I've seen a lot of misinformation hating on BIP300 & BIP301. I cannot think of a single Bitcoiner mindset (maxi or otherwise) that would not actively endorse these BIPs if they understood them. I'll venture a guess that most #bitcoin plebs do not understand, and are band wagonning on one side or the other.
Lets fix that. If you oppose BIP300 or BIP301, post your objection here, and I'll do my best to address it with credible citations.
#plebchain #nostr
I'm just not gonna run it.
Why, though? If you understand it you WANT to run it
There's no real demand for it and this introduces many bad incentives for miners. Be aware of how many unintended consequence could come from this. #Bitcoin #BIP300
1. I like:
1.1 BTC denominated side chains.
1.1.1 This eliminates any technical justification for alts.
1.1.2 There is such cool privacy tech we can make.
2. I don't like:
2.1 Long withdrawal windows
2.1.1 Feels inelegant
2.1.2 Potential to depeg
3. Open questions:
3.1 Can the fees ever be high enough to make miner theft uneconomic?
3.2 Is this a centralising force?
3.3 Do I trust miners more than a multisig?
Re #2: the long withdrawal windows don't bother me, because atomic swaps make it possible to get fast trustless exits. The long pegout window is really there to prevent any long term depeg, but you're right, short term deviation is possible.
I'll respond later with my thoughts on #3, but short answer: I think miner theft is not a problem.
Re: Atomic Swaps
I am thinking of the atomic swap providers much the way I think of Fedi lightning providers. The swap providers do not have to be associated in any way with the "side chain controlers" but they do have to trust them. Only difference is the swap providers need to trust the side chain for the duration of up to two withdrawal windows (1year) where as with fedi lightning providers only need to trust until they request an on chain withdrawal. This is a much more intense capital requirement.
Atomic swaps don't depend on a provider or platform. Atomic swaps are direct between the two parties involved, no need for a trusted 3rd party.
If Alice has sBTC and wants to atomic swap with Bob for his BTC, they can do so instantaneously (or at least within Bitcoin confirmation times). Alice and Bob do not need to trust each other. Both are trusting Bitcoin and sBitcoin's consensus, but thats already the case since they intend to use Bitcoin and sBitcoin
The bitcoin side of the swap cannot be reversed without a 51% attack on Bitcoin. The sBTC side cannot be reversed without a 51% attack on the side chain. These attack risks can be accommodated by waiting appropriate confirmation times on each chain before finalizing the swap.
I don't think a majority of sBTC to BTC volume will be peer to peer but rather will involve a swap provider.
Consider.
1. Anyone can deposit into the side using an M5 Deposit transfer of BTC from-main-to-side.
2. M6 Withdrawals take time and require bundles be proposed and accepted.
This results in a situation where sBTC to BTC pressure can build but BTC to sBTC pressure cannot build. From this I assume sBTC -> BTC fees will be higher than BTC -> sBTC. The fees will attract service providers to arbitrage. They will need BTC to swap for sBTC. To transfer back out to have enough BTC to continue the arbitrage they need to wait for a withdrawal. They are effectively locking up BTC as sBTC to earn the withdrawal fee.
Arbitrage traders are not platforms or service providers. There will be a slew of arbitrage traders ready to charge a premium to swap out of sBTC, but they are not 'service providers'. They are not trusted, centralized, or able to interfere with your exit from sBTC. Anyone with a little money can become an arbitrage trader, so there will be many traders competing for volume, so they wont be able to charge too much of a premium or risk losing business to the other arbitrage traders.
Yes, sBTC -> BTC pressure may build, and arbitragers may charge a premium to exit, but if that premium gets too large, it will invite more liquidity into the market, and cause the premium to drop back down.
This is much more desirable than the trusted mint/provider situation we find ourselves in with Lightning, Cashu, Fedimint, etc
Re: depeg:
Under normal situation sBTC=BTC.
However, if withdrawals freeze due to disagreement on withdrawal bundle progression, I see potential for long (months to years) depegs. I don't fully understand how to resolve side chain controversy. 50% of miners abstaining from any side chain controversy freezes the funds. What next?
