So I keep seeing all these articles popping up in r/bitcoin about how sidechains will replace altcoins and bitcoin 2.0 platforms. I don’t know anything about this, so does Peercoin have anything to fear from this, since we’re based on proof-of-stake instead of proof-of-work? Here is one of the articles…
http://www.reddit.com/r/Bitcoin/comments/22osm1/adam_back_sidechains_can_replace_altcoins_and/
Ken said this in chat, just so it’s recorded…
When Peercoin develops properly I do not see something to fear about. Therefore Peercoins needs to include further innovations and we must ask ourselves what do people who have not used Peercoin yet want a cryptocurrency to be like or find more useful in Peercoin compared to other cryptocurrencies. In my opinion Peercoin should be anonymous, easy to use, compact and secure.
I see different improvements for Peercoin that need to be implemented in addition to cold locked transactions:
Anonymity
Peercoin should help to allow users to decide which coins they want to spend. This means the Peercoin Qt should never by default use any Peercoins from all addresses which received Peercoins because you disclose all the Peercoins you have to somebody you pay and also all trasactions you made to somebody you pay in a which is annoying.
->Peercoin needs to allow users to decide which coins they want to spend in a transaction.
Ease of use
Another feature that is missing is the problem that you can only use one wallet at the same time in your Peercoin client. Would it not be better to allow users to open wallet files in a tab and allowing multiple tabs like in a browser: One small one (with a password you can remember) and one big (secured by a large password) or many more.
->Peercoin needs to support multiple wallets.
Compact
Due to the transaction fee fixed at the moment at 0.01 PPC, Peercoin is not a spam transaction currency like Dogecoin. This helps to keep the Peercoin client small since the blockchain, which all users must download before using Peercoin, stays small. But in my opinion Peercoin is not taking advantage of this. The blockchain is small and therefore well suited for mobile phone but we are missing an Android and I-Phone App to bring Peercoin to people who just want to use a Peercoin in daily life without a large computer next to them. And by use I do not only mean doing small transaction, I mean big trades (>1000 USD) like exchanging Peercoin directly for the money in your country without using Bitcoin or another intermediate.
->Peercoins should use its non-spam blockchain to its advantage.
Secure
Peercoin is quite secure and environmental friendly due to Proof of Stake Minting and secure against 51% Proof of Work attacks. This is a great plus I see in Peercoin. But since the Proof of Work mining is using only SHA256 instead of Scrypt there are only very few people who are actually mining Peercoin which is not helpful to get a large number of users by attracting them to mine. Therefore I think Peercoin should smoothly switch to a Scrypt mining which is ASIC-proof by changing the Scrypt parameters like in Vertcoin.
-> Peercoin should not rest on its laurels.
My last words in this post
We should not stay where we are all the time while the rest of the world develops rapidly. They key of success is adaption.
[quote=“Sentinelrv, post:1, topic:2196”]So I keep seeing all these articles popping up in r/bitcoin about how sidechains will replace altcoins and bitcoin 2.0 platforms. I don’t know anything about this, so does Peercoin have anything to fear from this, since we’re based on proof-of-stake instead of proof-of-work? Here is one of the articles…
http://www.reddit.com/r/Bitcoin/comments/22osm1/adam_back_sidechains_can_replace_altcoins_and/[/quote]
No need to worry I say. Side-chains will be merged mined by Proof-Of-Work miners and the mathematical movement of coins from one chain to the other (which I think is an excellent idea) in atomic operations. This implies that Bitcoin still suffers from using PoW and that the side-chain will also be using PoW, so neither the side-chains or the main-chain will compete with what Peercoin does.
I even want to go as far as arguing that in terms of decentralization, side-chains are a step in the wrong direction. Since the chains will be merged mined, Bitcoin miners will be even more powerful. Now Bitcoin miners will get revenue from even more transactions and if something goes wrong with the main Bitcoin chain the effect will be more damaging.
Just think about it… tons of new alt coins is born and dies everyday, but Bitcoin is not affected by this. But, if we have tons of new side-chains being born and then suddenly something goes wrong with Bitcoin main chain?!
