Gold collapsing. Bitcoin UP.

cypherdoc

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Aug 26, 2015
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@awemany

Hey, they talk about Freicoin in the SC's WP. And they also mention the possibility that a SC can become dominant forcing a migration of cold wallets to it.

If I were that SC core dev, I'd be totally in tune with that and front run by buying scBTC. I might even try to facilitate that event.
 
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molecular

Active Member
Aug 31, 2015
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Doing this by fudging the calculation of the block size is an ugly hack. We have a max block size limit of 1MB but we're allowing blocks which are actually bigger than that? Except they won't be for older nodes. Awful, awful practices.
It's almost like what politicians usually produce. Very unelegant bulky stuff.

EDIT: maybe should've said "politicans with the help of lawyers"
 
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megadeth

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Aug 28, 2015
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Do any of the Blockstream employees hold a significant portion of the coinage?
I know that LukeJr does.
 

Erdogan

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Aug 30, 2015
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Does anyone else think that once the Chinese miners have all agreed that they are upgrading to bigger blocks, taking the time to make sure everyone over the water knows won't really be a priority ;)
A perfectly good result in my mind.
 

awemany

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Aug 19, 2015
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@cypherdoc:

I don't know whether I should be the least worried about Luke-Jr or maaku7. I think Luke-Jr is seriously off-track regarding his Blockstream support (and that might also be due to COI...), but he seems to have a strange internal consistency in his actions - that I do not fully understand by far, just an impression.

I have yet to see something intellectually convincing from maaku7 though. I am underwhelmed.

He's IMO simply not in Greg's league. I think Greg's easily the most dangerous person in Blockstream's team.

But the argument that devs of essentially Altcoins could try the SC route in the way you describe is something to ponder at least.

I think the blatant approach won't work there, though. You need to built an awesome sidechain first.

I think pegged SCs are much more likely going to be a problem when we finally reach Bitcoin external September / mass adoption. The average Joe in Bitcoin will become extremely clueless, ignorant and easy to sway that point. I'll laugh at the insanity of the world if Bitcoin is going to evolve into the merging of the $/EUR with the same inflation schedule and power distribution - with the added benefit for some that it'll then be a cashless society. And that it can be sold as freely chosen, of course. That would be an evil masterstroke.

In the end I wonder whether it means it would be a good idea to rally against a two-way-peg, should that ever be implemented.
 

Erdogan

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The two way peg will work just as good as a random peg that you find in the fiat world. The mathematic consistency they preach, is just like a central bank clinging to a peg, whatever hell breaks loose. And we know how that will end, all value will disappear from one of the pegged together fiats. Of course, in the fiat world there is a limit, which is where the central bank's reserves of the other fiat is emptied. A mathematical peg means one of the pegged coins will lose all value. I bet the bitcoin value will hold, the sidechain will lose all value.
 

tynwald

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Dec 8, 2015
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I think that's one end game being considered and would make sense for Blockstream e.g. if it was decided that Bitcoin couldn't scale enough but SC 'BSCoin' could. Or just to capture forever Bitcoin value in a chain completely and utterly controlled by BS and it's investors.

Given what we have seen so far it seems unlikely the folks behind BS have not worked out alternate plans leaving them in control no matter what scenario occurs.
[doublepost=1454720055,1454719324][/doublepost]
The two way peg will work just as good as a random peg that you find in the fiat world. <snip>
I've asked this many times and never got a good answer - why would a 2-way Peg hold if the 2 chains don't share same level of security, features, mining support etc. People supporting 2-way Pegs seem to think users would only ever do exchanges from Main chain(=Bitcoin) to Side Chain and back again, not the reverse.

Or am I missing something?
 

Erdogan

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Aug 30, 2015
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I've asked this many times and never got a good answer - why would a 2-way Peg hold if the 2 chains don't share same level of security, features, mining support etc. People supporting 2-way Pegs seem to think users would only ever do exchanges from Main chain(=Bitcoin) to Side Chain and back again, not the reverse.

They seem to think that using a formula to fix the value between two different moneys, magically will remove the economic laws. The value comes from the minds of individuals, acting in their self interest, choosing one thing over another, and a snip of code can do nothing about it.
 
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Zangelbert Bingledack

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Aug 29, 2015
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I had understood the two-way peg as a smart contract arrangement where 1 BTC is forever convertible into 1 SC coin, and 1 SC coin is forever convertible (back) into 1 BTC. If that's the case:

1) It's impossible to have any inflation in the SC beyond what is in Bitcoin. (@AdrianX)

2) The security of failure of the SC doesn't seem to matter since you can always use whatever private key you used to sign the initial smart contract to convert back to BTC (or can you?*).

*If I convert 1 BTC to 1 SC coin then send that coin to a merchant, the merchant hasto have created their own SC coin receiving address, right? How do they redeem that for BTC? Do they have to reference *my* smart contract that I used to lock the 1 BTC?
 
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tynwald

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Dec 8, 2015
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technically you might get back your 1BTC locked away in the Peg. But its value relative to fiat and other currencies would be less if the SC had done a 51% attack to create new coins, or somehow changed it's network value for worse.

IOW the peg doesn't preserve your Bitcoin value unless the SC matches the Main Chain and doesn't change or get attacked. If 45% of Bitcoin was locked in a SC and the SC got attacked or some code issue was fund then Bitcoin price would fall.
 
