BTC/BitBTC bridge?

[tonyk]

I also have this nagging thought/feeling that it should probably not be done by the witnesses...

Some sort of bonded authorities(s)/guilds?

One who wants to be a 'side-chain signer' puts a BTS bond in a special bond account  and gets proportional (to the amount put) signing power for those side chain transfers .[otherwise the bond account is controlled by everyone (aka every BTS holder) and requires 50% approval to be spend[ for the case it is needed as an insurance bond], otherwise it is a vesting balance maturing back to the person who made it for say 9 mo.

Another interesting twist is those bonds to be in bitSideChainToken and to actually be also used for the token received by such cross-chain transfers.... so when you transfer from ETH you get bitETH from this bond fund and people having put those bitETH now control ETH on the eth blockchain.

[Empirical1.2]

What?  You're trusting your coins to the owner of a single exchange company with no supervision by other independent cosigners?  Really?

They're trusting registered & highly regulated companies in countries with relatively strong & effective legal systems. Their owners are also making millions of dollars and so have a financial incentive to keep making money and not go to jail.

DPOS currently has neither the same legal fallback & delegates who make only a few hundred bucks a month. While the delegates ability to damage and profit from harming BTS is limited. They could get full value from other blockchain tokens.

By increasing the incentive for delegates to misbehave and therefore the trust required in them you increase the fragility of BTS. Blockchain competition is also reducing fees to near zero so the value centre of BTS is BTS collateralised SmartCoins, UIA tokens not collateralised with BTS are much less attractive, see MaidSafe, Synereo & Agoras, collectively worth >$50 million on an Omni blockchain worth <$1.4 million...

So I don't see the value in there myself. For me the way to make BTS useful and popular now & massively grow the value of BTS is by focusing on market maker & yield subsidies to create useful liquidity & demand around the peg so that bridges can convert fairly close to 1-1.

[Stan]

Here's what I don't get then.

If UIAs are preferred, then really, what is the advantage to get OPEN.EUR, TRADE.EUR or META.EUR (if it exists) versus simply leaving an EUR balance at a centralized exchange and not buying any crypto with it?

One might answer "these tokens are on the blockchain!" .. to which I'd answer, yeah but so what?
Now everyone knows my balance instead of just the centralized service.

It seems clear to me that if we have all these UIAs floating around, and they're (much) easier to get than the Smartcoin, then people will just hold these instead of the Smartcoins.. we are then left in a situation where there are dozens of tokens representing pretty much the same thing, they don't trade against each other (wanna get in through A and out through B? sorry, not possible, at least not in a straightforward way)

Is any of this then that much different from Paypal? I don't think so.

And note that I'm not saying metaexchange and blocktrades etc shouldn't exist.. but do you see the point?

From what I'm reading here, the DEX is not used and smartcoins are not used and holding centralized tokens that'll be worthless should the company behind them decide to disappear tomorrow ..  is seen as perfectly acceptable indefinitely rather than a temporary necessary evil (if I got the gist of the replies right... correct me if that's not the case)

What's the appeal for the platform, then?

Well, as Marty McFly once said, "History is gonna change."

Just because most people are content to trust centralized tokens now, does not mean that will continue to be true in the coming collapse.  When the flight to safety starts, the value proposition of autonomously tracking the value of external assets without counterparty risk goes through the roof.

Patience.

In the meantime, the chain does need other reasons for people to use it.  Lots are being discussed. 

One of my favorites is the concept of DPOS sidechains that BM has spent the past three Mumbles discussing.

If DPOS nodes are collectively trusted enough to secure a single asset then they can hold all coins just like a single exchange does.  This is the true exchange on a block chain.  Right now we are using only half of the concept:

Half 1:  The trading engine and native tokens are secured on the chain.
Half 2:  Actual BTC, DOGE, etc. are still held by centralized exchanges.  Why?

The new side chain concept uses those existing witness nodes to do Half 2 as well.  Why not?  We trust them under DPOS consensus to secure the most important digital asset in the world, BTS. Why can't we trust them to do the centralized exchanges job of collectively holding our BTC and DOGE for us too? 

