Sidechains should be a priority for bitshares.

[starspirit]

Having said that, if doable, I would lean to a flexible collateral system rather than one backed solely by BTC, which would be more flexible and less controversial. See for example...https://bitsharestalk.org/index.php/topic,16326.msg208798.html#msg208798

I think the issue for this idea is that the asset is no longer fungible. If the one backing collateral system fails, only those associated tokens are in trouble, which means an existing BitUSD token can be worth a different amount based on its backing. That wouldn't fly.

No it would still be fungible. Every short would be able to choose their own mix of collateral, as long as it satisfies the Coverage conditions (maintains minimum collateral according to the rules). The market will value the token at the value of the reference asset as long as collateral backing it is always sufficient. Only in the event of a black swan (or the perceived risk of such an event) does the actual value of the collateral make any difference to the value of the token.

[radbll]

I understand why there is a heavy reluctance to consider a bitShares product with a BTC underlying. It seems like we are "supporting the enemy". Being dirty. And throwing away our capital gain potential. But if we get past the initial moral disgust, we might see that none of these things are actually true.

Who made BTC our enemy? What is the point of even having an enemy? BTC is really just the industry benchmark that we are seeking to exceed. It need be no more emotional than that. Using it as a form of collateral does not take any credibility from bitShares, nor add any to BTC. It is merely a statement that BTC is by far the most commonly held form of available collateral at this time.

There is also much scope to challenge the idea that BTS derives its growth potential by backing bitAssets.

I've demonstrated previously that bitAssets can be issued via self-creation, with funds raised from the sale of the bitAsset being used for any general purpose the borrower desires. In fact, my view is that using these funds to arbitrage against the real asset is the preferred motivator for issuers. This merely requires participating BTS users to move their existing tokens to the collateral pool. It does not require anybody to increase demand for BTS - BTS leverage is just one potential application of the borrowed funds.

I've also argued (without convincing many people yet!) that the market value of BTS is determined by supply and demand at any time, irrespective of any prior market trades that may have been initiated by new purchases of bitAsset. That is, the market needs to be convinced that any price BTS is forcibly bid up to is a reasonable price given its future return prospects, or it will simply realign the price at a lower level again.

This then gets to the essence of what really does drive the BTS price. In my opinion, its the utility that BTS can provide to owners through the prospect of income, or the potential utility of being able to access opportunities to earn income within the bitShares system. If there is real value there, does it really matter if a source of credit growth is removed?

So if we did offer a product to the market that had much greater demand potential and capacity (BTC>100x the market cap of BTS at this point) in the medium term, and we structured it so as to earn an income stream for BTS owners from that product, that could actually be a very good thing for owners of BTS. This would seem a lot more robust as a business model to me - earn income from a product, rather than the product concept merely being to compound the credit available to BTS bulls.

I believe the theoretically optimal model is to actually offer flexible collateral, where BTS, BTC or other digital collateral can be held as a mix to back bitAssets. Perhaps that will be more palatable to bitshares because its not seen as directly supporting any specific "competing" token and offers maximum flexibility.

Now this is a big shift for many given the previous paradigms held in bitShares, and everyone will have a different opinion on it. So what's to stop us doing both? With privatised bitAssets, the purists can still have BTS backed bitAssets, and there can be a parallel market for bitAssets backed by BTC or other combinations of collateral. Better us earning the reward than a competitor. And to be truly self-funding, bitShares ultimately needs to earn reward by delivering value to the market and meeting its needs.

[monsterer]

You can't make bitshares a side chain of bitcoin without accepting all the bad design decisions they made - POW, 10 minute block times etc...

Not true. It takes 10 minutes to get the BTC on the sidechain, at which point the coins have the same properties as the sidechains coins. In other words, BTC would have all the properties of BTS until you "withdraw" the BTC.

That's having BTC as a sidechain of BTS, which isn't possible, since BTS does not have side chains.

[Ander]

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

You guys don't seem to understand what it means if BTS is not used as the collateral.  It means BTS is worthless, and you simply give all the hard work of the bitshares community for the past 18 months to the other crypto community for free, and get nothing in return. 

This idea is not a partnership between two communities, it is a complete theft of all of the value of BTS.

I am all for collaborations between crypto communities, and treating other crypto enthusiasts as friends and not enemies. But that is not what this idea is.  This idea as posted in the OP is to give away 100% of Bitshares to someone else, and leave the Bitshares community holding worthless tokens. 

[Method-X]

You can't make bitshares a side chain of bitcoin without accepting all the bad design decisions they made - POW, 10 minute block times etc...

Not true. It takes 10 minutes to get the BTC on the sidechain, at which point the coins have the same properties as the sidechains coins. In other words, BTC would have all the properties of BTS until you "withdraw" the BTC.