I think that's the point. A sidechain must be popular in the bitcoin ecosystem. If a sidechain is unpopular, then it stops working, because miners won't care to progress it, or may even prefer to steal from it.
It prevents shit coins and stuff like that. Only a popular, bitcoin-beneficial sidechain that can sustain approval from the miners (e.g. fee competive) will survive. All others will be evicted. Its like a shitcoin garbage collector, lol.
Not necessarily a critic but a question I still have regarding #drivechains:
Once #Bip300 is activated, how can one create a #drivechain? Is it permisionless or is the approval of someone (miners?) required? If it is permisionless, how does Bip300 protect against a spammer who would attempt to create 256 (the maximum allowed) vanity drivechains? Are the 256 slots simply allocated on a first come, first serve basis?
This is explained in a section of BIP-300. Give it a read then let ne know what you think.
https://github.com/bitcoin/bips/blob/master/bip-0300.mediawiki
Maybe I’m missing something but I’m not sure how this would prevent someone from creating vanity #drivechains. Yes, there are thresholds below which a #drivechain slot can be reclaimed but wouldn’t be possible for an attacker to generate vanity transactions (=usage) to maintain the ownership of the drivechain slot?
#Bip300
Miners can 'evict' vanity sidechains and make room for useful sidechains. Only sidechains which are useful to the network will survive.
What’s the mechanism for miners to evict a vanity drivechain?
They steal the hash escrow (BIP 300), or distribute the hash escrow to a better L2 of their choosing, and going forward honor the other L2's hash escrow updates.
Just like the Wisconsin Republicans are hoping to impeach a judge they don’t like before even before hearing a case. Political nuclear options often become acceptable when they shouldn’t be.
There's nothing political about this. Its objective commitment of electrons. Anyone can commit their own electrons to the process. No need for popular opinion. No need for endorsement of a political party. No need to even tell anyone you're participating. Its just math and physics. Idk what you're getting on about.
It’s 100% political among the miners. If there are situations in which it’s appropriate to steal a lockbox, the process will be controversial, hence political.
You do realize that is exactly what Bitcoin consensus is, right? If miners choose to collude to ignore a block and mine their own block to claim rewards (or TX priority or whatever) for themselves, they can. They'll need 51% hashrate, but they absolutely can. If you think that's political, then you do not understand consensus or p2p systems.
Same for hash escrows. If miners want to collude to evict a sidechain, they can. It'll take 50% hash rate, but they can. Its called consensus.
So, even if it was political, it would be exactly Bitcoin's current politics with no change. But... its not political. For that, I'll refer you to the definition:
How is the UTXO set (or equivalent) of the side chain handled if it is overwritten?
Well in this scenario, miners have decided to steal from the 'shitcoin' sidechain to make room for a 'good' sidechain. The 'shitcoin' ledger would become valueless, and shitcoin holders would be out of pocket.
That is the point though. If a vanity/shitcoin takes one of the drivechain slots, it risks getting evicted and liquidated by Bitcoin, if miners (and indirectly the users) have decided the shitcoin didn't deserve that space. So, sidechains must necessarily be 'good' for Bitcoin, or the sidechain will be sent packing.
Want to start a side chain? Think long and hard about how it will synergize with Bitcoin. Put your idea into public and make sure it gets broad community support (e.g. BIP) before trying to deploy it. If you do those things, you'll have a good idea if Bitcoin will evict+liquidate your sidechain or not.
I think we can do better. Surely there is a more graceful way to wind down a drive chain.
Assuming long term all drive chain slots get filled, there needs to be a way for low performing chains to drop off without rugging.
Well miners could read the sidechain state and reimburse all holders. Its completely up to them.
Right. I’ve suggested the Kanye West is a good candidate. Well known, maybe paranoid to have other people keep his keys, maybe doesn’t trust himself to keep his keys … why not just trust hashrate escrow? No key hygiene required.
Are you interested in trying to understand? Or are you just here to draw illogical hyperbolic comparisons for fun?
If a miner included a Kanye Weat drivechain proposal in a block, would other miners ack it? It’s a legit question. What if Kanye bribed miners for two weeks ?
