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Reading through BIP 301. My first suggestion that it needs PR page so people can comment and ask questions openly, but I have some questions already.
First a check to see if I understood the BIP correctly. This may work as an easy to understand bullet point list in the future if correct.
.'s indicate confidence, ?'s indicate lack of confidence in my understanding
The sidechain is its own blockspace. The sidechain is its own blockchain. The sidechain has to spend Bitcoin in order to transact on the sidechain? The sidechain uses mainchain solutions for its own security (but how does it fit its own transactions into a block. Any change to a block changes its hash value which would require the work of finding a nonce to get the hash value to have the number of leading zeros to prove work.)
Okay now for questions: Do sidechains have their own tokens? I think the Bitcoin community would be upset at the idea of something that enables ICOs on Bitcoin Can sidechains be used for scams like HEX or otherwise have a portion of the transaction fee go to an address (usually the founder address) How would Blind Merged Mining compete with Lightning Labs Taro (source: https://docs.lightning.engineering/the-lightning-network/taro) which yes does the thing I'm worried about with BMM as seen above.
Ultimately, even if the BIP doesn't get accepted, I genuinely think its wonderful when people work hard to improve Bitcoin.
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I got a response:
Easier if you join the telegram t.me/DcInsiders
The sidechain is its own blockspace. Yes
The sidechain is its own blockchain. Yes
The sidechain has to spend Bitcoin in order to transact on the sidechain? Yes. Let us label the coins on the sidechain "SC2" and the coins on the mainchain "BTC". The mainchain world can only see "BTC". The sidechain world only sees "SC2" in its blockchain, although it can also see into the mainchain blockchain where "BTC" lives.
The sidechain uses mainchain solutions for its own security (but how does it fit its own transactions into a block. Any change to a block changes its hash value which would require the work of finding a nonce to get the hash value to have the number of leading zeros to prove work.)
The sidechain's block has does not have leading zeroes. Only the mainchain's block is fixed.
Do sidechains have their own tokens?
They can, such as my BitAssets sidechain. Or they cannot, such as my zCash sidechain.
Can sidechains be used for scams like HEX or otherwise have a portion of the transaction fee go to an address (usually the founder address)
Yes and yes.
How would Blind Merged Mining compete with Lightning Labs Taro
Taro is a lot like the BitAssets sidechain. Assets on Taro (or RGB) have no objective existence anywhere, you need to be shown a proof of something (and you need the verifier) in order for you to observe them. There is no global state.
Paul
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When I next see paul I would like to ask him about this last paragraph regarding the need to see "a proof of something in order for you to observe them"
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Should people use Liquid more?
I'm a big fan of Liquid, I think in a lot of cases the tradeoffs are much better than Lightning. Self-Custody without running a complex server app, for example.
I actually find it kind of odd that bitcoiners are all-in on lightning and barely ever use/discuss liquid. Am I missing something?
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I don’t know as much about Liquid as I should.
One of the most interesting parts of Lightning to me is that there seems to be real traction that accelerates every month across dozens of apps and wallets.
Where can I go to see some of the emerging apps being built on Liquid?
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I poked around a little bit and I can't find much. TDex is a decentralized exchange that might be interesting. People are also doing shitcoins and NFTs on liquid.
But that's not what I'm talking about. I'm talking about 1) the bitcoin circular economy, and 2) HODLing. And especially people who like to do both. It is basically like on-chain bitcoin but faster and more private, and the trade-off is the risk that a majority of the 50 entities in the federation decide to attack you.
Compare that with running a lightning node. Not custodial lightning, but running a node. Huge pain in the ass, and privacy is still mediocre.
Fedimints may blow all of this out of the water. We shall see.
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Found one project building on Liquid that looks pretty interesting.
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I genuinely, don't even know how to use liquid
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Does one require the permission of the side layer to send your bitcoin back to the blockchain?
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Hmm I need to really think about this one. Maybe think of other solutions as well
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