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General Discussion / Re: The Bitshares blockchain as the first public sidechain for Bitcoin
« on: March 02, 2016, 12:44:09 pm »Beautiful. My only objection is with the 110% collateral requirement. What is the harm in SIDEBTC never being redeemed for BTC? The bitBTC would live forever collateralized with SIDEBTC. Since it's a 1:1 pairing there is never a chance of the two being worth different amounts and therefore would never have a need to be called. If the borrower lost the private keys to their signing account on the collateral then the bitBTC would be indestructible. They wouldn't be able to exit that position to unfreeze their BTC but since bitBTC is fungible they'd just need some bitBTC to unlock the same amount of real BTC. Sure the SIDEBTC would exist forever with the real BTC locked up forever but there's no harm in that. People lose private keys all the time - who knows how much actual BTC is unspendable.
Edit: Thinking about it more the SIDEBTC shouldn't require a key held by the depositor or SIDEBTC loses fungibility. Since SIDEBTC can only exist on the BitShares chain there is no reason to have anyone but the witnesses (aka the Graphene engine) able to spend it 1:1 for real BTC.