Quote from: brg444 on November 10, 2014, 04:20:47 AM

Quote from: NewLiberty on November 10, 2014, 03:48:52 AM

I'm not sure I explained the mechanism well enough then.
The pump is a BTC pump. The scBTC moves because of the "peg".

Demand for any particular scBTC doesn't matter, all that matters is that there are some scBTC with some demand (if there aren't then SC are pretty much a failure). The rest is simple economics and human greed, so long as there is this "peg".

There is money to be made simply from SPVing coins, and then selling them at exchange to anyone that wants them but does not want to wait for SPV confirmations (which will be more than the exchange will require).

It gets compounded as increasingly more BTC move into various scBTC and liquidity diminishes as price rises.

That doesn't make any sense.

There is only so much demand for scBTC. This demand does not change whether people get them through exchange or SPVing.

For more BTC to move into various scBTC there needs to be more demand for them. Simple economics.

People are not gonna buy scBTC on exchanges for the hell of it. To better illustrate :

scBTC-fan wants to get 5 scBTC.

Either he buys your 5 scBTC directly through an exchange or he buys BTC and locks them in the chain with SPV.

No matter the method used only 5 BTC are transferred to the sidechain. No more. Your intermediate sale of scBTC through exchange does not increase the demand. There is not more users willing to buy through exchange than there are willing to use the coin through regular BTC > scBTC mechanism.

The amount of coins sitting on a sidechain is proportionate to the amount of users willing to use it. Your "pump & dump" scheme, if we can even call it that, has no incidence on this demand.

The demand is supported by the "peg".
There is a profitable trade, people will buy.
If BTC is rising faster than the scBTC, do you think people will not buy the scBTC?
It doesn't matter much what the feature the side chain adds, or whether there is demand for the feature. The feature matters less than the prices.

The losers will be the folks waiting on confirmations when it unwinds.... or if it doesn't unwind, BTC holders lose liquidity (which could cause the pump to go higher than it otherwise might).