Lol that is a funny project made irrelevant as it still depends on mining. It will not make bitcoin profitable nor decentralized. It will add more centralization.
No details were provided about the two way peg.
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From what I understand, it allows for experimental chains to be created and backed by the Bitcoin currency. You can move Bitcoin between these experimental chains and Bitcoin proper without risk of loosing Bitcoin. The successful chains will extend Bitcoin's functionality or lead the evolution of the Bitcoin protocol itself. I think that is how it works.
If I understand correctly, this means that any alt coin can be replicated as a side chain, backed by Bitcoin. I'm wondering if it is possible that Bitshares X or other future Invictus DACs could fall victim to this. That is, could Bitshares X be replicated and backed by Bitcoin as one of these 2-way pegged side chains? If so, I guess the benefits of profitability and greater decentralization inherent to Bitshares X would not be replicated since Bitcoin (and its POW structure) is still the backing currency. However, the true Bitshares X chain would have to compete with the much greater user base of Bitcoin and its only advantage would be its POS base structure since the functionality can be replicated.
Presumably, the threat of this will be enough to slow or stop the development of alt coins that can be two-way pegged. I'm still trying to wrap my head around this, but it is making me reconsider my investments in alt projects. I think it is a good thing, as it will theoretically consolidate the innovation going into all these alts and focus it back into a singular Bitcoin ecosystem. The strengthening of the Bitcoin protocol will return as the primary incentive for innovation rather than get rich quick schemes.
Of course, there will be projects that the market will decide work better on their own rather than as a Bitcoin side chain. I wonder what characteristics might distinguish such projects and if the planned Invictus DACs possess such characteristics. This might be worth discussing