Forgive me for resurrecting an old thread, but better late than never, right? The ideas in this paper are good, 95% of the way there, I'd say.
Section 3 describes the SPV proof method, essentially requiring us to trust miners not to collude to steal the funds mid-withdrawal, which they could very easily do. This solution, I think, flies a little too close to the sun; requiring this much trust in miners would, for me, break Bitcoin.
Appendix A describes a federated peg method. This requires us to trust federated servers. This would be fine for a laboratory experiment, but this solution is not trustless enough for actual use. No sale!
But it occurs to me, that there's a workable example of something that's not federated, but that resembles a federation enough to make collective decisions. You might even say it's already proven somewhat successful. I'm referring to the super node/master node concept, generically, collateralized nodes. The super nodes decide things in similar way to members of a federation, but membership is fluid. Anyone with enough collateral will be accepted into the federation as a matter of protocol. I'm more comfortable with this model; it makes the system open. Anyone materially invested in the chain can run a node and get a vote. Does the system have vulnerabilities? Having participated in working examples (Dash and others) myself gives me confidence that this system can be stable and robust against potential attack vectors. Bitcoin itself had to stand the test of time before people became confident that it was safe.
The next question: could collateralized "super nodes" on a side chain function to approve those critical Withdrawal Transactions? I think they could, and in a straightforward manner, too. Main chain coins could be held in safekeeping collectively in a multisig address, just as they are in the federated approach. (m of n) keys would be required to move coins out of that address. Each super node holds a key. As super nodes go offline and come online, the remaining nodes sign transactions to move all funds into new (m1 of n1) addresses and share them among all super nodes. It is not necessary to submit these to the blockchain immediately, as long as any single super node remains, the funds cannot be lost. It should be more than sufficient to submit the latest one every 10 minutes or once per Bitcoin block, or at least once per Withdrawal Transaction. The ratio of m to n should be as high as necessary to prevent a single actor or coalition from controlling m supernodes, but be low enough to be reasonably certain that (n-m) / n of the nodes will not go offline simultaneously. We can look at empirical data from Dash to debate and determine an ideal ratio.
In combination with SPV proofs, I would be confident enough in such a sidechain to actually put my bitcoin there.
Topic: Pegged Sidechains [PDF Whitepaper] (Read 14636 times)
Once the genie is out of the bottle and someone creates a new technology, expect the bad actors to be first in line.
Indeed the scammers are out in force in bitcoin land, as I said on the other chain:
its caveat emptor, you shouldnt put money into a chain unless there is some assurance that security & bitcoin protocol knowledgeable people have audited it. People could certify chains (like sign them - "my name is blah and I'm a security researcher with reputation and I and my buddies audited this code and its good") or wallets could etc. Its good and a feature that people can opt to use uncertified chains. You want a situation where there is real open possibility for technical innovation & competition in chain features.
You also want no central control so no chains can get black listed.
Adam
Once the genie is out of the bottle and someone creates a new technology, expect the bad actors to be first in line.
Amir Taaki wants to bring complete anonymity to Bitcoin. First he has to demonstrate it on other blockchains. The SC developers can demonstrate it on an altcoin and if it works, then Bitcoin can adopt it. If they come up with a two-way peg that works, then the trade-off for whatever benefit the SC offers may be worth some sacrifice, like security or functionality. It's unlikely it can be more secure than Bitcoin AND have other benefits. If they did, then just hard fork Bitcoin.
One way in which a side-chain would not be identical to bitcoin is it has different features. Unless we have provable security the added complexity would tend to make a side-chain less secure. (And thats a reason for side-chains .. so that people can get access to more features without exposing other people to the risks relating to their feature).
For now there are also security tradeoffs in the 2wp mechanism, so that is another source of difference.
But in the future, if for example snarks or some other innovation becomes a proven secure cryptographic construct, then we can have security-equal sidechains (and security-equal smart-phones). And then it may be possible to have a more secure side-chain: make a simplified side-chain that doesnt include bitcoin-script, p2sh, etc ie strips a bunch of stuff for pure cold storage. Of course you also have the incentive compatibility issue, however over time the difference erodes as volume & hence fees increase and reward decreases as we get through more halvings.
Adam
There are so many presumptions about what a pegged side chain to BTC would look like.
That is to presume the security of the SC would be equal or greater than the current BTC master chain. I highly doubt that will ever be the case.
If there was ever equal or greater security on a SC then why not have everyone just switch to the more secure chain?
