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    Author Topic: Gold collapsing. Bitcoin UP.  (Read 2032328 times)
    brg444
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    Bitcoin replaces central, not commercial, banks


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    November 18, 2014, 11:59:42 PM
     #17461

    ...
    With altcoins we have that fear.  But with Sidechains we don't even have to merge popular functions back into the MC, because they use a token scBTC that is pegged to BTC. So if the sidechain becomes popular, it creates demand for BTC to be locked and represented by scBTC which drives up the price of BTC.  
    ...


    Maybe I missed discussion of it, but a few thousand pages ago I noted that the bolded part above is not necessarily the case since the exchange rate can be defined by "any deterministic function". To me, that's most of the problem. I used this example before, but say a fantastic sidechain is developed with a 1:1000 exchange rate, and a limit of 100M sidechain coins. Once 100,000 BTC move over, that's it. Demand for the sidecoin no longer feeds back into demand for bitcoin because it's de-facto no longer possible to get sidecoin by locking bitcoin. Am I missing something here?

    Assuming I'm not missing anything, then all pegs which are not unlimited 1:1 pegs basically just define separate alt-coins, but alt-coins which can bootstrap off of bitcoin.

    It's possible, but there is no point to it because the majority of people are looking to preserve the value of their investment.

    For this reason, I will create fantastic sidechain 2.0 but without a cap and a 1:1 exchange rate and yours will be made irrelevant. No one is looking to inflate the value of their wealth.

    "I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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