I don't know. Depends if miners and users see that drivechain as valuable to the Bitcoin ecosystem (as with any other transaction or block). Majority miners can choose not to confirm and block or transaction they wish, regardless of drivechains. Majority node operators can refuse to relay any block or TX they wish, regardless of drivechains.
Would the network accept a Kanye drivechain? Idk. If it was economically popular (in terms of BTC hashrate and volume) then it could exist. If it was harmful to Bitcoin, I doubt people would fight for its continued existence, but I don't have a crystal ball.
But what even is a Kanye west drivechain in your mind? Any drivechain would still be BTC (trustless asynchronous 1:1). Are you just afraid of people calling their Bitcoin KanyeCoin or something?
Just the place where Ye holds his coin so he doesn’t have to remember his keys
Lol, that's a pretty funny thought. I doubt the Bitcoin ecosystem would support that L2, but Idfk, lolol
Majority miners if they existed could not make such choices without nuking the entire L1. A problem with DC is It gives miners who might be willing to collude a little playground where they have fun doing reorgs and few sniping and other shenanigans without hurting the main chain.
Wouldn't that similarly nuke the entire notion of sidechains? If miners fucked around with L1 and chose to reorg blocks to favor a cartel of miners, then it would destroy everyone's faith in Bitcoin and people wouldn't use it.
If miners did the same to DCs, then it would destroy everyone's faith in DCs and people wouldn't use them. Bitcoin would remain unscathed.
Ofc, in either case, that's not the economically rational decision, so game theory says economically rational miners wouldn't do that.
It could set up a path. One day, some miners are struggling so they decide to collude and mess around with a drivechain. Drivechain go south. A year or so later, the same miners are struggling, now they’ve already grooved the road to collusion. People often overestimate the speed at which miner collusion would destroy the value. It wouldn’t be overnight. Plenty of time to take their profits and go do something else.
Bitcoin has a sidechain. Why are you not using it? you think it would be the same reason people wont use this?
Also, what utility does tokenomics give bitcoin? Do we need a dogalon mars coin?
If you analyze your motivation to push #drivechain , does it not feel pointless?
1) Bitcoin does not have a trustless sidechain. Every sidechain is trusted, even Liquid. (Read the code. Liquid has a fallback which gives BlockStream full control of funds if the pegout federation fails to agree)
2) Drivechains do not enable shitcoins. Shitcoins get eaten up by miners, by design.
The motivation for a trustless sidechain is so that Bitcoin can act as a hard immutable backbone to a broader money system. Bitcoin cannot be money, because it fails two necessary properties: scalability and fungibility.
Drivechains enable scalability and fungibility without compromising on Bitcoin's immutability, 21M supply, or security. Its a win win win.
Lightning is solving scalability and it is fungible more and more everyday with adoption. You can swap it for any other asset with ease already. These problems are already solvable by changing nothing to the network. If #drivechain is really such a good idea. The motivation would be there to fork #bitcoin and run it.
Lightning gets an honorable mention for sure, but it falls to all the same criticisms levied against Drivechains. Except lightning has a few practical limitations that will prevent it from ever becoming 'money'. First of which: Bitcoin literally cannot process enough transactions to onboard the human race into the lightning network.
Lightning is awesome for what it is, but the only way it can reach global scale is with trusted centralized 'platforms' no different than fiat banks. You see it already with WalletOfSatoshi. Those of us looking to build freedom money cannot settle for a new system of trusted banks. We're trying to cut banks out of the picture and build money for the people.
BTW, I appreciate the debate. You're giving me lots to think about ❤️
thats good. thanks for not taking my opinions personally
well the current monetary framework the global is using isn't effect at processing the human populations transactions either. lightning is showing promise that it will do better. have to keep in mind, network subsidies and 100% global scalability are hurdles that are not close to being an issue yet. focusing on the background and driving into a rock in the foreground wont get someone to their destination safely.
On that point about centralizing wallet clients like "wallet of satoshi". The market is showing that people care more about ease of use then decentralization. more competitive clients that fit that need would dilute #walletofsatoshi dominance on #lightning network. keep in mind that lightning channel maintenance tools will most likely develop to a point that the average person running there own channels will find it easy. AI tools in my mind will become more of a role in this as well. when dealing with command-lines on MS-dos, it didn't seem like a personal computer was going to be something everyone was gonna adopt. But then in 1990, a client like windows helped that adoption process.
