sorry but I have to say I'm a little bit disappointed that so many people support this idea...
what application will build based on a 10min confirmation and 7TPS system? forget the BTC Sidechains guys, it will not change anything
wake up, we will have a 100000TPS system!
I suspect that different people on this thread are potentially coming from quite different perspectives on how such a structure would be put together. Most debates are like that...
But I can imagine it might be possible to create UIAs on the bitShares block-chain that are backed by BTC, LTC, NXT, you-name it, as long as there are ways to minimise counter-party risk through appropriate operations like multi-sig, escrow or the like. To be honest I don't know if side-chains help with that or not, I'm naive in that area, though I've asked the question before.
Now imagine you have, on the bitShares block-chain, tokens physically backed by these outside assets. Not only might these be in high demand in their own right (given the relative benefits of our network), but they could serve as collateral behind other asset structures such as bitAssets. No need to change the properties of bitAssets - just simply plug in a new accepted collateral type.
These assets could then trade externally and be promoted as collateralised tokens, with all the same benefits as bitAssets, but without the market having to decide whether it likes BTS as collateral or not. It takes away the inclination to make any judgement on BTS at all, and focuses them on the security of the block-chain enforced collateral rules.