I was going to ask for a link to his analysis of side chains, until I read that myopic "analysis" on the block size limit.
Did this guy every hear of arbitrage? If the market is undervaluing the peg, then there is an incentive to trade back to main chain, vice versa back to side chain. The technical peg insures that arbitrage will destroy any deviation. NuBits only has an algorithmic (qualified) arbitrage peg to $USD and it appears to working. An absolute technical peg is even stronger.
http://bit.ly/1wlut8ahttp://www.reddit.com/r/Bitcoin/comments/2k9fcp/pdf_on_sidechains_sidechained_bitcoin_substitutes/Whenever an SBS changes hands through a transfer of control on its own
sidechain,
it
should
be
expected
to
do
so
at
some
floating
market
rate
(
barring
legal
price
controls)
.
However,
this
rate
may
well
not
perfectly
match
current
m
arket
rates
for
bitcoin,
that
is,
an
SBSs
technical
conversion
rate
with
bitcoin
may
not
be
the
sole
factor
influencing
its
market
rate.
The
se
rates
could
match,
but
the
grounds
for
assum
ing
that
they
actually
would
in
any
given
case
do
not
seem
compelling
.
T
he
two
-‐
way
peg
,
while
certainly
expected
to
be
a
large
valuation
factor,
coexists
with
other
complex
discounting
and
premium
factors
.
These
could
combine
to
result
in
each
SBS
trading
at
a
market
rate
that
diverges
from
that
of
bitcoin
within
some
unpredictable
and
changing
range
.
Each
SBS
might
likewise
differ
in
current
market
value
from
each
other
o