The success of a blockchain protocol is often influenced by its network effect, which is the positive impact of having more participants in the system.
Drivechains enable the secondary chain to benefit from the network effect of the main Bitcoin chain. As more users & participants join the secondary chain, the barriers to attack & control become higher due to the collective security measures.
And this can lead to the dominance of the secondary chain over time, especially when considering security assurances offered by Proof of Last Transaction Control..
In a scenario where a sidechain adopts conservative but slightly more aggressive than current 'bitcoin soft forks', it may gain an advantage in terms of security & feature adoption.
As users become more confident in the sidechain's security & functionality, there's a likelihood that it could gain dominance over time…
#Sidechains that implement PoLTC (Proof of Last Transaction Control) provide a higher degree of assurance to users when interacting with pegged assets. This confidence can encourage more users to participate in the sidechain ecosystem, leading to increased adoption & a stronger network effect…
Hummmm! It could be that he is.. This’s no doubt while some can substitute him for Hall Finney as Vitalik once stated in a Lex Fridman podcast. So far, it remains a mystery! But hey, everyone can feel free to have their own certainties.
https://github.com/supertestnet/handcrank nostr:note1pevzc2v9teflqedqchr6fp0kaup96wnnwknfef47pk5czkd3d8vql9shwx
Thanks for enlightening me more on that! However, I thought this could be an effective component to drivechains. There’s really a difficulty in untangling & articulating two types of scalable representations, some merged, others attached to the custody of the funds of sidechain, in particular complementary & based on a soft guarantee.
"Create a new genesis block for a staging network, but in all other aspects, as far as possible, keep the properties the same as bitcoin [...] Perhaps also a "straw poll" voting system could be set up for those that own staging coins could sign messages saying which patches they would like to test out next. When patches are stable in the staging area, they could be "promoted" to the main net". By nostr:npub1melv683fw6n2mvhl5h6dhqd8mqfv3wmxnz4qph83ua4dk4006ezsrt5c24
https://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg03323.html nostr:note1m9xzc652vfhsy9gwu2t28zn7xmmj2t6u6wketqqt2hgha9rp69gsp3pfqt
One way peg described by Adam Back. 'Is there a way to do bitcoin-staging'??
https://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg04315.html nostr:note1pevzc2v9teflqedqchr6fp0kaup96wnnwknfef47pk5czkd3d8vql9shwx
As much for me, it may be a rather useful & really achievable complexity.. Good idea, in this sense! Other than in the form of a soluble alternative..
Really so hard to understand.. But simply possible when you get started..
https://www.drivechain.info/blog/hard-to-understand/ nostr:note17a8zmqy672uqmsv35ud33p2js06q2zm4m85ml5n7ptvxtjassp3qw0a7es
Testchain…
😢! She just had her 3rd eye! Strongly, I wish him a quick healing...
https://www.drivechain.info/blog/usage-tour/ nostr:note10a0aujtpzkg83uqrkr5rqlp2ql9rw6tttdxrrv3w5jath8gk4kxshwtklz
Sidechain Privatization (maximizing smart contract value, handling net-negative in-fighting among smart contracts), The Potentially Detrimental Effects of Sidechains & What To Do About Them (forthcoming) by Paul Sztorc. 'Drivechain Sequence'.
Smart Contracts: Are they additive or ecological ?
https://youtu.be/xGu0o8HH10U nostr:note18md8e4aq0gk0vuds3rgqrvrqyeanqnawvh8lgq3weayheqfpeekq9vdsmn
If this can potentially lead to unforeseen consequences, the likelihood of possible centralization should be eradicated. The entire scalability of the Blockchain is a crucial phenomenon that requires internal & external meticulousness…
Never! Not even sure that it can cross the minds of the developers or participants of the Bitcoin protocol… Unless we detect some Judas Iscariot!
Otherwise, we can continuously innovate & explore new consensus mechanisms without resorting to PoS, or other hybrid models which can provide alternatives to traditional PoW & therefore opening up to multiple chains.
Hmmmm! Perhaps, choice of nodes & economic incentives mixed with different sidechain implementations (SIP) can indeed have ripple effects on the entire network including the mainchain (Bitcoin).
Hypothesis: Gini Coefficient & Mining Centralization.
The Gini coefficient is a mathematical measure of inequality in a distribution. In the context of mining, we can use it to quantify the distribution of mining power among participants. A Gini coefficient of 0 represents perfect equality (everyone has the same amount of mining power), while a Gini coefficient of 1 represents maximum inequality (one participant has all the mining power).
Now, let's consider a scenario where a #sidechain introduces a highly profitable mining method that requires expensive hardware, creating an economic incentive for miners to switch. This can indeed lead to centralization if only a few entities can afford the expensive nodes, resulting in an increase in the Gini coefficient for mining power distribution.
But, mathematically I don’t think this would happen early on the process if sidechain developers & researchers aim to strike a balance between innovation & preserving the fundamental principles of decentralization that underpin Bitcoin's security & robustness (Decentralized sidechain governance, different PoW algorithms for different sidechains, dynamic rewards & incentives for mainchain miners). But the idea of PoS should be avoid..
Federations holding custody & miners engaged in a #drivechain ecosystem can potentially draw regulatory scrutiny by being classified as 'money transmitters’.
For federations overseeing custody, the regulatory assessment hinges on the geographic location of each federation member. The legality & regulatory status of these federations are contingent upon the jurisdiction within which each individual member operates. This jurisdictional variance introduces a multifaceted legal landscape where the regulatory treatment of federations significantly depends on their geographical dispersion.
Similarly, in the scenario of miners participating in a #drivechain system, regulatory obligations akin to those of money transmitters can surface. These miners, while being integral to the drivechain's functionality, may be subject to regulatory classification as money transmitters based on their role in facilitating currency transfers between secondary & primary chains. both the federation custody model & the involvement of miners in drivechains introduce potential regulatory considerations, particularly in relation to money transmission activities. These nuances underscore the need for careful evaluation & adherence to regulatory frameworks that vary based on geographic jurisdiction & specific operational roles. nostr:note1pevzc2v9teflqedqchr6fp0kaup96wnnwknfef47pk5czkd3d8vql9shwx
In a 2-Way Peg (2WP) mechanism, certain operational aspects can attract regulatory attention, particularly related to the unlocking of 'secondary currency'. This process might be misconstrued by regulators as the creation of new currency rather than a straightforward transfer. This misinterpretation could arise from a surface-level analysis, especially if the currency on the secondary chain is initially generated in a locked state & subsequently unlocked during transfers.
When the secondary chain incorporates smart contract capabilities & a sidechain contract is established, the transition of funds from Bitcoin to the secondary chain's currency becomes a fully automated process. Even if a federation is in custody of the transferred funds, it lacks the capacity to prevent this automated transfer. This dynamic bears resemblance to the scenario where an individual receives a Bitcoin payment, where the recipient has no means to intervene & consequently, can’t be held accountable for the origins of the funds.
So, if the secondary chain's structure enables autonomous transfers & smart contract execution, the regulatory concern over the unlocking of secondary currency as a potential act of currency creation loses its footing. Instead, the process mirrors the inherent nature of Bitcoin payments, where recipients are passive participants without the capability to exert control over the funds' origin. nostr:note10a0aujtpzkg83uqrkr5rqlp2ql9rw6tttdxrrv3w5jath8gk4kxshwtklz