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Erdogan

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To be sure to get back your bitcoin, it has to be reserved in the blockchain. It still does not guarantee the value of the sidechain coins, which by definition have other traits. If their value in general is lower, they will all quickly be converted back to bitcoins, after having briefly been used for some special purpose where the sidecoin traits were useful. The value comes from holding, so sidecoins will be worth less if nobody wants to hold them for any length of time.

Some practical problems that I have not seen a solution to:
  • There is no way to prove that the private key on the bitcoin side is completely forgotten by some human, and at the same time is hidden in the sidechain system. At least I have not seen such proof. That means there must be an entity, a person or an association of persons, who keeps the key to release the bitcoins, thus a third party.
  • The bitcoin fraction that is converted to the sidechain, will necessarily be part of different sidechain transactions, therefore fragmented. So there will be some extra work to assemble the right amount to move back, or some way to release only a part of the original bitcoin fraction.
Discussed earlier:
  • There will be a delay in the conversion back to bitcoin, which translates into a difference, or a schism, that make the coins separate and counteract the ideal of same value.
Bases on this, and the fact that nobody has created a sidechain, makes me doubt that sidechains are viable.
[doublepost=1454724713][/doublepost]Even if I were evil minded, I would not invest in Blockstream. They will burn their precious investor dollars and then die.
 
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AdrianX

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Aug 28, 2015
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@Erdogan still 71 Bar goes a long way before you burn out. it could deflate the price ;-) for a while.

@Zangelbert Bingledack its bean said that the peg need not be a 1:1 peg. It could be a formula, the arguments given by SC proponents to prevent an inflation SC is, no Bitcoiner would invest in it. The problem being hard money proponents are a minority and even fewer are invested in Bitcoin as a hard money solution. I'm not thinking of the existing bitcoin investors but it's the future ones are the I'm concerned about.

I have a very "limited imagination" (still vastly more active then the average) and I feel if I can imagine half a dozen scenarios to abuse the system with out effort someone dedicated to exploiting a vulnerabilities could think of hundreds of ways to abuse the system especially if they have means and a morel commitment to save the world from hard money evils.

still a Executive Order 6102 type event intended to convert gold to fiat at a fixed rate for a time with an intent to inflate could occur with bitcoin. While the probability is low, the question is why add that ability into the code of Bitcoin at all.
 
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cypherdoc

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Aug 26, 2015
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kinda disappointed. NewLiberty is a small blockist:

 
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rocks

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Sep 24, 2015
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@Zangelbert Bingledack its bean said that the peg need not be a 1:1 peg. It could be a formula, the arguments given by SC proponents to prevent an inflation SC is, no Bitcoiner would invest in it. The problem being hard money proponents are a minority and even fewer are invested in Bitcoin as a hard money solution. I'm not thinking of the existing bitcoin investors but it's the future ones are the I'm concerned about.
To be sure to get back your bitcoin, it has to be reserved in the blockchain. It still does not guarantee the value of the sidechain coins, which by definition have other traits. If their value in general is lower, they will all quickly be converted back to bitcoins, after having briefly been used for some special purpose where the sidecoin traits were useful. The value comes from holding, so sidecoins will be worth less if nobody wants to hold them for any length of time.
The total economic value of all non-pegged Bitcoins and all SC's scBTC can only ever total 21M BTC. If SC's ever cheat and inflate to create more value than assigned to them, then at some point the peg will break and that SC will devalue.

I think we will see two types of honest Side Chains
  • Non-inflating SC's - These are side chains that only create scBTC in exact proportion to the BTC assigned to the SC. Here it is straight forward to maintain a 1-to-1 peg that preserves value in terms of BTC and always allows conversion of scBTC back into BTC.
  • Inflating SC's - These are side chains that create scBTC in excess of the BTC assigned to the SC. These side chains can not maintain a 1-to-1 peg, instead the value of the scBTC will constantly decrease in terms of BTC over time. Conversion back from scBTC to BTC is still possible but you will receive fewer BTC than originally sent to the side chain. Since value is constantly lost, people would be motivated to not keep value on the side chain for long, and instead quickly re-convert funds to BTC after the service is used. These SC need to be honest about the decreasing BTC to scBTC exchange rate at each block.
Of course it is also possible to have dishonest side chains. For example:
  • Inflating SC's that lie about the exchange rate - These are side chains that inflate and create scBTC in excess of the BTC assigned to the side chain. Here people that convert scBTC to BTC first will receive more BTC than they should and slowly drain the SC of the BTC assigned to it. At some point the BTC assigned will run out or the scam will be exposed and there will be a run to convert back to BTC, but once the BTC runs out any remaining scBTC will become worthless.
It should be noted this is exactly what happens in a bank run when a bank has more deposit claims than it can honor. Inflating SC's that lie about the exchange rate are the exact same as modern banks with their false money creation. The only difference is with banks a central bank makes them whole whenever needed, but with Bitcoin we will see defaults.
[doublepost=1454733470][/doublepost]Classic already starting off with double the number of nodes as core 0.12. I am sure Thermos is trying to find ways to censor this fact on the P2P network. Too bad Bitcoin is censorship resistant. [doublepost=1454733693,1454732963][/doublepost]
"Votes don't bring us closer, code does"

Can someone explain to me what this even means? Who's code is NL referring to here. Who gets to decide on the code?

As far as I can tell whenever people have taken this "code" over "votes" position what they are really saying is "trust the experts". Which of course is the complete opposite of what Bitcoin is.
 

cypherdoc

Well-Known Member
Aug 26, 2015
5,257
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@rocks

wow, great observation! didn't see that Classic is x2 Core 0.12 :)
304:152