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'Sidechains': Miracle Workers or Misplaced Satoshis?

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Writer and technologist Eric Sammons is welcomed back to The Daily Decrypt to discuss the concept of "sidechains" and whether -- in practice -- their use would be preferable to alternatives -- 'alt'ernatives like 'alt'-coins. Check out our new channel! http://youtube.com/dashorg Connect with us! [website] http://TheDailyDecrypt.com [tweets] http://Twitter.com/TheDailyDecrypt [facebook] http://Facebook.com/TheDailyDecrypt [RSS feed]: http://mix.chimpfeedr.com/5b92e-The-Daily-Decrypt [subreddit]: http://reddit.com/r/TheDailyDecrypt Wanna sponsor a show? http://TheDailyDecrypt.com/Sponsorship Sponsor: Bitshares: http://bitshares.org Sponsored Shout-Out: ChangeTip: http://changetip.com Get beta invite: http://changetip.com/wallet Show links: 'Unchained' article by Sammons: https://medium.com/@EricRSammons/unchained-altcoins-as-free-market-bitcoin-sidechains-3432d9d88ed6 Sammons' homepage: http://ericsammons.com Sidechains whitepaper: https://www.blockstream.com/sidechains.pdf Music: 'Barabass & The Happy Few' by Luca Rossi: https://www.youtube.com/watch?v=F_6lOs1GDYs Contact us: http://TheDailyDecrypt.com/Contact Tip us! See our addresses for Bitcoin, BitcoinDark, Bitshares, Dash, Dogecoin, Ethereum, Litecoin, Monero, Neucoin, Nubits, Nxt, Peercoin & more at http://TheDailyDecrypt.com/Tip-Us ProTip ready: 16YmPfNXChVXcuut8opkHfmfYw4mPNFD6B
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Text Comments (67)
Hans Jürgen Vetter (6 months ago)
Funny ... he believes that internet-money has to become stable in terms of price ... but users should jump bit/alt-coins in order to find the best innovations of future internet-money ... THAT WILL NOT WORK ... at least not without big price swings ...
Tao Jones (7 months ago)
Dash and Bitcoin Cash?
alejandro navedo (1 year ago)
https://bitminer.io/6156 if you want genarated bitcoins this is you oportuniti and you only do is download app
calholli (2 years ago)
14:00 I understand what you mean to say, but if you spike the price of food and water in an emergency.. there are still "shortages".. the only difference is only those with enough wealth will get the food and the poor all die. on another note, I believe that anything that is tied to something that can be created out of thin air then there will always be price fixing, only it will be done by volume instead. this includes Bitcoin, but especially gold and silver... all these things are tied to the dollar, so that means that the banks can throw lots of cash dollars at it and fix the price where ever they want to.. based on the fact that the federal reserve can just print as much as it wants and is free to distribute it as they wish. I'm no sure on how to get around this
Dan Gershony (2 years ago)
I really take on the idea of altcoins being "the" side chains. What are altcoins if not a free market evolved side chains to bitcoin.
HD Failure (2 years ago)
The truth is, all alt coins have their value stacked against the big brother, alt coin its a form of controlled coin against the main coin. You can never have an alt coin backed against itself...
just_me (2 years ago)
What can I say Amanda? You're my FAVE! I feel so informed watching your show!
And I'm An Anarchist (2 years ago)
With regard to volatility, which is better? 1. A seemingly stable fiat dollar that has lost 97%+ of its value or... 2. An alternative that is volatile between say $2500 and $5,000?
And I'm An Anarchist (2 years ago)
Those "entitled" people who focus too much on Bitcoin will miss out on the enormous gains to be had amongst the alts.
And I'm An Anarchist (2 years ago)
Did you turn on the "Hey, I"m Amanda the Ghost" filter?
And I'm An Anarchist (2 years ago)
noodlesdoctor (2 years ago)
Amanda coin is priceless!
Micky G (2 years ago)
Bitcoin is simply a protocol. Http is still here.
Jeff Anthony (2 years ago)
+Micky G Both will be as long as we have tcp/ip!
Chris Millington (2 years ago)
I guess we know from the FOREX market that pegs eventually fail and the price goes to where the market wants it to be. Recent examples being the CHF and Reminbi
Will Darling (2 years ago)
I do so love a b j. Such great everything!
