, any user can simply choose at his leisure to transfer control of his assets from the old Bitcoin system to the new Bitcoin 2.0 system; if he wants to return to the old system, he can do that, too!This transfer of control back and forth can either be explicit or implicit:
- The explicit approach requires no counterparty; it uses the transaction mechanisms of the 2 systems. However, it is a slow process, because security requires, essentially, many confirmations in order to synchronize the 2 systems.
- The implicit approach requires a counterparty; it involves exchanging the assets of one system for assets of the other system—but possibly with the security of atomic swaps, because both systems are digital and cryptographic; this could be very fast and cheap, and would facilitate an influx of new users who want to try out the new system.
- In the beginning, people will move their coins to the new system to get access to its new features, and then move back to the old system for the sake of security; as time goes on, people will just use the new system almost all the time; eventually, they'll use the new system all the time [iXcoin = daily use currency].
- Thereby, the new characteristics (e.g., larger blocks, etc.) can be tested, and the Bitcoin 2.0 system can therefore be built slowly until it proves itself; hopefully, eventually, lots of people and miners will transfer to the Bitcoin 2.0 system as it becomes apparent that it's a good system.
[Exactly why IXC can perform and pass the 20mb stress test and other huge tests and forks down the road].- If Bitcoin 2.0 is successful, the decision can be made to hard fork Bitcoin 2.0 to copy over the rest of the original Bitcoin blockchain and continue the minting process; this makes it an altcoin to which virtually everyone has already moved! Yet, isn't a hard fork what everyone was trying to avoid in the first place? Well, at that point, the hard fork is much more trivial, because:
* It is known how well the economy supports the new system.
* It is known how well the mining industry supports the new system.
* It is known whether Bitcoin 2.0 actually functions as intended.Here is the whitepaper for such a system: whitepaper
https://www.blockstream.com/sidechains.pdf--------
I don't know about you guys, but this sounds like the best total solution. And the best part is that Gavin et al will have the full compliance and approval of the Chinese mining pools without whom they cannot update Bitcoin without splitting it up anyway. This makes this solution a done deal as long as those making the decisions inside Bitcoin can see it and agree.
Edit:
Who runs and controls Blockstream?