[Chronos]

Having said that, if doable, I would lean to a flexible collateral system rather than one backed solely by BTC, which would be more flexible and less controversial. See for example...https://bitsharestalk.org/index.php/topic,16326.msg208798.html#msg208798

I think the issue for this idea is that the asset is no longer fungible. If the one backing collateral system fails, only those associated tokens are in trouble, which means an existing BitUSD token can be worth a different amount based on its backing. That wouldn't fly.

[Empirical1.2]

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Sidechains likely are legit...which means that there really is no reason to worry on that front.  But the real question is...how does this help us?  And can it benefit us in a way that we wouldnt already see if we had patience and persistence?

We are tying ourselves into a market that actually is not free.  Bitcoin has many backers...ironically one of which seems to be the CFR. For those who know about the CFR, this should be a concern...because if they want bitcoin...it means it is precisely the technocrat's dream device for tracking every interaction we ever have.  In fact nearly all the big names in "journalism" out there these days are actually members of the CFR as well.  If we think these people are not connected with the same kingpins in charge today...we are blinding ourselves unnecessarily to facts.

I see no reason to back bitassets directly with bitcoin...or to even open up that Avenue because then we are opening the floodgates for a stealth attack that steals our tech and moves it to bitcoin with little repayment to our community (what happens to the BTS you each hold if the mining and banking cartels inject huge funds into btc-backed bitassets???).

Just like data said...we CAN back them with bitcoi  INTERNALLY and still keep control over what we ALL have fought so hard to make thrive!  Don't forget everyone... bitBTC can back bitassets to now with the bitassets 2.0 proposal.

Actually fuzzy, what I imagined was a BTC-backed token existing on our block-chain, and using that as the collateral, rather than BTC directly. So the control, issuance and settlement features would never leave the domain of bitShares, although it could trade freely externally like any other bitAsset. I introduced this idea here, and expanded it to looking at using such a token for collateral in this thread...https://bitsharestalk.org/index.php/topic,15957.0.html
Why you might do this rather than using bitBTC backed by BTS is for the reasons I listed earlier in this thread. But like I said earlier, I would prefer the ability to have a collateral mix rather than just BTC, another advantage being less chance of black swans.

I think ultimately something like this will be done if it can be done. Down the track there is no reason why collateral can't just be plug-and-play - insert whatever token or mix of tokens you want. So maybe we are only left to debate how much support we might wish to give it when it happens. Personally I think its better to have the bitShares technology at the centre of it and controlling it, and earning reward and brand recognition for the community, rather than left out of it. But it will be interesting to see how things evolve and what we all think at that point.

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Hmm...I'm failing to see how we would both win in this scenario. Literally what value would BTS have if it wasn't backing bitassets? Sounds to me like it would have a quick drop to zero, while bitcoin reaps all the hard work of the BTS devs...

Am I missing something?

The point you raise is that we need to be much clearer on the value model for BTS. If its only value is in backing bitAssets, and bitAssets don't require BTS backing, then we are lost...
(BTW I think we are far from lost, just highlighting the need to explore the bigger picture on what BTS can be).

  Makes sense

Bitcoiners and the general public will probably get behind Bitcoin backed BitAssets much more so than ones backed by shares in a company with the convoluted vesting, dilution and ownership structure that BitShares has.

In the short term though I would prefer to use our first mover advantage to focus on BTS BitAssets to see if we can gain the network effect and growth to make them the market leader.

[fuzzy]

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Sidechains likely are legit...which means that there really is no reason to worry on that front.  But the real question is...how does this help us?  And can it benefit us in a way that we wouldnt already see if we had patience and persistence?

We are tying ourselves into a market that actually is not free.  Bitcoin has many backers...ironically one of which seems to be the CFR. For those who know about the CFR, this should be a concern...because if they want bitcoin...it means it is precisely the technocrat's dream device for tracking every interaction we ever have.  In fact nearly all the big names in "journalism" out there these days are actually members of the CFR as well.  If we think these people are not connected with the same kingpins in charge today...we are blinding ourselves unnecessarily to facts.

I see no reason to back bitassets directly with bitcoin...or to even open up that Avenue because then we are opening the floodgates for a stealth attack that steals our tech and moves it to bitcoin with little repayment to our community (what happens to the BTS you each hold if the mining and banking cartels inject huge funds into btc-backed bitassets???).

Just like data said...we CAN back them with bitcoi  INTERNALLY and still keep control over what we ALL have fought so hard to make thrive!  Don't forget everyone... bitBTC can back bitassets to now with the bitassets 2.0 proposal.