To peg them and say they are "equal" and coins are transferrable between them makes little sense as one chain will always be more secure or have more infrastructure to support it.
Seems like a broken idea to me.
It is a broken idea, but switching to another chain is either done via proof of burn, two way peg, or a hard fork. Either way it's a serious change. The SC idea isn't that bad an idea, but in the end, they would probably lead to more security issue due to added complexity. If it can be done, it will be done, but honey-badger don't care, and I'm tired of the whining from SC folks. Just do it. That is to presume the security of the SC would be equal or greater than the current BTC master chain. I highly doubt that will ever be the case.
If there was ever equal or greater security on a SC then why not have everyone just switch to the more secure chain?
To peg them and say they are "equal" and coins are transferrable between them makes little sense as one chain will always be more secure or have more infrastructure to support it.
Seems like a broken idea to me.
Amir Taaki wants to bring complete anonymity to Bitcoin. First he has to demonstrate it on other blockchains. The SC developers can demonstrate it on an altcoin and if it works, then Bitcoin can adopt it. If they come up with a two-way peg that works, then the trade-off for whatever benefit the SC offers may be worth some sacrifice, like security or functionality. It's unlikely it can be more secure than Bitcoin AND have other benefits. If they did, then just hard fork Bitcoin.
There are so many presumptions about what a pegged side chain to BTC would look like.
That is to presume the security of the SC would be equal or greater than the current BTC master chain. I highly doubt that will ever be the case.
If there was ever equal or greater security on a SC then why not have everyone just switch to the more secure chain?
To peg them and say they are "equal" and coins are transferrable between them makes little sense as one chain will always be more secure or have more infrastructure to support it.
Seems like a broken idea to me.
That is to presume the security of the SC would be equal or greater than the current BTC master chain. I highly doubt that will ever be the case.
If there was ever equal or greater security on a SC then why not have everyone just switch to the more secure chain?
To peg them and say they are "equal" and coins are transferrable between them makes little sense as one chain will always be more secure or have more infrastructure to support it.
Seems like a broken idea to me.
sony xperia z2 hülle
You know that the proper thread to discuss sidechains is this one, right? 
I think sidechains became the topic around that point, plus or minus a few pages.
I think sidechains became the topic around that point, plus or minus a few pages.
The discussion around the potential economic impact of SideChain started hundreds of pages back
https://bitcointalk.org/index.php?topic=68655.14260 some good insight hidden in the many pages of name calling and trolling
You know that the proper thread to discuss sidechains is this one, right?
I think sidechains became the topic around that point, plus or minus a few pages.
I think sidechains became the topic around that point, plus or minus a few pages.
There are so many presumptions about what a pegged side chain to BTC would look like.
That is to presume the security of the SC would be equal or greater than the current BTC master chain. I highly doubt that will ever be the case.
If there was ever equal or greater security on a SC then why not have everyone just switch to the more secure chain?
To peg them and say they are "equal" and coins are transferrable between them makes little sense as one chain will always be more secure or have more infrastructure to support it.
Seems like a broken idea to me.
That is to presume the security of the SC would be equal or greater than the current BTC master chain. I highly doubt that will ever be the case.
If there was ever equal or greater security on a SC then why not have everyone just switch to the more secure chain?
To peg them and say they are "equal" and coins are transferrable between them makes little sense as one chain will always be more secure or have more infrastructure to support it.
Seems like a broken idea to me.
Is it set in stone yet? Or just a proposal?
There are so many presumptions about what a pegged side chain to BTC would look like.
That is to presume the security of the SC would be equal or greater than the current BTC master chain. I highly doubt that will ever be the case.
If there was ever equal or greater security on a SC then why not have everyone just switch to the more secure chain?
To peg them and say they are "equal" and coins are transferrable between them makes little sense as one chain will always be more secure or have more infrastructure to support it.
Seems like a broken idea to me.
That is to presume the security of the SC would be equal or greater than the current BTC master chain. I highly doubt that will ever be the case.
If there was ever equal or greater security on a SC then why not have everyone just switch to the more secure chain?
To peg them and say they are "equal" and coins are transferrable between them makes little sense as one chain will always be more secure or have more infrastructure to support it.
Seems like a broken idea to me.
This thread seems to be dead. Is there a live discussion of sidechains anywhere? On reddit or other forum perhaps?
