Solutions do not need to be complicated or elegant - they simply just need to solve the problem.
Sidechain Elements: Open source code and developer sidechains for Bitcoin
21–25 of 25 posts
Re: Sidechain Elements: Open source code and developer sidechains for Bitcoin
#22I understand the people in the Bitcoin community are trying to prepare for the future, but is there any evidence at all that Bitcoin transactions will grow to a point where the blockchain can't handle them and sidechains will actually be necessary?
Sidechains are about more than simply allowing extra capacity on the bitcoin network. They fundamentally enable the pace of innovation to increase in the cryptocurrency space.
In the past, if someone wanted to improve bitcoin technically (for a trivial example, let's say improving block confirmation times), they had to fork bitcoin, and release an "altcoin" (thus creating an entirely separate currency at the same time). This inevitably led to many bystanders speculating on the altcoins - getting distracted from the technical improvements, and focusing on whether it was a good investment or not. In the past, it was not possible to separate the bitcoin network from the currency.
Sidechains allow us to create entire new blockchain networks, which use the bitcoin currency natively. This means that I can now test changes to the bitcoin protocol, and allow people to move their existing bitcoin (currency) on and off my new network. For a popular sidechain, hosted wallets could even transparently support sending and receiving coins on both networks. This is a major step forward for cryptocurrency, because it means we no longer need every innovation to have 100% consensus on the main bitcoin blockchain - we can simply try out new ideas on sidechains.
Longer term, I can see sidechains allowing us to even migrate to a Bitcoin 2.0 protocol (think IPv6) - once a new standard is formalized, people can begin using the new network in parallel, and eventually everyone will migrate to the new "main" network.
Re: Sidechain Elements: Open source code and developer sidechains for Bitcoin
#23As I understand sidechains there's a complicated proof mechanism that gets set up for transfer of bitcoin 'value tokens' between the bitcoin blockchain and alternative blockchains without creating any additional currency units , and a fall back to a much simpler exchange mechanism for actual practical day to day exchange. But the whole thing about not creating additional currency units actually seems fairly arbitrary…
Neat proposal. It's worth mentioning that it can't be implemented in the current bitcoin implementation, yet the alpha sidechain introduced here happens to add exactly the bits it requires to work, namely time locked transactions and a more plausible malleability fix.
Which means if you find/build another altcoin with similar capabilities, you can start exchanging testnet coins with those altcoins using the very approach you describe today.
I don't believe that's a happy accident, but rather one of those core reasons for getting sidechains off the ground, as it provides a clear path toward finally building all the insane stuff people have been dreaming about for years.
Re: Sidechain Elements: Open source code and developer sidechains for Bitcoin
#24Earlier quoted context omitted.
>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. L…
Any degree of centralization leaves the network open to attack, whether by technical, regulatory, or financial means. Ripple Labs recently got hit with a hefty fine from FinCEN - http://www.coindesk.com/fincen-fines-ripple-labs-700000-bank...
How would a decentralized method of preventing double-spending have protected them from that fine?
It seems like the only way to protect yourself from this would be to have no money in the first place, or to have no fixed address.
Re: Sidechain Elements: Open source code and developer sidechains for Bitcoin
#25As I understand sidechains there's a complicated proof mechanism that gets set up for transfer of bitcoin 'value tokens' between the bitcoin blockchain and alternative blockchains without creating any additional currency units , and a fall back to a much simpler exchange mechanism for actual practical day to day exchange. But the whole thing about not creating additional currency units actually seems fairly arbitrary…
Neat proposal. It's worth mentioning that it can't be implemented in the current bitcoin implementation, yet the alpha sidechain introduced here happens to add exactly the bits it requires to work, namely time locked transactions and a more plausible malleability fix. Which means if you find/build another altcoin with similar capabilities, you can start exchanging testnet coins with those altcoins using the very appr…
Ok, yes that sounds pretty cool.
It feels like there are much simpler ways to support pay on reveal secret directly on the bitcoin blockchain, if this is accepted as an important goal (e.g. with explicit conditional redemption conditions based on spending transaction blockcount).
But I guess a more general solution for time locking and malleability can give you other stuff as well (e.g. off chain payment microchannels).