Topic: Scaling proposals - another suggestion: move token (Read 1586 times)

What you propose here is basically what the "sidechain" idea is about. Rootstock (RSK) is a good example. They plan to go live in May with a preliminar version that will not be totally decentralized. Bitcoin would need a new opcode to make possible a decentralized "return" of the token from the sidechain to the main chain.

Eth and Ardor, as far as I know, already have BTC-backed tokens, but I don't know exactly how they work (if decentralized or centralized). Bitshares has also a Bitcoin-based token (BitBTC), but it's based on their particular pegging mechanism.

again: absolute != absolutistic
And by the way: the amounts are depending on the unit and number system. Further they can be different in another dimension. Broaden your view...

Yeah, you are right. Speed of light isn't really absolute, and absolute zero (0K) is also in fact relative.

P.S. Your proposal was to be published today. It would be a good joke.

Yes, I said, thats discussable... but we don't have consensus.
We could only reach that, if Satoshi himself shows up and confirms the change...

The limit was 32MB when I signed up. Bring back the 32MB limit.

- q.e.d.
- absolutistic != absolute

That is an awfully "absolutistic" view.

The 21 million coins is an absolute too.  

My proposal was not about investing in ETH but use it's system.

Anyways, I guess you will also get enlightened somewhen, that absolutistic views of any kind are wrong. BTC will not stay the (only) holy gray forever. ETH is as much or less fiat as BTC. They both have their blockchain set rules, they both have no central authority besides the miners (Vitalik did not make decisions he let the miner choose). They both are by definition fiat, because their tokens are not a commodity with a usage besides trading.

Just because BTC is first or has a upper limit (btw. ETH could get a upper limit as well) doesn't make it that different. And a fork will happen to BTC as well, if we don't find other solutions.

ETH is a fiat currency. Who can invest in a fiat pretending to be a crypto? Only speculators and those who have no understanding what is a cryptocurrency.

The miners have interest to protect bitcoin, thats helpful, right. But there are also cons. They have for example also interest to keep the rates high and because of the margin of hardware/energy cost and return the miner market can shrink to a quite centralized minority.
We have partial centralization in bitcoin in many parts already anyway with the payment processor companies. It's not preventable and I don't think it's harmful, as long as they are only many smaller centralizations.
If bitcoin will not improve, a Paymentprocessor company could decide for its own, to move the tokens of their customers to other chains by using their identity as a collateral on the locked coins. By this way it could heavily centralize btc and grow because of the technical improvements on the other chain.
Building an alliance for that project with a majority of bitcoin holders will prevent that.

How is such a solution going to be implemented in order to protect bitcoin's decentralization and neutrality? In its current state, miners can only act to change bitcoin (without acting against their own financial interest) in consensus. This means that even the most powerful party in the whole process at the moment, have strong incentives to protect bitcoin. What would ensure that such a solution would keep bitcoin's strength in decentralization and not introduce new attack vectors via even the slightest centralization?

There are a lot of per and cons discussions about no change at all, segwit and unlimited right now.
I want to summarize the basic problems of both and my preferred solution.

I think any kind of change of the current protocol would "mess up" bitcoin payment systems because the current crypto payment "standard" will be destroyed.
We all subscribed to 2 major bitcoin laws, when we bought or mined them:
1. The protocol is 1MB per block. Period!
2. There are only 21 Million Bitcoins. Period!

The first one may be discussable and unimportant for the majority (believe it or not, miners are actually a minority of users) the second one is more severe, than you might think.
The reason is: We would never reach 100% consensus with any kind change. Never! That's simply impossible. There will always be some stubborn people, no matter how good the arguments are...
That means, we would have a forked chain in any case. We turn our beloved bitcoin into two altcoins.

And with the fork we will automatically have 2 chains, with a maximum of 21 million each!
And that further means, we more or less double the amount of coins. We could call that a hidden "break" of the protocol.
Yes I know, its not a double actually, it's two different chains, different coins, bla bla bla... I know that, you know that.
But the uniqueness of the BTC token is gone. Many many of the investors and the press will even not understand the facts! They will just think bitcoin was hacked, unstable, unsecure, unreliable or whatsoever FUD can be used...
Consumers just don't understand it! "Which one is the 'real' one now?" talks will be everywhere ...