Altchains can have both bitcoin on it and a native alt token. you don't need to have bitcoin exclusively. Price fixing is the wrong term for the context you're using it in.
halfasheep (2 years ago)
Excellent shows Amanda & crew. Thanks Eric for your POV.
slhines7 (2 years ago)
This intro of yours reminded me of Ms. Count Chocula/Dracula or some character like that:)
mughat (2 years ago)
You can have fees on transactions in a side chain. The fee price will reflect the value of the particular side chain.
moonman9j9 (2 years ago)
Also, do more on Ethereum! I think it's the most interesting of all the blockchain entities.
moonman9j9 (2 years ago)
I love you Amanda. <3
Zypher77777 (2 years ago)
Why is it imperative that side chains be tied to bitcoin in terms of value?
moonman9j9 (2 years ago)
+Zypher77777 If not they're literally just altcoins and typically useless.
ausPPC (2 years ago)
re: the podcast... clipconverter.cc has an mp3 download option.
ausPPC (2 years ago)
That 40 to 50 thousand VISA transactions per second is an interesting statistic particularly as, at a guess, less than half the world's population even has a VISA card.
Avatar X (2 years ago)
It is an inaccurate statement to even suggest the purpose of Sidechains is part of a way to address transactional scalability.  Lightning Network is what is being proposed for that.
mungojelly (3 months ago)
Ha you wrote this two years ago, when the Lightning Network was just eighteen months away, how did that work out? ;)
Michael Wiesend (2 years ago)
Amanda, Andreas Antonopoulos explained it like this. TCPIP is resisting it's successor. They can't upgrade it. It won because it was first and good enough. Could you have Andreas back on to elaborate? Thanks.
Eric Martindale (2 years ago)
It's great to see you covering this, Amanda! I have a few comments for your guest – for clarity, I work at Blockstream, and we published the Sidechains Whitepaper (http://blockstream.com/sidechains.pdf). Sidechains aren't specifically trying to address scalability concerns, though they _can_ be used to alleviate pressure on a parent blockchain. However, this is definitely *not* their primary objective, and it's not clear how effective they'll be at this anyway – other solutions, such as the Lightning Network, much more directly address the scalability problem. Sidechains are much more for the testing and deploying of new features, such as privacy-focused Confidential Transactions, without endangering a production network with a untested code or a network partition (a hard fork). For example, the Bitcoin network can test new upgrades, in production, without putting customer funds at risk – a great example of this has been Segregated Witness, which after being deployed to a public sidechain last year, has now been proposed for inclusion in Bitcoin. Significant time and energy has been spent creating many other new features for Bitcoin, all of which can be tested using sidechains. These features are publicly available here: https://elementsproject.org/elements – in fact, we have bundled most of these features in a public sidechain, Alpha, which is where we've tested Confidential Transactions and the ever-popular Segregated Witness. Anyone can pick from this list and construct a new sidechain of their own: https://elementsproject.org/sidechains/creating-your-own.html Furthermore, sidechains are not limited to the fixed peg model. In fact, there are many competing economic policies that can be deployed on a sidechain, including inflationary and deflationary models alike! Sidechains can have any number of policies, features, and attributes that differ from their parent chains in much the same way that alt-coins differ from one-another – the difference is that with sidechains, we gain the added benefit of allowing users of these systems to freely move between them. It's clear we need to do a better job at making these clarifications. Suggestions would be appreciated!
Sandile Ngwenya (4 months ago)
Laurențiu Andronache blockstream still censor today unfortunately
Shane Hendrickson (2 years ago)
+autohmae If you want to act responsible, you what Core team is doing: acting responsible.
autohmae (2 years ago)
+Eric Martindale I don't want to sound harsh. So don't take my words the wrong way (English isn't my first language). But if people want to protect Bitcoin, they should act accordingly (responsible) and do something about the scalability. Everything else sounds a bit like protectionism and we should be very careful with that.
jonnyhatter35 (2 years ago)
+Eric Martindale Could you elaborate on what you mean by trust anchors?
jonnyhatter35 (2 years ago)
+Eric Martindale thank you for the explanation. I would like to make one comment: You said the difference between sidechains and altcoins is that with the former users can move freely between them. What do you mean by that? It seems to me people also move freely between altcoins.
Pham Thuy (2 years ago)
very funny everyone is just avoiding to say bitshares 100000 tps?
Brad (2 years ago)
Eric Sammons is forgetting that the TCP protocol suite has been in use for over 40 years and is still the primary data transmission protocol - so he's quite wrong about "in no other technology has that ever happened". And the value of side chain "coins" if they exist is not important because the success of a side chain is measured more on its performance (speed) and the growth of it's use (transaction volume) versus appreciation of it's market cap apart from the main/pegged coin.
Brad (2 years ago)
The objective of a sidechain is to facilitate and speed up transferring value into and out of the main chain/coin. It is an intermediate entity. There is no need to have a market trading/manipulating the relative value of that entity. It does not have to be a publicly traded "coin" and there may be reasons why doing that does not help to primary goals. If bitcoin is a transmission protocol for the internet of value, then a sidechain to me seems like a "gateway" or router of value interconnecting that protocol. And a very fast gateway, perhaps more like a high speed cache/buffer.