Actually fuzzy, what I imagined was a BTC-backed token existing on our block-chain, and using that as the collateral, rather than BTC directly. So the control, issuance and settlement features would never leave the domain of bitShares, although it could trade freely externally like any other bitAsset. I introduced this idea here, and expanded it to looking at using such a token for collateral in this thread...https://bitsharestalk.org/index.php/topic,15957.0.html
Why you might do this rather than using bitBTC backed by BTS is for the reasons I listed earlier in this thread. But like I said earlier, I would prefer the ability to have a collateral mix rather than just BTC, another advantage being less chance of black swans.

I think ultimately something like this will be done if it can be done. Down the track there is no reason why collateral can't just be plug-and-play - insert whatever token or mix of tokens you want. So maybe we are only left to debate how much support we might wish to give it when it happens. Personally I think its better to have the bitShares technology at the centre of it and controlling it, and earning reward and brand recognition for the community, rather than left out of it. But it will be interesting to see how things evolve and what we all think at that point.

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Hmm...I'm failing to see how we would both win in this scenario. Literally what value would BTS have if it wasn't backing bitassets? Sounds to me like it would have a quick drop to zero, while bitcoin reaps all the hard work of the BTS devs...

Am I missing something?

The point you raise is that we need to be much clearer on the value model for BTS. If its only value is in backing bitAssets, and bitAssets don't require BTS backing, then we are lost...
(BTW I think we are far from lost, just highlighting the need to explore the bigger picture on what BTS can be).

Yeh now this is awesome^

I LOVE bitcoin because it inspired me and taught me so much.  I also think there are many amazing people who were very loyal to what was supposed to be the big movement...but those wouldn't be the people in charge.

So I would love to somehow honor btc by adding it to a basket like that.  Pretty much 100% agreed.

I'm pleading ignorance when it comes to sidechains. I would assume the DAC can continue making money through network fees. The technology behind bitshares is pretty advanced and can do a LOT of stuff bitcoin can't. Way more than just bitassets. I'm thinking about this strategically. If we're one of the first sidechains, that will gain us massive credibility and momentum. Combine "bitcoin friendly bitshares" with a referral system and that makes for a pretty massive rocket ship.

But like I said, I know nothing about sidechains or if such a partnership is even possible. I'm pretty sure allowing for cross chain transactions isn't permanent. If down the road, things get messy with Bitcoin the shareholders will decide what to do. At the very least, it's worth keeping an open mind about. Bitcoin isn't the enemy. Not yet at least.

Monsterer is right about the technicals because all sidechains are precisely that with respect to bitcoin--subservient to proof of work (and thus mining equipment manufacturers). 

Now if they wanted to connect up to us in such a way and gain all the benefits that comes along with it (especially with respect to the separation of power) I am starting to feel the vibe.  Heck I'd love to cover it.

Now with that said...I dig the spirit you have about cooperation and love

Good to see you around more these days bro.

[monsterer]

You can't make bitshares a side chain of bitcoin without accepting all the bad design decisions they made - POW, 10 minute block times etc...

[Method-X]

I see no reason to back bitassets directly with bitcoin...or to even open up that Avenue because then we are opening the floodgates for a stealth attack that steals our tech and moves it to bitcoin with little repayment to our community (what happens to the BTS you each hold if the mining and banking cartels inject huge funds into btc-backed bitassets???).

I'm pleading ignorance when it comes to sidechains. I would assume the DAC can continue making money through network fees. The technology behind bitshares is pretty advanced and can do a LOT of stuff bitcoin can't. Way more than just bitassets. I'm thinking about this strategically. If we're one of the first sidechains, that will gain us massive credibility and momentum. Combine "bitcoin friendly bitshares" with a referral system and that makes for a pretty massive rocket ship.

But like I said, I know nothing about sidechains or if such a partnership is even possible. I'm pretty sure allowing for cross chain transactions isn't permanent. If down the road, things get messy with Bitcoin the shareholders will decide what to do. At the very least, it's worth keeping an open mind about. Bitcoin isn't the enemy. Not yet at least.

Hmm...I'm failing to see how we would both win in this scenario. Literally what value would BTS have if it wasn't backing bitassets? Sounds to me like it would have a quick drop to zero, while bitcoin reaps all the hard work of the BTS devs...

Am I missing something?

• It's a ledger capable of 100,000 TPS.
• It's a decentralized exchange
• It allows for dynamic account permissions
• User issued assets
• Bond market

Once we have actual adoption, we can get creative and think of other ways the blockchain can be utilized.

[starspirit]

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Sidechains likely are legit...which means that there really is no reason to worry on that front.  But the real question is...how does this help us?  And can it benefit us in a way that we wouldnt already see if we had patience and persistence?

