[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.