Perhaps cypher's concern is that everyone moves their BTC over to the sidechain, then the sidechain fails in such a way that it's not possible to reconvert them to BTC, and the whole Bitcoin ledger is destroyed.
let him (brg444) answer since he's the resident shill.
I have explained in many posts above why it is unlikely everyone would move their BTC over to a side chain.
Cypherdoc suggests an anonymous peg to Bitcoin will be developed and by a curious strech of imagination envision that EVERYONE would want to transfer their BTC to that chain.
so, remember that the working example here is one where we have a Bitcoin fork plus perfect anonymity added on top as an innovation. i believe the vast majority of BTC holders value anonymity. therefore perfect anonymity should be better than pseudonymity.
since that's the case, why wouldn't you then move ALL your BTC into scBTC?
My answer to this is there is a place for both a white and a black market. You are delusional if you believe everyone would want to support or transact a 100% anonymous chain. There are some advantages to a transparent ledger that are not negligible.
If I'm wrong and the market somehow unanimously supports the anonymous feature then refer to :
... if a sidechain's feature becomes so obviously superior that the whole market wants it then it is much more likely this feature is implemented into the Bitcoin main chain, either as a soft fork OR a hardfork. This makes much more sense for every market participant than having them all switch to the sidechain. In that scenario, hard fork are still a very tricky proposition but with the help of experimentation and beta implementation within a sidechain, the risk is considerably mitigated and consensus much easier to obtain.
I tend to think this is a bit unlikely, though, simply because I can't see "everyone moves their BTC over to the sidechain" until it is absolutely solidly established that it is no more dangerous than Bitcoin is. That could take years, if it ever happens.
my thoughts exactly