Bitcoin is too inflexible for what Ethereum is trying to do and vice versa. With Bitcoin Ethereum has a safe and reliable store of value which it can integrate into its systems. With Ethereum Bitcoin has a platform uniquely suited to expand its potential. It's a win-win situation.
When and how did Ethereum solve the two-way-peg-problem that is required for it to "use Bitcoin as a reliable store of value which it can integrate" ?
Ethereum will not work like a sidechain. Distributed apps running on ethereum will run Bitcoin wallets and operate them through smart contracts.... I think.
So you're saying that it's possible to move bitcoins back and forth from the Bitcoin blockchain using an outside D App without Bitcoin being aware of it and without a trusted third party ? Interesting.
(I am pretty sure that it's not possible)
No, that's not what I'm saying. The bitcoins stay on the Bitcoin blockchain. It's no different from me or you or Circle's system using Bitcoins. Except it's an Dapp doing it.
Ok but who holds the private keys ?
Me ?
You ?
The Dapp maintener ?
The Dapp. Who controls the Dapp depends on the program. If you run the program, control the program and fill its wallet, then you control the wallet. You can also set it to be completely autonomous, which would be handy if you want to run a smart contract with triggers involving other people.
I still don't understand.
I think I will have to wait for a real dapp to implement it to see if it works.