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Sidechain Elements: Open source code and developer sidechains for Bitcoin

blockstream.com

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Re: Sidechain Elements: Open source code and developer sidechains for Bitcoin

#3

Post by Animats »

"2-way peg"

Moving coins from the side chain back to the main chain is the hard part. The white paper says you "use the proof to unlock a number of previously-locked outputs with equal denomination on the parent chain." You have to lock up N bitcoins to create N side chain coins, but those form part of a locked pool which can later be used to redeem sidechain coins. It's conceptually elegant, but the process is complex and delicate. Lots of things can go wrong, and it needs "challenge periods" of about a day during which things get sorted out.

"Security for the blockchain is provided by a set of predefined functionaries"

Uh oh. Remember Paycoin, with its "Prime Controllers" and "guaranteed minimum value". That didn't end well. The whole point of all this cryptographic machinery is supposed to be to eliminate the need to trust some central party or parties. This sidechain scheme doesn't do that.

Re: Sidechain Elements: Open source code and developer sidechains for Bitcoin

#5

Post by nadaviv »

Animats wrote: post #3

"2-way peg" Moving coins from the side chain back to the main chain is the hard part. The white paper says you "use the proof to unlock a number of previously-locked outputs with equal denomination on the parent chain." You have to lock up N bitcoins to create N side chain coins, but those form part of a locked pool which can later be used to redeem sidechain coins. It's conceptually elegant, but the process is compl…

The federated model is a temporary solution, as a workaround due to the lack of native support in Bitcoin Testnet. Once the Bitcoin network itself can validate the SPV proofs from the sidechain, this model will be replaced with a completely decentralized one.

Re: Sidechain Elements: Open source code and developer sidechains for Bitcoin

#8

Post by Animats »

nadaviv wrote: post #5
Animats wrote: post #3

"2-way peg" Moving coins from the side chain back to the main chain is the hard part. The white paper says you "use the proof to unlock a number of previously-locked outputs with equal denomination on the parent chain." You have to lock up N bitcoins to create N side chain coins, but those form part of a locked pool which can later be used to redeem sidechain coins. It's conceptually elegant, but the process is compl…

The federated model is a temporary solution, as a workaround due to the lack of native support in Bitcoin Testnet. Once the Bitcoin network itself can validate the SPV proofs from the sidechain, this model will be replaced with a completely decentralized one.

This thing has a lot of moving parts.

Re: Sidechain Elements: Open source code and developer sidechains for Bitcoin

#9

Post by nickodell »

Animats wrote: post #3

"2-way peg" Moving coins from the side chain back to the main chain is the hard part. The white paper says you "use the proof to unlock a number of previously-locked outputs with equal denomination on the parent chain." You have to lock up N bitcoins to create N side chain coins, but those form part of a locked pool which can later be used to redeem sidechain coins. It's conceptually elegant, but the process is compl…

>Uh oh. Remember Paycoin, with its "Prime Controllers" and "guaranteed minimum value". That didn't end well. The whole point of all this cryptographic machinery is supposed to be to eliminate the need to trust some central party or parties.

Personally, I'd compare this to Ripple; semi-centralized transaction timestamping seems to work ok for them.

>It's conceptually elegant, but the process is complex and delicate. Lots of things can go wrong, and it needs "challenge periods" of about a day during which things get sorted out.

I agree.

Re: Sidechain Elements: Open source code and developer sidechains for Bitcoin

#10

Post by nickodell »

nadaviv wrote: post #5
Animats wrote: post #3

"2-way peg" Moving coins from the side chain back to the main chain is the hard part. The white paper says you "use the proof to unlock a number of previously-locked outputs with equal denomination on the parent chain." You have to lock up N bitcoins to create N side chain coins, but those form part of a locked pool which can later be used to redeem sidechain coins. It's conceptually elegant, but the process is compl…

The federated model is a temporary solution, as a workaround due to the lack of native support in Bitcoin Testnet. Once the Bitcoin network itself can validate the SPV proofs from the sidechain, this model will be replaced with a completely decentralized one.

What's the incentive for people to merge mine this? Namecoin issues its own currency, and it only has a third of the hashrate of Bitcoin. If this sidechain follows that example, it seems like it will be much easier to mount 51% attacks and forge proofs.
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