We had similar problems with ETH already. The fork harmed ETH a lot.
Ok, it recovered quite good afterwards, but this is, because people invested in ETH are way more technical understanding than the majority of Bitcoin owners and lately because of the entethalliance.
If we fork bitcoin the trolling will be gigantic! It could throw crypto miles back or maybe even kill it completely, if the fork is too severe. Just look at current price fluctuations because of the threat already.

Keeping that in mind I think, there is only a solution with Bitcoin as a truely "unique" bitcoin token. I know it cannot be a perfect solution, but we will suffer in any way. It's just about the least impact.
The bitcoin term is currently used for the token and the whole system, which includes the chain. But the real "value" of bitcoin is actually not the payment system itself any more.
The majority of consumers doesn't use the software. They just use the token. With bitpay, coinify, coinbase, you name it.
It's just about the limited amount and the decentralized payment system between the parties. The "kind" of system behind it is exchangeable and there are plenty of other systems available.
They even are technically improved after the 8+ years, since bitcoin was invented. All those company payment processors still build their system on an outdated protocol which should be glued now somehow to make it a little better. But the ultimate solution is out there.
The current discussed solutions are like having a 14.4k modem and debate about buying a second one or improve it to a 56k one, just because we have to stick to an analog line, but ISDN and DSL is already waiting. We just want to have fast and uncensored internet, who cares about the line?
We have to move the token!

Moving the token
So how can we move the BTC token? This are my suggestions:

1. Create or choose a enterprise ready payment system, that supports the move.
There can be build a new Bitcoin 2.0 blockchain for this use case, but I honestly don't see the point to create yet another system.
There are already plenty of systems, that can be used. The best choice would be Ethereum because its enterprise ready and has a high adaption. Further possibilities would be (in no particular order) NEM, Komodo, Waves, Lisk, Ardor/NXT, Bitshares.

2. Create a multisig bitcoin address
We need a "container" for the frozen Bitcoins, that ensures, that the moved bitcoins cannot be used on the bitcoin chain any more. They have to be locked in a multisig address. This way we can make sure, that the coins are still accessible for the way back. There should be a lot of participants on the multisig address, so that the community can be sure, that the address can't be exploited somehow.

3. Create a smart contract
If the bitcoins are sent to the container, the new BTC asset tokens should be automatically sent to a corresponding address on the other chain. Also sending it to a container address on this new chain could unfreeze the original bitcoins, so that they can be used on the bitcoin blockchain again.
This is probably the most tricky and risky part. If there are bugs in the system, it will be a mess...
But it can be done!

4. Move payment processor companies to the new system
If everything works, the companies can use the new chain for payment to each other. Using newest technologies with childchains enables an unlimited throughput, because you can switch parts to another chain as soon as there are limitations. In a centralized way bigger payment companies could also use their own way to move the tokens to another chain, if the payments stay within their system.

5. Bitcoin block generation
The bitcoin block generation would still go on like before, because bitcoins can only be generated on the bitcoin chain via PoW. So the old chain would still have its use case. There would also be some transactions, but the majority would be on the new chain.

6. Final step
The bitcoin PoW, that consumes so much energy can get obsolete, if the created coins are not worth to run a miner any more.

Further Advantages
The bitcoin consensus was ment to be for all "users". Satoshi invented the PoW consensus because in anonymity hardware is the best choice to create an equality over all participants. Sadly the asics destroyed that idea miserably. Now there is "the miners" and "the users". The worst thing is, that the users are the majority and still have no voting rights. Keeping the current system like it is this unbalance would get worse and worse. By moving the token off the chain we reduce the power of the miners to a minimum.

This is a full copy of my article on http://cryptopay.blogspot.de/2017/03/bitcoin-scaling-proposals-another.html