Re: [Bitcoin-development] Tree-chains preliminary summary

[Mark Friedenbach <mark@monetize.io>]

I'm afraid I'm going to be the jerk that requested more details and then
only nitpicks seemingly minor points in your introduction. But its
because I need more time to digest the contents of your proposal. Until
then:

> But moving value between chains is inconvenient; right now moving
> value requires trusted third parties. Two-way atomic chain transfers
> does help here, but as recent discussions on the topic showed there's
> all sorts of edge cases with reorganizations that are tricky to 
> handle; at worst they could lead to inflation.

This isn't true. The re-org issue is fairly handled in the 2-way pegging
scheme that Greg Maxwell developed and Adam Back described a week ago on
this list. Depending on the implementation it could even be configurable
by the person performing the peg too - allowing the transfer to specify
the confirmation depth required during the quieting period in order to
protect against re-orgs up to a sufficient depth. I think this is worked
out quite well with sufficient enumeration of edge cases, and I don't
think they are particularly tricky to handle or lead to money-losing
situations under the explicit security assumptions.

More importantly, to your last point there is absolutely no way this
scheme can lead to inflation. The worst that could happen is theft of
coins willingly put into the pegging pool. But in no way is it possible
to inflate the coin supply.

I will look at your proposal in more depth. But I also think you should
give 2-way pegging a fair shake as pegging to side chains and private
accounting servers may eliminate the need.