yeah, sorry i'm not so clear. but in the scenario where a SC advertises a bogus innovation, the whale can pump BTC thru the 2wp, which is acting like a risk free put (if the SC fails, he can get this BTC back as advertised). the mere appearance of large #scBTC on the SC may cause a price rise originating on the SC which then drags up the price of BTC as well in arb. if he can sustain this then he could sell of scBTC on an exchange for profit (the dump).
If someone buys SCcoin and the SC fails, they don't get it back. (unless they do, in some weird scenario? i'm pretty sure that by default that coin would be permanently lost). I don't think there's any risk free put (it seems more like a call that you're thinking of - unlimited upside, no downside) here.
maybe. but i'm just going along with what's being advertised here. a well vetted, tested SC thru a federated system that is then brought online as a Bitcoin linked SC is "unlikely" to fail. given that, the 2wp is acting like a risk free put. maybe a call is a better term, i don't know. but then, my question about manipulation still stands unanswered. to assume a stable 1:1 price relationship of BTC to scBTC seems naive i think. there's always volatility and we see signif disparities btwn exchanges today that fluctuate sometimes wildly.
in the case of a SC with a true innovation, like faster tx times, it seems to me with time, all tx's would be incented to move to the SC as the block rewards diminish on the MC, depriving BTC miners of badly needed revenue. yes, MM is a possiblity to harvest those SC fees but lots of miners nowadays are losing money. they might be more than willing to primarily direct mine a SC if they can scoop up large tx fees (assuming of course MM is only a % of the BTC hashrate).
Transactions moving to a sidechain doesn't deprive BTC miners of their primary source of revenue; I guess you're already in this paragraph talking about far future when block reward is insignificant. So, fold into the below.
in 2140 when all block rewards are gone and the MC and SC (with its innovation) only mine tx fees, which chain would you rather be on? if you say that MC core dev will upgrade Bitcoin before that, what metrics will they use before they feel pressure or panic by a SC beginning to take over?
I'm not sure we need to be analysing what happens so far into the future. But indeed if there are no longer mining rewards, then the 'classic' blockchain is no longer special. It's just one of many. But this is so far away from where we are today it seems pointless analysing it.
true, it's into the future. but how far? there will be a transition point and if a risk free put (on BTC) exists today, why not move a major portion of your BTC to the SC today and leave it there?