Quote from: AliceWonderMiscreations on March 11, 2017, 03:29:29 AM

Most of them lack the hashing power that would be needed to withstand a sustained attack by a state level adversary wanting to re-write transaction history.

Mining power is extremely important. One of the drawbacks to promoting side-chains for the bulk of transactions is it removes the financial incentive to professionally mine, reducing the security provided by the hash power.

You are thinking from a pure Proof of Work viewpoint. Maybe proof of work alone is not a good idea, because its security is limited by the financial power and incentive of its adversaries. That is good enough to stop your local hacker from messing with it, but it won't stop the Chinese government, if one day it really gets pissed at bitcoin, from killing if it throws a few billion dollars at it.

On the other hand, small chains don't need big protection, because there's not much at stake ; and there are other cryptographical protections possible. What is good with proof of work, is the initial distribution of the emitted coin, and the fact that seigniorage is burned.

My idea of many small crypto currencies in which people don't "invest" but just use to sell and buy goods and hence for which the market cap is low, and of which it is not a big drama if it dies, is exactly the fact that there's not much incentive to destroy it, because there's not much at stake. The goal being to *pay* people, not to *store value*. If a currency exists, I buy some coins (with another currency of course), with those coins, I buy what I want to buy, and that's it, I don't care much about the future of that coin: it did for me what it had to do. If that coin gets destroyed by the Chinese government (why would they ?), I don't care. Tomorrow, there's another coin, I buy some, I pay the stuff I want to obtain with it, and that's it, again.

That's how I use bitcoin. Well, how I used bitcoin. I bought some bitcoin when I wanted to buy stuff on the internet with it. What happens with bitcoin after that, doesn't really matter. If the merchants would accept monero, I'd pay in monero. Or in Litecoin. Or whatever. The day they destroy bitcoin, I wouldn't care. There are other coins. And if those get destroyed too, no problem. There are still other coins, and we can make new ones.

That's my idea of decentralized. Not a single monopoly.