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.
mostly all of your arguments are shown to be irrelevant if we consider that sidechains can be implemented today without the SPV proof.
bitcoins being converted to represent assets is not a new proposition and something that will exist sidechain or not.
no. your still not getting it, all the arguments are shown to be irrelevant if we consider that sidechains can be implemented today without the SPV proof. There is no point in arguing those.
It's the idea of decentralized SPV proofs that has proved to be a theoretical issue if one was to move a large percent of value into those chains. This is the problem, creating SC with decentralized SPV proofs this changes the instructive that has given Bitcoin its value. this is the issue.
Calling a federated 1:1 peg using m-of-n bitcoin addresses a SC, which can be done today the same thing as a SC that is decentralized and employes Merged Mining to proses SPV proofs with federated 1:1 peg is muddling the water, they are two separate technologies, one is available and fair, the other is a proposed protocol change that can upset the incentives that make Bitcoin money.