So what's the point? Experimenting? lol. Why do that on the bitcoin-chain? If you got experiments to do, why not do it with a bitcoin-clone that doesn't carry that marketcap?
I'm still searching for a good justification for this myself
Sidechains are a bad idea.
wow you're profound today :-)
at least you should have added a link to your own thread where sidechain's economic is debated at length
don't worry I'll do it for you:
https://bitcointalksearch.org/topic/m.9292756
starting from the above, the thread turns its focus mainly on sidechains with a lot a valuable
inputs from a lot of people, of course there's also a lot of noise along the way.
edit: fix grammar
Why, because of your imaginary 'put'?
If it is algorithmically guaranteed that you can convert 1:1 from a parent chain to a sidechain, then the fiat exchange rates for each can not diverge, aside from a small spread reflecting time preference (because it may take days to transfer between chains unless you use atomic swaps. But then market makers will happily offer atomic swaps for a spread).
I don't understand why you find this concept difficult. I think you are getting confused by Altcoins.
If it is algorithmically guaranteed that you can convert 1:1 from a parent chain to a sidechain, then the fiat exchange rates for each can not diverge, aside from a small spread reflecting time preference (because it may take days to transfer between chains unless you use atomic swaps. But then market makers will happily offer atomic swaps for a spread).
I don't understand why you find this concept difficult. I think you are getting confused by Altcoins.
Sidechains are a bad idea.
. But as i already stated: i am relatively uneducated
That's the only irrelevant part of your post.
As for the idea that this benefits existing Bitcoin whales. It doesn't. It's a proposal that benefits those who have spent a large part their Bitcoin and those who have yet to invest.
i am a nobody (laimen/enduser/speculator what ever you want to call it) around here. Just reading up on this.
This doesn't look ready at all. This is not coming soon, is it?
I have to ask myself: why implement that in bitcoin without testing? Is an altcoin-experiment planned to simulate for some time before moving to bitcoin itself?
Would be interesting to see what alts join that. Shitcoins for sure. So Bitcoin opens itself up to accomodate shitcoins that can't live on their own? Will enable people with no coding skills to pull scams. Watching, ordered the big bag of popcorn already. Can't wait for you to screw this up royally. Introduce more complexity, go ahead
Provide fertile ground for every possible crap on earth to be secured with bitcoin hashpower that couldn't survive on its own, good idea. Your blockchain will be full of utter shit in no time and then you cry about the bloat.
To prevent it you have to introduce central control very likely in the end.
you big boys are probably better off to play around with new tech in altcoins before moving to bitcoin but very likely everyone is on their high horse and doesn't want to listen. Not that i would care too much.
I have been personally reading around for hours about this, yet i don't see what sidechains should be able to do what an altcoin isn't able to do or what real benefits they provide. I think right now of it as an elegant way to calm down the bitcoin hardcore-hoarders/believers/cultists from the potential threat that an altcoin could be for their investement. If i am right on that one this whole idea is likely a fascist one. I'll continue to read. I just hope i can find the huge benefits that couldn't be achieved by any other means in this whole idea.
Sidechain-coins don't have an independant value from what i read here because of the arb and because they are basically bitcoin. So what's the point? Experimenting? lol. Why do that on the bitcoin-chain? If you got experiments to do, why not do it with a bitcoin-clone that doesn't carry that marketcap?
what most people are missing: 'features are not money' and bitcoin is mainly money. The more you ad unnecessary stuff the more problems you will create. I'd recommend to keep it basic to money and play around with features and other possibilities of the blockchain-tech on other platfoms to not put the main purpose of bitcoin in joepardy (to be currency that is). But as i already stated: i am relatively uneducated
Quote from a wise man:
"Perfection is achieved not when nothing can be added, but when nothing can be left out"
This doesn't look ready at all. This is not coming soon, is it?
I have to ask myself: why implement that in bitcoin without testing? Is an altcoin-experiment planned to simulate for some time before moving to bitcoin itself?
Would be interesting to see what alts join that. Shitcoins for sure. So Bitcoin opens itself up to accomodate shitcoins that can't live on their own? Will enable people with no coding skills to pull scams. Watching, ordered the big bag of popcorn already. Can't wait for you to screw this up royally. Introduce more complexity, go ahead
Provide fertile ground for every possible crap on earth to be secured with bitcoin hashpower that couldn't survive on its own, good idea. Your blockchain will be full of utter shit in no time and then you cry about the bloat.