We are tying ourselves into a market that actually is not free.  Bitcoin has many backers...ironically one of which seems to be the CFR. For those who know about the CFR, this should be a concern...because if they want bitcoin...it means it is precisely the technocrat's dream device for tracking every interaction we ever have.  In fact nearly all the big names in "journalism" out there these days are actually members of the CFR as well.  If we think these people are not connected with the same kingpins in charge today...we are blinding ourselves unnecessarily to facts.

I see no reason to back bitassets directly with bitcoin...or to even open up that Avenue because then we are opening the floodgates for a stealth attack that steals our tech and moves it to bitcoin with little repayment to our community (what happens to the BTS you each hold if the mining and banking cartels inject huge funds into btc-backed bitassets???).

Just like data said...we CAN back them with bitcoi  INTERNALLY and still keep control over what we ALL have fought so hard to make thrive!  Don't forget everyone... bitBTC can back bitassets to now with the bitassets 2.0 proposal.

Actually fuzzy, what I imagined was a BTC-backed token existing on our block-chain, and using that as the collateral, rather than BTC directly. So the control, issuance and settlement features would never leave the domain of bitShares, although it could trade freely externally like any other bitAsset. I introduced this idea here, and expanded it to looking at using such a token for collateral in this thread...https://bitsharestalk.org/index.php/topic,15957.0.html
Why you might do this rather than using bitBTC backed by BTS is for the reasons I listed earlier in this thread. But like I said earlier, I would prefer the ability to have a collateral mix rather than just BTC, another advantage being less chance of black swans.

I think ultimately something like this will be done if it can be done. Down the track there is no reason why collateral can't just be plug-and-play - insert whatever token or mix of tokens you want. So maybe we are only left to debate how much support we might wish to give it when it happens. Personally I think its better to have the bitShares technology at the centre of it and controlling it, and earning reward and brand recognition for the community, rather than left out of it. But it will be interesting to see how things evolve and what we all think at that point.

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Hmm...I'm failing to see how we would both win in this scenario. Literally what value would BTS have if it wasn't backing bitassets? Sounds to me like it would have a quick drop to zero, while bitcoin reaps all the hard work of the BTS devs...

Am I missing something?

The point you raise is that we need to be much clearer on the value model for BTS. If its only value is in backing bitAssets, and bitAssets don't require BTS backing, then we are lost...
(BTW I think we are far from lost, just highlighting the need to explore the bigger picture on what BTS can be).

[nomoreheroes7]

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Hmm...I'm failing to see how we would both win in this scenario. Literally what value would BTS have if it wasn't backing bitassets? Sounds to me like it would have a quick drop to zero, while bitcoin reaps all the hard work of the BTS devs...

Am I missing something?

[fuzzy]

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Sidechains likely are legit...which means that there really is no reason to worry on that front.  But the real question is...how does this help us?  And can it benefit us in a way that we wouldnt already see if we had patience and persistence?

We would be tying ourselves into a market that actually is not free.  Bitcoin has many backers...ironically one of which seems to be the CFR. For those who know about the CFR, this should be a concern...because if they want bitcoin...it means it is precisely the technocrat's dream device for tracking every interaction we ever have.  In fact nearly all the big names in "journalism" out there these days are actually members of the CFR as well.  If we think these people are not connected with the same kingpins in charge today...we are blinding ourselves unnecessarily to facts.

I see no reason to back bitassets directly with bitcoin...or to even open up that Avenue because then we are opening the floodgates for a stealth attack that steals our tech and moves it to bitcoin with little repayment to our community (what happens to the BTS you each hold if the mining and banking cartels inject huge funds into btc-backed bitassets???).

Just like data said...we CAN back them with bitcoi  INTERNALLY and still keep control over what we ALL have fought so hard to make thrive!  Don't forget everyone... bitBTC can back bitassets to now with the bitassets 2.0 proposal.

[Thom]

What I'm saying is bitcoin is not the best all singing all dancing cryptocurrency/blockchain.

I don't have to kiss mining cartel butts. I just have to keep doing what the community has seen me doing from nearly day one.  Not only that, but BitShares' ability to process (conservatively) 100,000tps while bitcoin is still stuck at 7, enables me to continue approaching industries that require far more than 7tps. 

So if anyone thinks our network effect is going to always be inferior to bitcoin...or that we will need to partner with bitcoin or risk bitcoin stealing our work, I have news for you...Beyond Bitcoin is here for a reason.  We chose bitshares from the VERY BEGINNING for a reason.
...because we wanted to be accountable to all shareholders and not a technocrats regime of mining equipment manufacturers/networks.
...because we knew that bytemaster was severely unappreciated in the crypto space and would need backing of people who wanted to see his innovations disrupt the unacceptible status quo. 

^THIS!

Awesome post fuzzy!

There have been some interesting thoughts expressed in this thread. I'm impressed with the perspectives offered by starspirit, riverhead and of course fuzzy, who IMO nailed it! 

[Method-X]

I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.