If the old coin will be worthless or nearly so, then negative feedback and instability issues remain.
In the case of burn, as you indicated in your previous message, the money supply of the old coin is shrinking at the same time the network value is shrinking. Thus old coin price P=T/M where T is the value of the old network and M is the money supply of the old network. As people migrate (burn) you have T and M both approaching zero (but not necessarily at the same or even a constant rate) and P is not well formed and highly unstable as M shrinks. (Even cypherdoc understood this!) By contrast, in the case of a spin-off that obsoletes the old network, you simply have P=T/M where T approaches zero and M is fixed, so this expression is well formed, and P is simply a clear measure of value where the market will naturally absorb speculative fluctuations between old and new, allowing stability and transparency.
How does an equation with two variables become not well formed?
Sorry I mistyped. I meant well-defined in the sense of having a well-defined value or behavior as M approaches zero (which after all is the intent of al this). The point being that reducing both M and T at the same time inherently results in potentially wild price swings and instability, which do not exist if M is left constant.
There is no wild swing likely because of arbitrage. Someone will be willing to pay below unity relative pricing to burn the coin. After burning deadline, M is constant.
Whereas, if you leave users to apathy, they will only act during wild price swings and thus make them much more wild stampedes.
Hopefully you can see now I am correct?
Arbitrage is essential. It is lost in spin-offs that are not burns.
Also, on the matter of burning being more informational, that can very well contribute to the problems. Game theory is complex and withholding information can have value, so if you force people to reveal information you may discourage them from taking the action (until a cascade or other instability requires them to do so). That is not really the intended outcome here but in game theory analysis, intent doesn't matter, outcomes do.
Hmmm they have a deadline to burn so their choices are to do research and choose the better fork, to wait until the deadline to see how many others burned, or to not burn and pay market exchange rate any time after burn deadline. None of that seems to be an issue in any possible scenario, except that there is going to be some loss of money supply because not everyone will burn by the deadline. But you've got ongoing debasement to pay mining to compensate for diminishing money supply due to upgrades.
I really can't see how this mark-to-market adds any risks that aren't just obscured otherwise. Marking markets to actual value sooner enables faster annealing of fitness. Allowing QE to kick-the-can causes stagnation and the entire coin ecosystem (both coins) is in a state of limbo longer.
If only a few coins are burned, then it means the upgrade isn't compelling so it may die. I mean for example if the upgrade adds anonymity and the only way you can use it is to burn, and very few burn in the months to deadline, then we know anonymity isn't that important to most users. But the developer will know this during his crowdfunding and thus never end up starting (or completing) the upgrade. The large crowdfunding commitment will help nearly insure the upgrade will garnish enough burns to be viable.
As the old coin gets mostly burned out before the deadline, it will also likely get totally burned out.
However, there is one factor which are those people who don't burn because they are not aware, on vacation, or not very tech savvy. But probably services such as Coinbase, will be making that decision for them. Not that I like that, but that is reality.
I'm not going to address the other points individually because I've stated my perspective, and I'm reasonably confident it is more correct (though may err in small areas as my effort to analyze this in precise detail has been limited). I also feel you will understand the issues in time, as you have on the question of sidechains.
I have not changed my opinion that if the technical aspects of side-chains can be perfected, then arbitrage of side-chains can maintain the peg within a reasonable tolerance. But that required numerous improvements to coin tech, including eliminating orphaned chains and 51% attacks. Remember I have a novel block chain design that I claim does that. So side-chains may still be viable, but probably not with the tech Blockstream has available today. So my issue with side-chains is the complexity that has to be hurdled before they are viable (if ever) and the fact that crypto land will likely have already sorted out better solutions before that. So it is not really a rejection of my original analysis that arbitrage can work (within some tolerance band), but more a realism about timing, complexity, and that markets tend to find a K.I.S.S. solution before the complex solutions ever get entirely sorted. In short, complexity is a killer.
Complexity is the reason I don't like your open-ended spin-off. Giving everyone free coins creates no momentum in the market. Just adds and delays confusion. Why would anyone invest in the crowdfund, if they will get free coins instead by not investing. And without a crowdfund, how will the developer get paid? If the developer mints some new coins for himself, so each upgrade not only doubles the money supply, but adds more for the developer. But then the developer has not guaranteed income for doing the work. The really attractive aspect of the crowdfund model is the developer knows what he is being paid in advance. And the users know what features they are getting else they are refunded.
It requires movement of capital to start a trend. You propose to encourage people to delay any move.
Thus there is no need to debate point by point. (You will note by the way that I likewise did not extensively debate point-by-point on sidechains and simply let you and others figure out over time what I had recognized earlier.)
Well I am seriously considering crowdfunding and the burn model needs to be precoded into the first version of the coin, so if you have any convincing arguments, I'd sure like to read them. Do you feel I don't appreciate just because I am not yet agreeing.
Why do socialists always prefer a little short-term stability at the cost of manic, mass stampedes later.
In fact this is precisely what burning does. Spin offs do not create manic stampedes. So again we agree the goals but disagree on the analysis of various mechanisms. I'm content to leave it at that.
How so? Did you forget arbitrage? Spin offs delay manic stampedes, because users have no incentive to converge on a trend intellectually (research on the upgrade) until they are forced to by something that freaks them out, such as the price dropping or rising really fast on one of the coins.