Quote from: brg444 on October 31, 2014, 12:53:40 AM

Quote from: Adrian-x on October 31, 2014, 12:45:46 AM

I still need to understand how, to me it looks like using ones Bitcoin as collateral while one uses a SC's utility.

well technically this is what it is. but being that the peg is 1:1 and that they are utility chains that are application specific, their value will mirror BTC's. this does not make them fungible : as others have pointed out and as is properly explained in Konrad Graf's paper, various cost, risks and uncertainties will initially create a likely discount of the BTCpeg (if it were to be traded on the open market, for example). in all likelyhood though, market maturity, infrastructure reinforcement and arbitrage should help narrow that gap significantly in the long term.

My understanding is a 1:1 peg is optional. And there is no mention of pegging the block rewards which would also be required to maintain a 1:1 pegged relationship.