Re: [Bitcoin-development] 2-way pegging (Re: is there a way to do bitcoin-staging?)

[Gregory Maxwell <gmaxwell@gmail.com>]

On Sun, Mar 16, 2014 at 3:58 PM, Adam Back <adam@cypherspace.org> wrote:
> 2. you move coins to the side-chain by spending them to a fancy script,
> which suspends them, and allows them to be reanimated by the production of
> an SPV proof of burn on the side-chain.

One point to note here is that the if the whole move and quieting
period stuff sounds
cumbersome— thats because it is. Even with the best efficiency optimizations the
security requirements result in somewhat large and slow transactions—
and thats totally fine!

A key point here is that normally someone who needs to use coins on one chain or
the other can use fast atomic cross-chain transactions[1][2] and not
bother with the
slow direct movement across. The cross chain swapping, however, requires an
(untrusted) counterparty on the other chain, while the 2-way peg migrations can
be performed alone in order to provide liquidity and balance demand.


[1] https://en.bitcoin.it/wiki/Contracts#Example_5:_Trading_across_chains
(Hm the citation there is weird, that predates TierNolan's post)
[2] https://bitcointalk.org/index.php?topic=321228.0
CoinSwap: Transaction graph disjoint trustless trading
(private version)