as far as altcoins and SC's are concerned, let me come at this question from another direction.
right now, we have 538 altcoins in existence of varying kinds with diff security models. what are SC's going to do to make all of them go away?
brg444 has said "someone" is going to reduce them to utility SC's w/o the altcoin but only with the "innovation" and that will be what causes their destruction. really? who's going to waste their time doing this for 538 altchains? who's going to dev a utility chain for Doge inflation? who's going to dev a utility chain for Freicoin demurrage? who is going to dev a chain for any one of the 538 altcoins most of which have weird monetary models? let alone mine them to make them secure? the answer is NO ONE. it's b/c it's too much work and there is no upside to doing so for a Bitcoin minded dev precisely b/c there is no altcoin! ppl are supporting these altcoins precisely b/c they have speculative upside and most of the time don't involve the sound money properties of Bitcoin. they will continue to exist as they are and is why you're not seeing a selloff since the whitepaper. SC's do nothing to altcoins. which removes a major argument for their adoption.
now, let' take it one step further. if we now allow all of them to bolt themselves onto the Bitcoin MC via the 2wp with 1:1, i ask again, exactly what has changed and what is going to make all these go away? first off, not only will they not go away but now i think they get stronger. it is fundamentally for the worse for Bitcoin. i suggest that these altcoin devs are jumping with joy at the opportunity to get into the Bitcoin house and siphon away valuable BTC. let's use Dogecoin as an example.
let me very clear about the mechanism and my assumptions here so brg444 won't distort them yet again. i'm suggesting that there will be 2 separate coins riding on this new bolted on Doge, the original Dogecoin and the new scBTC created from the 2wp in a 1:1. there will be a Doge blockchain that continues to create Doge from its own block rewards, which is inflationary as we know. there will be tx fees generated by mining tx fees from both scBTC and Doge. in this scenario, i'm suggesting the 2wp will only more easily facilitate the movement of BTC-->scBTC-->Doge b/c of the risk free put along with the logarithmic increase in advertising claims that Doge will be able to use as we've seen with TC. the exact opposite of what SC devs expect consider that Doge already has its own security. it already has it's own brand. it already has its own attraction. it already has its own followers. and it already has its own philosophy which happens to be different from Bitcoin. it can advertise that philosophy with logarithmic intensity to those ordinary Bitcoiners (who only care to make a fast buck and may not care about the inflation) just like we've already seen happen with TC.
furthermore, if successful at siphoning off BTC, Bitcoin miners might want to follow via direct mining as well as MM as they now have the revenue from Doge block rewards, and tx fees from both Doge and scBTC.
you see, the problem with brg444 and the SC proponents is that they think everyone thinks like Bitcoiners do. i got news for you, they don't. that is what the whole speculative altcoin movement is about and SC's do nothing to change that. in fact, it might make it much worse for us by letting those guys into the house next to our core engine business and sucking out valuable BTC.
I have only 1 simple question. What can we do to prevent this ? (I mean, how
NOT validating SPV proof can save us from this disaster)
you've stated before we may already have SideChains with 1:1 2wp's. If they exist the way they do it is by using Multisig and distributing N of M signatures in a secure decentralized and obfuscated way even if they use Merger Mining, this approach is risk free to Bitcoins future and the correct approach in my opinion. The disadvantage is you have to go through a centralized clearing house, or trusted decentralized servers, this could be done something much like Bitshare's Delegates or secure OT servers. (the risk of loosing your BTC where the code is honest and open is equally eliminated but the market determines of the value of the SideChain not the BTC Peg. it may always be 1:1 but if it is not its not an issue, it is a market failure if it unwinds not a Bitcoin protocol failure.)
The above solutions give us decentralized exchanges, even corporate currencies, and secure user protected and untouchable BTC storage on nefarious sites like SR, the advantage are huge, and the risk to the user losing there BTC is reduced, to the actual fraud in the business interaction, (same as with SC) which will be mitigated over time with social reputation of honest players.
Its only when there is a decentralized protocol solution that allows bitcoin value to move onto other chains that I see the issues that have been presented arising.
What can we do to prevent this? seems simple to me, don't make the proposed Blockstream protocol change, lets use free market solutions.