What about Rootstock and its merge mining and peg-in peg-out system isn’t desirable enough for your to wants to change the existing bitcoin network?
Rootstock is great, but just like Liquid its pegout is based on a federated multisig option... its not trustless. If you are OK with trusted payouts, then Rootstock is great. For applications that need to be teustless, Rootstock is insufficent.
Don't get me wrong, I think the Rootstock idea is great, and the protocol is not 'bad' for the ecosystem, or undeserving of trust. Its just important to build systems that need zero trust.
And the base layer of bitcoin gives that zero trust p2p when needed. Everything is a give and take. There is no need to force a 100% zero trust for an instantaneous transaction for a cup of coffee at a cafe. The risks out way the rewards for anyone that use this network as a bank. Someone that plays with the network for novelty or fun may like your perspective. Anyone with skin in the game (storing wealth and using the network) can see #drivechain has more downside then up
We can agree to disagree about whether or not trust less L2's are a significant 'reward'; and I agree the reward should be widely considered significant to justify a protocol change... but you make no mention of risk. What risks are you referring to? I see no risk.
Bitcoin is not broken. It works fundamentally as designed. It does what it was designed to do, which it what I need it to do.
Sorta. The design goals changed a bit over the years. Originally the design goal was trustless p2p money. Now we've settled for 'digital gold' or 'p2p fedwire' or whatever you want to call it. And yes, it does that fantastically.
But those of us who want to have a money free from banks still need to solve scalability and fungibility. I agree we shouldn't add those features directly into Bitcoin; Bitcoin's immutability is one of its greatest features. Trustless L2's is the way you get those features and build bankless money without building those features into Bitcoin itself.
I call it bitcoin, and I think it is scaling as much as it needs to through L2s. I think lightning and liquid will both go through some evolution before they actually see widespread use, but that evolution shouldn't require changes to the L1. I don't see any issue with bitcoin's present fungibility. Last I checked, my bitcoin was still free of banks.
I think our only point of contention is whether or not it is reasonable to make changes to an L1 based on proposed needs for an L2. I say it is not.
You're Bitcoin is free of banks, but it isn't money. I want money that's free of the banks, but money requires the following properties, some of which Bitcoin doesn't have and can't be obtained with today's L2's:
1. Durable ✅
2. Portable ✅
3. Divisible ✅
4. Scarce ✅
5. Verifiable ✅
6. Fungible ❌
7. Medium of exchange ❌
Without #6 and #7 Bitcoin will be a terrific financial instrument, but never money. Something else will always be used as money.
Sidechains can enable scale (medium of exchange) and fungibility, but they need to be trustless pegs, or else we end up with trusted money.
Since trustless p2p money would make us vastly more free than 'digital gold', I maintain we should still be striving for #6 & #7.
s/you're/your 😅
I use bitcoin as a medium of exchange for goods and services all the time. And any 1 sat = 1 sat
So do I. But it cannot be used as a medium of exchange for the entire economic population, because it cannot process enough transactions. For it to be money, the entire population needs to be able to use it as a medium of exchange, but that isn't possible.
No money is used by the entire economic population currently. Bitcoin is available to more of the entire population than any other money
We might be confusing terms here. Economic population means 'population of people who economically engage with each other'. So for USD, that would be at least US adults and businesses. For the Euro that would be Eruozone adults and businesses.
Bitcoin cannot even handle enough transactional volume to onboard the Eurozone economic population onto the lightning network. So therefore Bitcoin cannot become money in that population.
If we want Bitcoin to become global money, it needs to be able to process enough transactions to onboard the global adult/business population into the lightning network. That is not possible. Therefore people will result to lightning banks (like WalletOfSatoshi) which can do all the same evil stuff as fiat banks.
If you want to free the world from the banks, you want #6 & #7. If you just want a financial instrument to hedge you're portfolio, then Bitcoin's current status as digital gold is sufficient.