Okay, so this guys are really smart and knows crypto. They are smarter then me and know more things then me. Still, I think they are just so very wrong about the importance of limiting the Bitcoin supply. That’s basically what the whole side-chain is about, capping the supply of coins. They want to cap the supply of coins to create scarcity, because it will ensure that the value of the units powers highers. Personally, I think it is up to the market to decide what value a coin should have. If there are many competing coins, this is good because it will force the technologies to compete with one another. If we only have Bitcoin, there is nothing to compete against, only the miners trying to compete and fight over market share.
The thing about crypto currencies that I think a lot of technicians and mathematicians simply don’t get, is that crypto currencies are as much about economy as it is about math and tech. Why in the world would we want only one currency, that if it fails bring down everything? What I want, is distribution of power.
Anyway, side-chains might kill some PoW alt coins that tries to compete with Bitcoin. I’ve personally sold all of my litecoins and bought peercoins instead and when reading about side-chains, I can only think I did the right thing. Litecoin is typically the kind of alt coin that could die now, since they will offer basically nothing that Bitcoin does not have (a lite-side-chain could offer faster tx propagation). If more alt coins implodes because of this, then there is more money that will be diverted to Peercoin.
My take on it, is that side-chains are a good thing for the price of Peercoin. Oh and one more thing, Bitcoin side-chains can not create new bitcoins, so the Bitcoin side-chains can not compete with Peercoin in that way either.
Disclaimer: I might be totally wrong about everything, because I really do not have a clue about what I’m talking about.
EDIT: I’m not bashing side-chains and saying that it is all bad. I think it could be useful. Maybe Peercoin could use a side-chain which deals with anonymity or something. Instead of implementing stuff like that on main, it could be created on a side-chain where that kind of stuff could take place.
In the interview with on Lets Talk Bitcoin, they said they it would be merged mined and that they had already engaged Bitcoin mining pools. (Don’t take my word for it: http://letstalkbitcoin.com/e99-sidechain-innovation/#.U0b4PlQW3Zg )
They also said that it is a mathematical operation and that the operation has to be atomic (or did I read that somewhere?). Not knowing to much about these things, I figure that merged mining would be required to do that. But here I’m neck deep in water, almost drowning in ignorance here. So don’t believe me. But the interview they definitely said it was going to be merged mined.
If Bitcoin is Sauron, what is Peercoin? Ents maybe?
If Bitcoin is Sauron, what is Peercoin? Ents maybe?[/quote]
Frodo. We’re going to throw their coin in Mt Doom. 
I agree with what pillow has said. The energy efficiency and inflation model of Peercoin don’t get along with sidechained bitcoin as it seems.
I just read about the sidechain in details today. So I don’t know it well yet. I posted my idea of an avatar coin for Peercoin here http://www.peercointalk.org/index.php?topic=2625.msg22422#msg22422 It looks like the side chain is just made for the transactional avatar coin of Peercoin. Peercoin can turn the table and have its own sidechains, to solve its own problems.
Sidechains won’t kill off altcoins. It will create altcoin squared. ;D
[quote=“mhps, post:8, topic:2196”]I agree with what pillow has said. The energy efficiency and inflation model of Peercoin don’t get along with sidechained bitcoin as it seems.
I just read about the sidechain in details today. So I don’t know it well yet. I posted my idea of an avatar coin for Peercoin here http://www.peercointalk.org/index.php?topic=2625.msg22422#msg22422 It looks like the side chain is just made for the transactional avatar coin of Peercoin. Peercoin can turn the table and have its own sidechains, to solve its own problems.
Sidechains won’t kill off altcoins. It will create altcoin squared. ;D[/quote]
I guess the side-chain patch can be cherry-picked, but applying it to Peercoin wont be as easy I guess. I mean, should side-chain be able to mint(if not, side-chains will have to offer other economic incentives)? What about moving minted coins back to main?
Anyone out there if this will be possible to sort out?
In many respects, we already have a side-chain solution attached to Peercoin that is far closer to being ready for consumption: Peershares.
