Really great work on this. Any luck with the simple client/server? Did it work as expected. Have you discussed this with the people like Adam Back pushing the SideChain changes, so that they can include this?
I created a new BIP draft relating to this.
https://github.com/TierNolan/bips/blob/bip4x/bip-atom.mediawikiThe latest version allows transfers between chains as long as 1 of them supports non-standard transactions.
This means that fast testnet <-> mainnet transfers would be possible.
Testnet would have to have the longer timeout, since it is the network that supports non-standard transactions. Everything on Bitcoin would standard.
I am going to look into creating a simple client/server this week-end to verify that the scheme actually works.
What is cool about this is that it means that a BTC <-> altcoin trading system would only require that the altcoin accepts the non-standard transactions template.
It should be much easier to convince an altcoin dev to make the change than updating the Bitcoin reference client's rules (though hopefully, they will too).