Quote from: smooth on December 31, 2014, 01:02:58 AM

Quote from: adam3us on December 31, 2014, 12:30:56 AM

Also I dont think even statis vs change captures the situation. If you like stasis, keep your coins on bitcoin main; if others like cool features they can use them on chains that support them. Why is this a conflict?

I think the conflict is that if one views bitcoin-plus-sidechains as being an economic system, then "just don't use it" is not a valid response. Events in one part of the system may have consequences (including unforeseen consequences) in another part of the system.

[...] sort of bitcoin-backed-coin model [federated peg] that involves some sort of trusted intermediary/intermediaries (what the paper calls the federated model). Nothing prevents someone from making a bitcoin-backed-altcoin [...] Putting aside the rather large issue of backer trust, this is equivalent to a side chain.

I can see the argument. But wouldnt that have effects on main chain also? Wouldnt it be more prone to technical and policy / moral hazard failure?

You can view all the off-chain transactions (must be > 90% offchain) that are based on trust, governance and audit as also part of the economic system. Prime example Mtgox. Dont get much bigger than that $500m loss.

I think the economic system is at greater risk the longer this offchain model persists. One of the motivations of some of the people interested in sidechains is to increase transaction volume, smart-contract capabilities to have the tools to migrate the security critical parts of the trust & governance aspects onto the chain - ie replace that trust and governance (which is prone to human failure) with smart-contracts (which are less so).

Its also kind of embarrassing and stupid given that the point of bitcoin smart-contracts is to avoid that risk! Sort of because of tx volume, missing a few features and largely transaction volume limits, reinventing the mistakes of the past centuries early banking governance failures, with young people with no banking experience running $500m exchanges with basically no separation of duty and probably dumb security also. Thats also a bad idea for inviting regulation - regulators are trying to protect users from losing money.

You can directly see that people are running scared of losing their money in anything that they are trusting with bitcoin. Eg delays for wire transfers to clear because they dont want to leave money on exchanges with uncertain governance and security competence. Thats not good for bitcoin either.

I think sidechains are a net win if its a choice between offchain or on sidechain. Even if some people are focussed on slow velocity investment, the people that do want them, those transactions will go somewhere and offchain will be it until someone works to solve it.

Feel free to help also. We're doing plumbing at this stage. Early adopters could see uptake as people move to on(side)chain offerings in preference to offchain.

Adam