I don't begrudge Cypherdoc not going into detail on dismembering these, because they aren't all that substantial as critic defenses go. I don't know if it was sincere claim that these "debunk" all concerns for all people reading this or if that is just baiting.
Mistake 1 : Sidechains can protect the value through merged mining.
If at some point in the future, there is a particular SC that consumes the bulk of bitcoins in circulation, there is a non-zero risk to Bitcoin that there will be insufficient bitcoin transactions to support bitcoin mining in the later days. It will have ended Bitcoin (albeit presumably for something better). People are not always right, that's how we got to where we are with pervasive central banking
The bolded is what I cannot comprehend.
To suggest such a thing would happen is essentially to suggest that a sidechain would be created that carries all of Bitcoin features and more. So essentially, what you are speculating is that a sidechain could be created that is so innovative it removes the need for the Bitcoin blockchain.
But it begs the question : what features could be so compelling?
Anonymity? My opinion is this should be user-defined?
Faster transactions? This comes at the cost of network security
If such a chain emerges that offers these features in a user-defined manner without any tradeoff, then why should we not welcome it with open arms?
There are thousands of reasons one might not welcome this.
One may not be able to trade out of one for the other.
There could be a different scBTC that one might prefer.
I am with you in that I agree that there are good financial innovations.
Do you also understand that there are dangerously bad ones too?
Do you also understand that very often people will choose these dangerously bad ones over the good ones, and that sometimes they do not become so dangerously bad until enough people welcome them with open arms?
Perhaps this is the fundamental point of disagreement?
There are so many different things in the SC bucket that anyone who thinks that no caution is needed is not thinking very hard.
It is akin to saying "we have invented derivatives, yeah baby".
It is a fintech innovation. Arguably a very good one, but people have different opinions on that. It has also created risks that were not managed.
scBTC is similar in this way in that it
necessarily increases the complexity risks systemically.
It may be worth while. This will depend on the people and how the technologies are implemented and used, don't you think?