To prevent it you have to introduce central control very likely in the end.
you big boys are probably better off to play around with new tech in altcoins before moving to bitcoin but very likely everyone is on their high horse and doesn't want to listen. Not that i would care too much.
I have been personally reading around for hours about this, yet i don't see what sidechains should be able to do what an altcoin isn't able to do or what real benefits they provide. I think right now of it as an elegant way to calm down the bitcoin hardcore-hoarders/believers/cultists from the potential threat that an altcoin could be for their investement. If i am right on that one this whole idea is likely a fascist one. I'll continue to read. I just hope i can find the huge benefits that couldn't be achieved by any other means in this whole idea.
Sidechain-coins don't have an independant value from what i read here because of the arb and because they are basically bitcoin. So what's the point? Experimenting? lol. Why do that on the bitcoin-chain? If you got experiments to do, why not do it with a bitcoin-clone that doesn't carry that marketcap?
what most people are missing: 'features are not money' and bitcoin is mainly money. The more you ad unnecessary stuff the more problems you will create. I'd recommend to keep it basic to money and play around with features and other possibilities of the blockchain-tech on other platfoms to not put the main purpose of bitcoin in joepardy (to be currency that is). But as i already stated: i am relatively uneducated
Quote from a wise man:
"Perfection is achieved not when nothing can be added, but when nothing can be left out"
Speaking of which, how would fees work here? The paper talks about how it's most beneficial to the miners to mine on every sidechain they can, but how do sidechains provide a reward? When users are using a sidechain do they need to provide fees to the network with their own bitcoins?
Yes, just like any bitcoin transaction...Sidechains might also use things like demurrage to give miners a subsidy.
the most most exciting use SC-crypto's I can imagine:
free transaction fees with almost instant confirmation, demurrage fees 5% per year for saving in your own private keys, and interest for saving on a Centralized server 2% (determined by money in circulation ie block processing demurrage); instant access to funds with centralized server; and 2% inflation (server revenue = 0% cost for saving); a 1:1 peg with Bitcoin, miners receive 1% of all transactions that incur demurrage for MM. The intervals and percentages are not set but are amortized over the year and just represent an incentive split for the - per block demurrage. throw in a 3 days of clearing to exchange out BTC to encourage users to take advantage of the almost instant network with no risk of loosing Bitcoin as its secured with a 2wp.
Thanks for the comment! It makes sense, but also makes me wonder about the value of "transfer a bitcoin to the sidechain and back to the btc blockchain" - what would be the real world example when moving is superior to cross-coin trading? Not to be critical, just a genuine attempt to understand. In other words, what can't be done in a world where there are only merge mined coins (chains) and no pegged coins? I couldn't think of anything...
atomic transfer?
afaik this is not possibly with other chains. it could be very useful for many things.. first thing which pops in my mind is a chain for micropayments which has a different security model than bitcoin and maybe less blockchain space requirements.
Boussac and I are trying to better figure out the details of the peg mechanism and their consequences at a higher level (economic).
Basically, the question is the one asked by Boussac:
Once a bitcoin is locked to a sidechain, it is entirely up to the sidechain rules what the terms are for the release.Basically, the question is the one asked by Boussac:
Quote
Let's say I have locked one bitcoin to release one sidecoin. To release the locked bitcoin, does my sidechain-enabled wallet simply collect one sidecoin (plus tx fee) worth of sidechain unspent outputs or are there other constraints on my sidechain transaction transferring the coin back to the bitcoin blockchain ?
The obvious case is 1:1 equivalence, but there's nothing saying a sidechain must do it that way.
Thanks but my (very basic) question is about the fungibility of the sidecoins.
I rephrase the question.
Is the release of a locked bitcoin (or any fraction thereof) tied to a specific sidechain transaction OR is there flexibility in the choice of the unspent outputs on the sidechain to release the locked bitcoin?
Pratical use case: suppose I have locked one bitcoin in tx A to release one sidecoin in tx A' on the sidechain.
Later, I lock another bitcoin in tx B to release another sidecoin in tx B'.
Can I redeem the second sidecoin to release the first bitcoin ?
Obviously you can redeem any "sidecoin" of the same asset type using any of the locked coins, since as soon as you do a transaction on the sidechain the original transferred-in coin is consumed.
but aren't private keys created on the SC that are specific to a certain scBTC? and when redeeming back to BTC, wouldn't the owner of those same scBTC have to come back thru the same SPV proof where they originated from?
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