Quote from: d5000 on February 13, 2019, 09:49:25 PM

This looks basically like a "sidechain world" without main chain.

Yes, but also without the "merge mining". I propose to make sure that the protocol gives convenient access to an atomic-swap market. In my impression, that should be enough to make the different sidechains look like one. As long as the wallet software does the hard work for you, of looking for atomic swaps, carrying them out, and then making the payments within the various sidechains, almost nothing changes for the user. The "send payment" button triggers more actions under the hood, but that's also about it.

Quote from: d5000 on February 13, 2019, 09:49:25 PM

But all other problems and challenges of sidechains would also be present in that model. For example, as ETFBitcoin already wrote, there is a danger that the different "shard tokens" could not be entirely fungible and instead convert into several different "coins". This could happen, for example, if one chain becomes notably weaker (has less support by miners) than the others, is thus less secure, and people (above all those waiting for high BTC amounts) could then desist to accept coins from addresses of that shard.

For the miners, not much will change either.

Instead of mining one block in one chain, they will mine 256 blocks in 256 subchains. Of course, they have the option of not mining for one subchain and only to mine for other ones, but why would they do that? Why would a miner mine in subchain 56 and not in subchain 89? It is equally difficult. The payoff is exactly the same. So, for all practical purposes, subchain 56 and subchain 89 are the same thing.

Quote from: d5000 on February 13, 2019, 09:49:25 PM

To avoid that, you would need a two-way peg mechanism that ensures that you always can change one coin of one shard to another shard. That could be more difficult than in a sidechain world, because an active coin in a sidechain has to be blocked in the main chain to avoid the supply being diluted, and thus there is always a main chain coin available for people wanting to exchange sidechain coins for it. In this proposal, however, this is not the case - you would have to force atomic swap servers to accept an 1:1 rate (and if they don't accept then they may simply reject swaps coming from shards they don't like).

The atomic-swap servers do not accept a 1:1 rate. As an atomic-swap server, you can buy at 0.90 from subchain 67 and sell at 1.15 in subchain 112. Nothing prevents you from doing that.

However, it is a free market, and there are other atomic-swap servers. Hence, in an open market, you are quite unlikely to find counter-parties for your 0.90/1.15 offer. It looks expensive. If you can make that much money by swapping, I will compete with you with my 0.95/1.10 offer, which is obviously still a lot of profit. So, don't be surprised that the market price will eventually turn out to be something like 0.9999999999/1.0000001.

Furthermore, if you are an atomic-swap server, you had better watch out for offering irrational prices or discriminate against arbitrary sub-chains, because automated arbitrage bots will not hesitate to take you to the cleaners. For example, if you accidentally happen to offer something like 0.98/0.99 or like 1.01/1.02, that will go wrong within seconds. You will find your coin buffers depleted almost immediately. Arbitrage bots are merciless. If they smell blood, you will be gone very fast. That is the same phenomenon as on any exchange market.

Atomic-swap servers provide liquidity. Hence, the size of the swapping fees will make sure to attract the liquidity for which the users will want to pay, by matching supply and demand. I suspect, however, that these fees will be very reasonable. Still, if you put 10 BTC on one subchain and 10 BTC on another, you obviously expect to get paid for keeping your money available for atomic-swap market takers. Otherwise, why would you do it?

Quote from: d5000 on February 13, 2019, 09:49:25 PM

In my opinion, if I understood the proposal correctly, then the drivechain proposal is less difficult to implement, and is also more flexible.

I think drivechain is an interesting idea. Still, it requires "blind merged mining". In this proposal, we do not need that. Tried and true atomic-swap smart contracts are enough to achieve the same. It is simply "time-locked payment against preimage" all over again.

Even though Tier Nolan introduced his multi-billion dollar idea of atomic swaps in this very forum in 2013 already, it still took until 2017 for someone to actually write the first prototype. In my impression, Tier Nolan's atomic-swap idea is much, much bigger than just trustless trading of altcoins. His idea will undoubtedly turn out to be gigantic. In my impression, atomic swaps can almost trivially solve the pernicious problem of sharding and allow for infinite scalability.