Quote from: Mike Hearn on September 25, 2012, 08:42:33 AM

I didn't see this post originally, but all the goals cited in the first post can be met with the design that has been on the alternative chains wiki page for over a year:

https://en.bitcoin.it/wiki/Alternative_Chains

Thank you Mike, I had read that and there were a couple of things I found undesirable about the method mentioned in the wiki, hence my attempt.

First, requiring payment after the registration has been made is a potential solution, but is not as desirable an arrangement as merely paying straight up front for the registration.

Secondly keeping funds in deposit as collateral is an interesting way of addressing the issue of doing the initial registration, however again it is not a desirable arrangement financially or economically. It is economically inefficient as the cost of registering a domain far outweighs the reward to those providing the service. Of course the values could be swapped but lowering the deposit amount creates different problems (one I can think of would be easier domain registration DOS attacks).

Also any sidechain using this method of adding incentive to registration and processing of that sidechain would be essentially taking money out of circulation of the economy. Theoretically services using this method could potentially put all bitcoin out of circulation, especially if it were deemed more valuable at the time to do so. In addition, generally the amount of economic activity facilitated by a given amount of currency is usually many multiples of the base value of the currency in even just a year. So removing this currency would have a magnified effect on the wider economy. Simply put, this is truly deflationary.

I am attempting to bring the data transaction (in this case registration of a domain name) as close as possible to a real world exchange.You simply pay in bitcoin to the miner to have your sidechain transaction processed.

I am also thankful for getting such great feedback in this thread! I work toward solving the flaws in this design. I was trying to think of a way of making a bitcoin transaction "unsharable" or local only. Some way to make all other miners reject the transaction but it still be valid for the local node to process it...