Armando Votan (2 years ago)
When is DASH volume going to start competing with ETHER Volume. and what smart contract platform does DASH have working?
Armando Votan (2 years ago)
I want Blockchain tech that is about what it creates not what others don't create. Currency Competition implies staying on top of your game, not talking shhhhh about others. The WE, not the me will be the currency winner of the day and then have to come strong with it the next day.
Q Queuenstein (2 years ago)
I envision a wallet system that will hold practically any kind of coin, and has a built-in in decentralized exchange. That way they all compete, and you can use it anywhere any of the coins is accepted, by simply doing an instant exchange.
moonman9j9 (2 years ago)
+Q Queuenstein I agree. I see different coins serving different purposes and the real innovation coming in ways to convert between them seamlessly. This could also help solve capacity issues.
Armando Votan (2 years ago)
You are doing a really good [email protected]*%ing job with the show and content. More Ethereum please...Slock it. Vunk, Augur, Casper, Homestead, UJOMusic, all coming and in active development...DASH sold out once already and will do it again. The Holy Grail of Scalability is going to be solved out of the Ethereum Camp, bet your Bitcoins on that!
fiazkou (2 years ago)
Today's episode is brought to you by DASH?
Carlo Vito (2 years ago)
The Daily Decrypt , Amanda please do a take on SIA.TECH, decentralized storage PLEASE
dave [hodl] matherly (2 years ago)
Amanda Just bought some BTS and I'll be squiring some Dash soon. I'm currently diversifying into various alt coins. Bought Ethereum at about 1.20 and am very happy. I'll need more wallets now. :)
Chase That Coin (2 years ago)
If you want to be realistic and not bias to the currency any one person owns most of, I think litecoin is the obvious replacement for BTC if it fails! It's forked with no problems and has passed the test of time..... I had some monero and dash but I sold them bc I can't do anything with it but watch the price go down #MYOpinion
Earthman Surfer (2 years ago)
+Chase ThatCoin - Doing something with any alt coin is just a matter of a vendor (or Bitpay) adding a plugin. The bigger issue is the altcoin. And for comparisons sake, LTC has done terribly while XMR and Dash have done pretty good. I do like LTC though. I just think people have left LTC as it didn't bring a whole lot new and have made like no changes.
Leandro Lima (2 years ago)
Hi Amanda! Thank you for your job! Can you make a video discussing the growth potential of crypto currency market and how can this in 2020?
hfjdn (2 years ago)
A dash dev can't say that sidechanes are the Future. If he would think so he wouldn't work on dash! I think Dash is the best altcoin by far!!! But bitcoin is the top and with sidechanes it will be for ever the number one with a 90% chance.
Earthman Surfer (2 years ago)
+striky - I have some Dash (as a hedge), but more Monero, as Dash has a lot more to risk - experimenting with POS and more importantly, it appears Dash has privacy issues. In this last one, your life may be at stake. I understand the best doesn'T always win...
Eric Martindale (2 years ago)
+Architecture sadly, changing the block size limit won't fix the scalability problem, nor will it make Bitcoin transactions any faster.  Both problems will require other solutions.
Architecture (2 years ago)
+Eric Martindale I just like to see BTC fix the crippling block size issue before they do something as big as that. My last BTC transactions were horribly slow even for BTC.
Eric Martindale (2 years ago)
+striky DASH should be deployed as a sidechain so Bitcoin users can move directly into it (and out of it) without an exchange! If we find that the DASH model works in the long term, let's import it into the main protocol.
Kyle Torpey (2 years ago)
Sidechains weren't created to solve scalability issues. They're main purpose is to allow more experimentation on new blockchains without having to create a new currency network. The free market comments on altcoins also don't make very much sense. Sidechains still exist in the free market. Just because a sidechain exists doesn't mean people are going to want to use it. A free market is still created with sidechains added to Bitcoin. No one is forcing people to use Bitcoin over any other cryptocurrency network. More people using Bitcoin as a result of sidechains is simply the likely outcome of the free market. Not sure why this guy is saying altcoins are a more free market solution when both sidechains and altcoins are being developed in the free market. Why don't we just see which approach wins in the free market? Sidechains also aren't price fixing; they are extensions of Bitcoin. It's not fixing the price between two different assets; it's making the same asset more flexible and useful.
hfjdn (2 years ago)
I 100% agree with your opinions. The only question is how they will make the sidechanes secure. maybe they implementing a option for a separate sidechane fee paying on the main bitcoin chain in the lock transaction and the sidechan miners compeat to claim that fee pool on the main chain.

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