Quote from: Peter R on November 17, 2014, 08:42:59 PM

Quote from: thezerg on November 17, 2014, 08:23:57 PM

Quote from: Peter R on November 17, 2014, 06:33:35 PM

This is a very interesting theoretical question: "where is the value stored for a sidechain?"

blah blah blah

Wow, you can describe all that in one line: The price change will be proportional to the flow derivative.

In other words, if BTC was moving (and would have continued to move) into the sidechain, the SC price when "broken" will rise. If BTC is moving out of the sidechain the price will fall.

What you said above doesn't give any value to convertibility. Like NewLiberty said, the value for scBTC is:

value = convertibility + utility/network effect.

If you permanently break the peg (convertibility), the value of scBTC will immediately drop (at least in Cases 1 and 2), regardless of the direction of the flow.

I feel convertibility (2wp works) same as if you did not break ECDSA then convertibility works. (sorry, I'm not natural speaker)