[quote=“pillow, post:9, topic:2196”]I guess the side-chain patch can be cherry-picked, but applying it to Peercoin wont be as easy I guess. I mean, should side-chain be able to mint(if not, side-chains will have to offer other economic incentives)? What about moving minted coins back to main?
Anyone out there if this will be possible to sort out?[/quote]
I was thinking in the line of using the sidechains mechanism to create and destroy the avatar coins and let third party entities handle the transaction clearing and other services. Satoshi has already seen this in his whitepaper. Most non-internet daily transactions are done best with facilities already exist – debit/credit card, checks, and cash (yes a payment service can issue cash backed by cryptocurrencies).
mhps, I like your concept. I had a similar idea too some months ago (“MicroPPC” for microtransactions, to solve the problem of the high transaction fee), but as I am not a developer/programmer I could not make a detailed proposal. But now we have the proof that something like this is possible. But I’m also curious if Proof-of-Stake does create problems when porting it to PPC.
I definitively must read more about Peershares, still haven’t understood it completely :-\
That was my first thought which came up when I read about it. Nothing new in our world. We are going to beat them all with this concept 
Edit: Peershare is just an implementation of this concept. Other implementations are still possible e.g. for microtransactions.
Absolutely. I’m hoping that Peershares is only the first of a number of innovative forks of the Peercoin codebase that will enable lots of different tools to be built.
Being the first makes bitcoin 30 times more valuable than the second place cryptocoin. Hope Peershares will do at least just as well.
its just a non issue. PeerCoin set out to do quite a different thing to BTC in a different market. The side chains of BTC will find it hard to meet PeerCoin on its terms.
BTC is like retail banking, PeerCoin is commercial high networth/banking, large transfers, long term etc.
PeerCoin stands apart from everything else at the moment. Black Coin is trying to emulate some features of PeerCoin, but it has stopped the POW to early
I agree. I’m not saying sidechains will not be beneficial, I just think the community wants variety.
Bumping the thread with some feedback on sidechains by P. Todd. I’m not that informed, but his critique against sidechain is interesting. He also proposes another way of doing things (tough still depending on PoW).
http://letstalkbitcoin.com/ltb104-tree-chains-with-peter-todd/#.U14TilQW3Zg
Is it only me, or is the community slowly realizing the issue with centralization? I remember when Lets Talk Bitcoin first launched. Both Adam and Andreas was totally against AltCoins and had more or less zero faith in them. They were basically arguing that Bitcoin was super perfect and had the network effect, so it would prevail.
On this latest episode (link above), Adam comes across as someone who have major belief in the benefit and future of AltCoins and Andreas says that in light of new information he have also changed his mind.
I’ve written several times to Adam and told him to do an episode about P2PPool and talk some more about the issues with centralization, but he have ignored it. This was several months ago. Now he has apparently started to realize that centralization actually could be an issue.
Why is the intressting to me? Well, I think of Adam as someone who is willing to change his mind. Same with Andreas. They seem to be able to adapt their thinking as they learn more. Both being early adopters, slowly coming around to AltCoins and perhaps even realizing the issue with centralization could be a sign that even hardcore Bitcoin believers are starting to get the drift, open their eyes and look around for other options.
Centralization IS the big pink elephant in the room that everyone knows about, yet not many are talking about.
How do you secure the Bitcoin network? You do that by getting as much people to invest money as possible in hardware. Why? Because the purpose of hardware is to run Proof-of-Work which is supposed to ensure decentralization, but the economic reality is that PoW incentives centralization.
Peercoin on the other hand is the total opposite. The more people that buy coins (instead of hardware) the more decentralized and the greater incentive to participate in minting.
It’s good to see that people are able to change their mind if they get aware of more information or evaluate things differently. I better don’t tell you how often I changed my mind (regarding good or bad concepts; good or bad implementations etc) 
But Peercoin stands out as a kind of lighthouse in a troubled sea of crypto coins. The more I know about peercoin and the better I understand it, the more I believe in it (with one exception: I consider no modest security role by the PoW process a wrong decision; but that’s a different story…).
Peercoin is imho one of the most important advances since Bitcoin.
And I’m glad that Peershares decided to rely on Peercoin!
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