Only then will be have a fully decentralized exchange... and unification of all blockchains on a financial superhighway as a byproduct.

With this approach the uber-trusted witness nodes themselves can issue light-speed "claim check" tokens for all the other real chain token they are holding in multi-sig escrow.  Just like banks used to issue much more portable receipts for gold in their vaults.  People quit redeeming those receipts for real metal and just kept passing them around - trusting paper because they new the could redeem them if they wanted to.

DPOS lets us do this traditional bank function so much better!  And we have real BTC and Doge in our witness vaults!

This is the holy grail that takes BitShares to the next level.  It is the killer meta-app that only BitShares is in a position to offer.

As this catches on, BitShares witnesses will become the most trusted and therefore biggest holders of all other currencies. 

What?  You're trusting your coins to the owner of a single exchange company with no supervision by other independent cosigners?  Really?

[tonyk]

The issue is that we don't have nearly enough users willing to short these smartcoins into existence.  Side chains will help alleviate this issue, but I think we should also be providing interest to those willing to lock up their bts to create smartcoins.  I think shorting is currently under incentivized.

Yes. My current hopes are that the 'liquidity subsidy program' will be structured/funded in such a way that it helps a lot with this issue as well:
- First  by giving a piece of mind to the shorters i.e. knowing they can buy back at will at any time close to the peg in enough quality, will ease their mind and they will be willing to short more
-Second - the liquidity providers will get enough reward to justify they themselves shorting more smartcoins in times of needs just to stay in business and get the liquidity reward.

//Edit How this program is structured and funded and so its effectiveness in this regard is yet to be seen though... I fear we go for a half backed effort that does not help.

[puppies]

I am also in agreement with karnal.  I think we should start calling UIA's trust based assets.  Theres nothing wrong with trust based assets.  I think smartcoins are much better though.  The issue is that we don't have nearly enough users willing to short these smartcoins into existence.  Side chains will help alleviate this issue, but I think we should also be providing interest to those willing to lock up their bts to create smartcoins.  I think shorting is currently under incentivized. 

[tonyk]

@karnal Strongly agree!

+ 1

[karnal]

Unfortunately I agree with Karnal here...I believe that if there is no action in bitbtc then bitshares eventually will be worthless. The most important that bitshares has to offer are the bitassets and yet apparently most people prefer the IOU assets. bitbtc and bitgold should be the most important bitassets in our blockchain. More important than bitusd or bitcny or anything else.

It just seems so painfully obvious to me.

If we're relying on 3rd parties to ensure the tokens are worth anything, then Bitshares is no better than any other 3rd party centralized service.
In fact, it's worse, because at least with these giant regulated companies, you're pretty much guaranteed not to lose your funds.

I mean, just imagine the madness.. having to keep track of the financial health of half a dozen bridges (one for CENTRALIZED.EUR, one for CENTRALIZED.CNY, yet another one for CENTRALIZED.SILVER, etc) 24/7/365!

Well, you say, they'll grow! They'll become giant! And regulated!.... well, then we would've come full circle, would we not? Why go through all this trouble? Just stick with the big banks and the paypals and skip the whole drama.

Only group that benefits from BitBTC are active traders.

I strongly disagree. That's the same as saying BitUSD is only useful for active traders.

I'm not saying in most cases it wouldn't make more sense to hold actual BTC rather than BitBTC (mainly because of the small but present risk of going in/out of BitBTC via a gateway), but with respect, you have to be blind to not see the advantages of being able to trade BitBTC against fiat on a whim.



I just don't see what's so special about Bitshares if users are expected to store their wealth (be it BitBTC or BitSOMEFIAT) using centralized services on the blockchain. In that case we're talking about a giant circle to end up at the same place.

[Samupaha]

Eventually BitBTC will be worthless because it's pegged to BTC, which is pretty much certainly going to fail. That's why I've been selling my bitcoins and buying other cryptoassets (mostly BTS, of course). And that is the reason why I don't own any BitBTC. I don't do anything with it and I'm quite sure that it will lose it's value on a long term.

Only group that benefits from BitBTC are active traders.

