[fryguy]

I don't necessarily agree with the conclusion at the end. Supposing that sidechains can be mined simultaneously with the bitcoin at no additional cost, and that there is a fixed bitcoin <-> sidecoin conversion (not market based) built in to the protocol, bitcoin would never completely lose its value, because it could be converted to sidecoin at the same rate it would be before. The market price would be fixed to some small price differential below the price of the amount of sidecoin it could be converted to.

The thing about bitcoin is there are a lot of things done "wrong" with it, that are impossible to retrofit into it. However, the network effect means that it's also impossible to switch to another altcoin without completely devaluing bitcoin, which would mean that the altcoin would be devalued because it could happen to the altcoin as well. I agree with that part. However, something that's pinned to the value of bitcoin like what I've read of the sidechain proposal would be a way to do that.

[TylerE]

> Supposing that sidechains can be mined simultaneously with the bitcoin at no additional cost

Which is obviously not true. Extra storage and bandwidth at the very least.

[fryguy]

Hash rate is independent from bandwidth/storage. Assuming you can do N hashes/s, you can still do N hashes/s with merged mining of multiple sidecoins.

Also, presumably any bandwidth incurred by a sidecoin would have been incurred by bitcoin if the sidecoin didn't exist, so total bandwidth/storage would be similar.

[joe_coin]

Is that really what Sidechains are aiming for? If so I need to go back and reread their paper more carefully.

What I'm hearing you describe is that the token used by a Sidechain is not one iota different from any other Bitcoin, except perhaps that its latest output script includes some new weird feature we haven't seen yet. It's like my sending you 1.0 Bitcoin through a vanilla BTC transaction and you telling me that I now possess 10e8 Satoshis, which are different that Bitcoin but always redeemable for Bitcoin pegged at that rate.

If tokens being used by Sidechains are permanently pegged to Bitcoin, and we assume merged mining, I withdraw my objection to the concept, and would instead direct my criticism toward how the concept was presented and its seeming suggestion that Sidechain tokens might one day detach and rise in value while Bitcoins potentially fall to zero.

[fryguy]

The main purpose of adding sidechain support to bitcoin is to allow coins to be "burned" on sidechains in order to get them back on the bitcoin blockchain. It's already possible to have unidirectional burning from bitcoin to other chains, but not bi-directional. There are lots of things to get right though which is why it's taking a long time to do.

It's not necessarily the case that it's permanently pegged to an exact bitcoin amount. Perhaps they way that miners of the sidechain are rewarded is by inflation/devaluing how much bitcoin the sidecoin can be burned for. The point is though, it's not market effects that are causing it.