Post
Topic
Board Speculation
Re: Gold collapsing. Bitcoin UP.
by
brg444
on 18/11/2014, 16:46:35 UTC
On one end of the spectrum, if a sidechain's 2-way peg can be severed at the whim of the sidechain devs, it would essentially be an altcoin and would presumably attract about as much investment as altcoins do (not a threat to Bitcoin).

At the other end of the spectrum, if it's mathematically impossible to sever the 2wp, then it is a true sidechain and the value seems to always remain with the Bitcoin ledger (not a threat to Bitcoin, at least not for this reason).
From the description of the SPV proof, to get out of the sidechain it seems like you need to be able to create transaction in the sidechain which burns some sidechain units.

If it's possible to block transactions in the sidechains, then it would be possible to prevent sidechain holders from cashing out into the main chain.

In that case I'd expect a lot of people to pretty wary of investing in sidechains, especially as a store of value. It seems like they should just be considered "fortified altcoins" in that case. For many altcoin proponents it may become THE way to launch altcoins, and it may provide a powerful boost, but it seems like it will take years without incident for people to gain enough confidence in the pegging system to rely on it as a store of value.

To be able to block transactions would require centralization of the tx verification process or corruption of the miners.

Considering the proposition of SPVP sidechains is to MM the more valuable sidechains on the same level as BTC it would mean a situation where a miner goes rogue and attack the network.

Some have argued MM might open an incentive to do so that does not exist with Bitcoin itself. In my opinion the economic incentive for miners to behave is still very much in place and discourages most attempts.