Quote from: Melbustus on October 24, 2014, 02:35:23 AM

Quote from: thezerg on October 23, 2014, 10:21:19 PM

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Inca, the number of BTC that are put on the sidechain is irrelevant. As long as there is a single Satoshi left "unlocked" on the bitcoin chain, that satoshi can be transferred into the sidechain for SCBTC. So that Satoshi is worth its value in SCBTC. As long as SCBTC has value, BTC would be a store of that value.
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Quote from: brg444 on October 23, 2014, 11:39:31 PM

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Value of BTC and sBTC are correlated, no matter the 1:x peg.
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Are these statements actually true? You are both assuming that bitcoin is perpetually transferrable to the sidechain at some perpetually fixed exchange rate.

But, IIRC, the Blockstream crew said in the AMA that the exchange rate can be "any deterministic function", with the constraint that no more BTC can get transferred back to the bitcoin blockchain than got transferred out to begin with. That basically means anything. The rate can change with time, or any other input...as long as it's deterministic. For example:

Say a microtransactions sidechain is developed with a fixed supply of one-billion Micros, and an exchange rate of 1 BTC = 1 million Micros. That means that 1000BTC *total* will ever be able to move to the sidechain. Say the sidechain is very successful; ie, Micros work really well and start to gain a lot of real-world economic traction and value. So the 1000BTC gets transferred over.

Now say that Micros continue to see more use. Their purchasing power goes up, but this has no effect whatsoever on the purchasing power of bitcoin because the max has already moved in. Now all we have is another alt that *used to* have an easy decentralized way of buying it with bitcoin.

I'm frankly struggling to see how sidechains are anything more than an optional decentralized exchange mechanism between BTC and alts.

Then I'll create clone of microtransactions sidechain ... will have same properties as original, only no fixed supply.