Quote from: smooth on December 03, 2014, 01:47:12 AM

Quote from: rocks on December 03, 2014, 01:41:43 AM

Quote from: smooth on December 03, 2014, 01:30:45 AM

Quote from: rocks on December 03, 2014, 12:59:56 AM

It's arguable that after the Brenton Woods agreement that the world did in fact have a single global currency. All other currencies were fixed to the dollar which in turn was pegged to gold (remember foreign central banks could redeem dollars for a fixed quantity of gold even if individuals could not).

Pegs have always been fragile and failed, and that is exactly what happened.

That is an argument on why any single system controlled by people (whether a few or many) will almost always fail, not that we didn't have a single global currency for a shortish time period.

What I'm arguing is that separate "pegged" currencies are not really one currency after all (and can't be). Relevance to side chains.

OK got it, been trying to avoid SC.

Side chains are not really pegs though and I think there's been some confusion on that. I think side chains can best be thought of as a vault with some known quantity of BTC allocated to that vault. For example side chain A has 400 BTC allocated to it while side chain B has 4000 BTC allocated to it. SC A can do whatever it wants, but it only has value of 400 BTC, similarly SC B can do whatever it wants, but it can only have value of 4000 BTC.

Compare this to gold today. Today we are told the FED's vault has x,xxx tons of gold, JP Morgan's vault has y,yyy tons of gold and Russia has z,zzz tons of gold in their vault. But there is no method at all to verify this. It is up to the vault's word, and even if the vault publishes accurate numbers it's possible they are mistaken and unknowingly have tungsten bars.

This is why time and time again pegs to gold (paper products, etc) have failed over and over again. There is no method to verify in real time how the peg is doing.

Now compare this to side chains. With side chains you can compute in any given second EXACTLY has much BTC each side chain has allocated to it. You can always know the quantities of each vault.

Now side chains can if they want "peg" their scBTC to their BTC allocated to them, or they can not. It is up to the function of that SC and there are no technology constraints. Personally I think economic factors (not technical) will cause people to only use SC's that maintain a peg otherwise it will be very visible that you are being devalued in terms of BTC.