Date: Tue, 14 Jan 2020 02:59:25 +0000
To: Robin Linus <robinlinus@protonmail.com>
From: ZmnSCPxj <ZmnSCPxj@protonmail.com>
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Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] Coins: A trustless sidechain protocol
Precedence: list

Good morning Robin,


> > because all users must process all transactions within the blockchain
>
> Reality shows, that's wrong. Bitcoin's security doesn't require verificat=
ion to scale quadratically with users. Since the whitepaper, Satoshi was ex=
plicit about that phenomena. We can discuss nuances, yet it's overall plaus=
ible and empirically it's true: Only a tiny minority of users ever verifies=
 the blockchain, still bitcoin works perfectly well. An honest economic maj=
ority is sufficient.
>
> Yes, if you can, run your own node. Let's lower the barriers and let's he=
lp others to run their own nodes. Let's keep the blocks small and bitcoin's=
 UTXOs set verifiable with consumer hardware. That's the core of decentrali=
zed security.
>
> But let's face it: most people on this planet will never run a bitcoin fu=
ll node. And it is not required.
>
> Bitcoin-backed PoS-sidechains scale in terms of verification and storage =
just like any other blockchain. However, security is strictly better becaus=
e double-spends are impossible. A single honest validating user guarantees =
that attackers cannot do more harm than halting a sidechain. Thus, endusers=
 won't have to validate all of each others' transactions at all.
>
> For most endusers such sidechains' security is strictly superior to today=
's LN experience.
>
> Let's face it: The most popular LN apps are fully custodial.
> They have to be custodial because there is no way to make LN usable for r=
egular users on unreliable phones.
>
> Any payment channel which requires you to be always online excludes 99% o=
f the world's population.
> Any payment channel which potentially requires you to be able to pay high=
 on-chain fees excludes most people, too. And on-chain fees keep rising.
>
> Thus, no matter what Channel Factory constructions we build, they will no=
t match most people's requirements. We will keep falling back to custodial =
solutions.
> Excel tables connected to the LN. The LN is awesome as a settlement layer=
. In particular for anything like bitcoin banks that have been discussed si=
nce the beginning.
> But why 1000 trusted Excel tables if we can have 1000 trustless sidechain=
s?

First:

>  A single honest validating user guarantees that attackers cannot do more=
 harm than halting a sidechain.

Is not compatible with:

> 1000 trustless sidechains

You are *tr\*sting* that there exists at least ***one*** ***honest*** user =
per sidechain.
Thus it is not a trustless solution, but a tr\*sted one.
Replacing 1000 tr\*sted Excel tables with 1000 tr\*sted blockchains is the =
same class of error as replacing the banking system with centralized large-=
scale blockchains: you gain the drawbacks of blockchains without gaining it=
s benefits.

The security, integrity, and censorship-resistance of Bitcoin is dependent =
on there existing some sophisticated actors ("persons") who are willing to =
take on the risk of running fullnodes and providing hashpower.
This is the Risk-Sharing principle, by which the risk of keeping Bitcoin ru=
nning is spread out among many persons who are willing to keep Bitcoin aliv=
e.
The existence of such actors cannot be assured, but it seems to me that fra=
gmenting the entire community of such limited number of actors would not gi=
ve good risk-sharing within a sidechain.

Regards,
ZmnSCPxj