Quote from: BldSwtTrs on November 14, 2014, 04:53:19 PM

Quote from: cypherdoc on November 14, 2014, 04:38:54 PM

Quote from: _mr_e on November 14, 2014, 04:29:33 PM

Quote from: cypherdoc on November 14, 2014, 04:14:07 PM

the basis of my argument is that the BTC unit cannot be separated from its blockchain (mainchain) w/o breaking Bitcoin as Money. imo, sidechains allow this and if you read their whitepaper, their core assumption is that they they can be separated.

Blockstream registered as a for-profit entity earlier this year and they have $15M investment. their biz model is constructing SC's for other entities, namely corporations, banks, gvts, anyone willing to pay for the tech. in essence, they are now in the exact same position as Mastercoin, Bitshares, CP in terms of competing to mold Bitcoin into profitability for themselves.

their business model is dependent on inserting a change into the source code called a SPV proof. this would allow BTC to flow off the highly secure Bitcoin blockchain ledger into these SC businesses where sidechain ledgers rules will be determined however the business wants and will be inherently less secure as they will not be merge mined or even directly mined. they will require trust and will ensure security most likely by signing off on blocks as they are constructed with their own signing keys.

there will be thousand of entities who will bolt themselves onto Bitcoin via these SPV proofs. this will in effect allow a siphoning of value, BTC units, out of Bitcoin itself. how will Bitcoin miners make their required income from tx fees if all these BTC have moved offchain to sidechains? how will Bitcoin maintain its monetary function if all these BTC have moved to sidechains and have been converted to all manner of speculative assets?

Blockstream has every incentive to encourage this siphoning process. as a for profit beholden to investors, not only do they have an incentive, they have an obligation.

If bitcoin can easily just be moved into these sidechain then won't they still have the exact same value as before? Lets say 1 btc = 100 scBtc. When miners are rewarded 1 btc, it'll always been worth at least whatever 100 scBtc is worth because it could just be easily moved to that chain at any time? So I don't understand how value itself would be siphoned from bitcoin since you could easily use the bitcoin to buy value from any chain you wish?

by breaking the link back to the MC, you've broken Bitcoin's Sound Money principles. these scBTC you're talking about will exist on inherently less secure SC entities whose ledger integrity will not be guaranteed as they will not be mined by independent, distributed, third party mining auditors. these SC entities will allow conversion of scBTC to all manner of speculative assets like shares, bonds, contracts, derivatives of all types which will be traded on exchanges. their value will fluctuate wildly and there will be winners and losers. mostly losers, i would guess. but those assets will not be the Bitcoin Money as we know it. they will be transformed.

this transformation must be taken all the way back to its root cause; the SPV proof.

You are talking of a case where : market cap of [BTC pre Sidechain release] = market cap of [BTC chain + SC]
Then indeed value will flow from a secure chain to a less secure chain which will undermine the whole system.

But the purpose of SC is to create value, so we can expect that:
Market cap of [BTC chain + SC] > market cap of [BTC pre Sidechain release]
Where the delta of the total value doesn't come from a zero sum game between BTC and SC, but from a positive sum game where value is added because of new SC's features.

the question is, create value for who? and at what cost?

if the "stated" intentions of Blockstream is to create value for Bitcoin and not Blockstream, then they should restructure as a non-profit. or create SC's as a public service. b/c that's the other important point here: imo, Bitcoin has evolved to a point where it has become a public good. it is a form of Sound Money that cannot, in the slightest, be perceived to have any improprieties or self interested groups in control. that is, if we want nations and ppl of all strata to buy in. Blockstream for profit violates this.