I'm still wondering why things like Counterparty don't mess up the mining incentives. If a huge amount of stock value is riding on Bitcoin doesn't that potentially make an attack more attractive than the miners can get paid to defend against (since they're only getting paid based on the bitcoin price, rather than all the stock value)?
Also, I can see that SCs could mean miners don't get paid enough in tx fees in the future, but couldn't the same problem arise from off-chain transaction mechanisms in general?
I adressed this notion here, not sure if you saw it.
From my point of view. SPVP Sidechains that enable merged-mining are in fact bringing balance to this issue of transaction fees emigrating to different, off-chain schemes.
So far the only option to accomodate transactions types that are not implementable in the mainchain had been these off-chain schemes that effectively present this very danger of moving transactions off-chain and out of reach of potentially underfunded miners.
SPVP Sidechains will not negate this aspect but they introduce an alternative for the market. The likely outcome is that any chain that gain significant adoption from the market and therefore require the "ultimate" security model will be picked up by miners and that way these transactions will not "escape" them.
This is why I argue that lost incentives to off-chain schemes might be potentially more dangerous than a change to the incentive model (Adrian's concern)
I tend to think Bitcoin will eventually be forced to change its method of paying miners (either through increased inflation or higher tx fees), as detailed in
https://bitcointalk.org/index.php?topic=68655.msg9458351#msg9458351Since that's far in the future, though, I'm not in a rush. The nature of sounding the alarm about "danger on the horizon" is that sometimes the alarm is itself the greater source of danger. I worry that the current popularity of sidechains is partly a reaction to the price decline and fears about altcoins, scalability, etc. If we worry so much about such things and then mess with the core protocol, the cure might be worse than the disease, especially if the disease was really just a phantom. This dynamic goes on in many aspects of Bitcoin, which may be why the devs are usually pretty conservative. However, that conservatism itself has been seen as a danger, so...