ex0du5, the point is that the bitcoin validators can do full validation of the side chain via a constant-time SNARK validation, even one whose rules they don't know.
Thanks. I thought there was some greater guarantee being implied (with later mentions of moon math). I see this doesn't actually prevent all ways of taking coins from others, and others have expressed the same possibility. This is an area I'm trying to get a better understanding of, as I've been analyzing other algorithms, and I keep seeing these discussions pop up.
Wanted to clarify: the point in my view is the snark proof proves that the validation program was run on the sidechain and the rules were followed. Then the bitcoin chain can validate the proof without needing to understand the validation program. Other than the risks coming from bleeding edge crypto, it thereby allows the sidechain to offer the same security properties as the main bitcoin blockchain.
gmaxwell wrote about this concept first here
https://bitcointalk.org/index.php?topic=277389.0I still don't see what this solves that altcoin exchanges don't.
alt-coins as usually defined have floating market prices, pegged coins do not.
Sidechains give a way to extend the parent chain (eg a bitcoin sidechain allows you to experiment with and deploy new features like scripting, issued assets, different block intervals etc).
You have an entity that takes value into it's store and gives out value in an alternate blockchain that may or may not follow similar rules (some altcoin, maybe a Bitcoin clone or maybe something quite different). The exchange can hold onto that value until the altcoin work is done and exchange back the value. Validation is done in whatever currency is chosen for the transfer, which can obviously have any of a variety of zero-knowledge transaction and block validation schemes.
that sounds rather centralised? Dont forget MtGox also operated like that - they exchanged your bitcoins for gox iou entries in their database. Then some stuff happened (you trade etc) and finally you ask for repayment of the iou. If its central there is a central point of failure that can lose or steal the backing funds.
You can think of a sidechain as a decentralised escrow agent where the sidechain economic majority (hashrate etc) controls and fairly administers the backing.
Adam