I understand it is difficult to realise PoW security txs cost when it is mostly subsidized via inflation. In fact, @brucefenton is trying to solve a problem that wasn't solved before, although the technology has been available, just because the incentives were not big enough.
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You just need to look at how HFT trades execute in nanoseconds to understand that when the right incentives exist, transactions happen much faster.
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Replying to @fnietom @brucefenton and
I understand that. My point is, that perhaps Bitcoin gives you enough infrastructure that something that was previously didn't pass cost/benefit threshold, now does.
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Replying to @sbelak @brucefenton and
Using Bitcoin network is problematic because colored coins could mess up incentives, but what
@brucefenton did is to create an independent shitcoin specific for this purpose, so he cannot leverage Bitcoin existing infrastructure/security.2 replies 0 retweets 0 likes -
Replying to @fnietom @brucefenton and
I don't have a particular horse in this race, just find Bitcoin-as-infrastructure fascinating. If the assets the coloured coins represent would be denominated (and traded) in BTC, it wouldn't mess up incentives.
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Replying to @sbelak @brucefenton and
Fernando Nieto Retweeted Pieter Wuille
Some knowledgeable people think different...https://twitter.com/pwuille/status/981868137741258752 …
Fernando Nieto added,
Pieter Wuille @pwuilleReplying to @brucefenton @MrHodl and 3 othersIt's complicated. Mined blockchains dealing with transactions in other currencies than the mined coin is incentive incompatible: you risk a chain that gets filled with transactions that don't benefit (and compete with) the mined coin, reducing its value, and thus its security.2 replies 0 retweets 0 likes -
Replying to @fnietom @brucefenton and
That's why I said denominated in BTC. Also since Bitcoin is permissionless if there exists such an incentive attack it will happen sooner or later and dissuading legit use cases is probably not the best nor strongest defence.
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Replying to @sbelak @brucefenton and
Not sure what you mean by 'denominated in BTC'. I don't think it is easily exploitable as an attack but seems to be a reason to discourage that path. I don't have any deep knowledge about that matter anyway.
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Replying to @fnietom @brucefenton and
I mean that for each coloured coin transaction there is a counterparty transaction in BTC ("going the other way").
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Replying to @sbelak @brucefenton and
I don't think I follow. How would you restrict transactions involving only the colored coin or trading between issued assets?
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You (ie. the lower-level chain) can't, the cc implementator can. I'm just exploring how you can make a well-behaved cc implementation for assets. This is in no way a claim that all cc are legit, just that it can be and that it can make economic sense to do it.
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