Re: Gold collapsing. Bitcoin UP.

simple theory question for all SC proponents. so simple in fact what am i missing?

we have 13M BTC @ around $325. SC comes along and lets say 3M BTC --> scBTC (just for illustration). we know that the price of scBTC has to be lower given MM, newness, being unproven, risk of failure, etc. let's say price starts off @ ~~$100~~. $325

why don't arb bots circle back around and drive BTC price down to say $250-270? multiply this by 1000 SC's.

FTFY

it can't start off @ $325 b/c the SC IS less secure and the risk of being on an entirely different ledger with less security means the instantaneous initial price has to be lower. yes, with time the 2 prices will equilibrate, but at a lower price.

But the 'two way peg' in the example you describe won't happen in reality cypherdoc. Why the price arb at all? Anyone buying SCBTC for less than BTC on an open exchange can simply send them back to the main chain and sell bitcoin and profit. Then buy more SCBTC, transfer them back to the main chain and sell them. Repeat ad infinitum. If the market prices SCBTC lower than btc then all SCBTC not in use for an actual purpose will migrate back to the main chain. It doesn't follow there will be a price change in bitcoin as a result, in my mind at least.

OK i can see that selling bitcoin could depress the price. But that process would result in the coins migrating back to the main chain so I don't think it makes much sense as an argument against sidechains.