We've all looked forward to getting that new shiny upgrade of our operating systems or video games, etc.; however, this is not necessarily the right mentality for a decentralized system.
If we jump onto every update by the Core developers, then we've centralized the way Bitcoin works into the hands of those very developers, transforming them into the cabal that pulls the strings… and possibly for personal profit to the detriment of others…
Peter Todd, a long-time voice of both innovation and caution amongst us:
It'll be interesting to see how willing those Bitcoin Core maintainers now working at blockstream will be to merge in changes, like reducing/eliminating OP_RETURN, or getting rid of bare multisig, that happen to harm their competitors.
Of course, my advise to those competitors is to not depend on Bitcoin Core features that can be easily removed by the maintainers.
i think they are selling us out by breaking Bitcoin's Sound Money function via the SPVproof which breaks the link btwn the currency unit and the blockchain.
and:
think about it.
their plan involves separating the BTC currency unit from its secure blockchain then allowing those to be transformed into all sorts of speculative assets on a SC.
that destroys Bitcoins Sound Money function.
In other words, Bitcoin is stable because the coupling of BTC and the official blockchain creates an incentive to be good custodians of the official blockchain. The changes being proposed might dissolve that dynamic.
It seems from the article they've invested in changing core Bitcoin tech without a business plan or need to own any of the Bitcoin they're [supposedly] going to make more valuable either.
and:
SideChans change the mining incentives that protect the value on the Bitcoin blockchain, this has consequences not all are positive. I've only drawn attention to a fiew they shouldn't be overlooked.
and:
fore every risk there is a an up and a downside.
I'm pointing out that Side Chains aren't all upside.
there are 2 types of SideChains, those that work on top of the Bitcoin protocol these i consider innovative and healthy.
then there are those that require a change in the Bitcoin protocol to make them possible these i consider detrimental to Bitcoin as we know it.
The proposed change doesn't originate form the community, it comes from a for profit company BlockStream, who has now employed 2 out of the 5 developers with the ability to change the Bitcoin Source-code.
The upside is we can do more with Bitcoin. the Downside is this changes the mining incentives that create the security that makes Bitcoin possible.
some say its an improvment because miners will get new Bitcoin revenue from mining SideChains, but fore every risk there is a an up and a downside.
The downside is we know Bitcoin block rewards will drop exponentially, eventual miners will need the transaction fees for income (maybe in 6 years). if miners get transaction fees from Side Chains the incentives to protect bitcoin are diminished, they could earn BTC by mining Sidechaines while at the same time with the same hardware do a 51% attack on bitcoin. will they i dont know, could they yes, but only if this change is made.
and:
there are 2 types of SideChains. ones that happen on top of the protocol, these do not threaten Bitcoins incentive structure, they are good for the bitcoin ecosystem.
SideChains that are dependent on SPV proofs run on the Bitcoin protocol level are a real threat.
Miners rewards diminish over time, ultimately the only revenue for miners is from transaction fees. if those transaction fees are generated on faster or more private SideChains for any reason at all, Bitcoin provides less incentive to miners to secure it.
in the case we have successful SideChains, value can be sucked out of Bitcoin, you can always exchange back for your Bitcoin but the network will lose its value because it isn't the main network.
the developers know Bitcoin is the parent, and the SC is the child, but economic forces dont use the same rules as software.
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Another argument is; side chains that become more popular than the bitcoin blockchain apparently offer better functionality / value / whatever. As long as people can move coins from the bitcoin chain onto this new chain, there's no issue. You could see it as a migration path to a 'bitcoin 2.0' successor, where everyone can bring their existing coins along. Wouldn't that be something? :)
Edit: Here's an example. Let's say someone makes an Ethereum side chain that only uses Bitcoin instead of Ether as its coin. It would take some time to harden the Ethereum codebase, but let's assume that it's rock solid. Ethereum offers a lot more functionality than the bitcoin protocol, so I'd personally have no problem with it if that chain became more popular than the bitcoin main chain, to the point that bitcoin could even die off completely. Everyone can move over with the click of a button. No pre mining, no coin auction, just a peg from Bitcoin to the new Side-Ethereum. The main bitcoin chain would probably stay alive for quite some time, since the economic incentive of the miners is the remaining bitcoins and the potential funds that still want to move to the Ethereum side chain. Everybody wins.
However, what if it's not Ethereum? What if it's GovernmentCoin, embracing, extending, and then extinguishing Bitcoin? That's the possible downside, especially when deep, centralized pockets are involved.
Part of keeping a system decentralized is to be wary of centralized decision making. Be wary of the ones who pull the strings. If what you have works right now, then don't bother upgrading.
Submitted November 18, 2014 at 07:22PM by bettercoin http://ift.tt/1uLOfO5