[mf-tzo]

Unfortunately I agree with Karnal here...I believe that if there is no action in bitbtc then bitshares eventually will be worthless. The most important that bitshares has to offer are the bitassets and yet apparently most people prefer the IOU assets. bitbtc and bitgold should be the most important bitassets in our blockchain. More important than bitusd or bitcny or anything else.

[karnal]

Here's what I don't get then.

If UIAs are preferred, then really, what is the advantage to get OPEN.EUR, TRADE.EUR or META.EUR (if it exists) versus simply leaving an EUR balance at a centralized exchange and not buying any crypto with it?

One might answer "these tokens are on the blockchain!" .. to which I'd answer, yeah but so what?
Now everyone knows my balance instead of just the centralized service.

It seems clear to me that if we have all these UIAs floating around, and they're (much) easier to get than the Smartcoin, then people will just hold these instead of the Smartcoins.. we are then left in a situation where there are dozens of tokens representing pretty much the same thing, they don't trade against each other (wanna get in through A and out through B? sorry, not possible, at least not in a straightforward way)

Is any of this then that much different from Paypal? I don't think so.

And note that I'm not saying metaexchange and blocktrades etc shouldn't exist.. but do you see the point?

From what I'm reading here, the DEX is not used and smartcoins are not used and holding centralized tokens that'll be worthless should the company behind them decide to disappear tomorrow ..  is seen as perfectly acceptable indefinitely rather than a temporary necessary evil (if I got the gist of the replies right... correct me if that's not the case)

What's the appeal for the platform, then?

[Samupaha]

Maybe I give SmartCoins too much credibility? It's always been one of the most appealing aspects of this whole BitShares thing to me..

Smartcoins are the real deal, but it's not a solution for every problem.

There are lots of possibilities for everybody who is interested in Bitcoin trading. So far there hasn't been much demand for decentralized exchange. Most of the traders seem to be happy with centralized ones. So why we should go to that market? There is lots of competition so it will require a lot of work to get some meaningful traction.

Probably it would be much better to focus on markets that don't exist yet or at least don't have many other competitors.

[Shentist]

I don't understand what OP means. There are UIAs in bitshares which are hard pegged to BTC. They are useful to deposit/withdraw funds into/from bitshares. Unfortunately, there is no market between bitBTC and BTC pegged UIAs. To deposit/withdraw you need to go through BTS.

we are providing liquidity also to the market METAEX.BTC /bitBTC on the bitshares exchange. https://bitshares.org/wallet/#/market/METAEX.BTC_BTC

in the past we run directly bitBTC/BTC on metaexchange.info, but the demand was not really there, so we changed the provided pairs into the internal exchange. so you
can go from BTC-->METEX.BTC-->bitBTC and visaversa. at the moment the provided liquidity is low, but if you look into our pairs it is enough for the current demand.

[yvv]

I don't understand what OP means. There are UIAs in bitshares which are hard pegged to BTC. They are useful to deposit/withdraw funds into/from bitshares. Unfortunately, there is no market between bitBTC and BTC pegged UIAs. To deposit/withdraw you need to go through BTS.
 

[karnal]

Well, if there was a working BTC/BitBTC gateway then people could pay with it, just withdraw (from the bts wallet) to the destination address being requested by the merchant.

I think there is value having BitBTC vs the real deal, namely it enables trading it in a decentralized way against fiat (BTS-style) in a much more streamlined way, without either going back and forth between the legacy system and the crypto world, or going in/out of 3rd party exchanges.

Also, with STEALTH on the horizon, arguably it's more private to hold BitBTC (particularly if the gateway itself had the option to send via STEALTH, otherwise by sending to oneself) rather than BTC in its present incarnation.


Maybe I give SmartCoins too much credibility? It's always been one of the most appealing aspects of this whole BitShares thing to me..

[Samupaha]

BitBTC is useful only for traders. Anyone else doesn't need it so it's unlikely that it will have any meaningful demand in the near future.

You have to remember that it's only a derivative that tracks the value of BTC and it's not the real thing. You can't use it anywhere to buy stuff, it's just a financial instrument.