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Step through this with me... I've got 5 Bitcoins. I transfer all of them to a new sidechain for 50 Sidecoins. This Sidecoin sidechain has a different block rew

Step through this with me... I've got 5 Bitcoins. I transfer all of them to a new sidechain for 50 Sidecoins. This Sidecoin sidechain has a different block reward. Let's say 3 weeks go by. Now there are 10,000 total Sidecoins. Let's say I've got 2,000 of those Sidecoins because I've sold the rest. How do I convert them back to Bitcoins? Can I only transfer 50 back? Can I transfer all 2,000 back? What are they worth in Bitcoin now?

jdmichal 12y ago
You freeze your 2000 Sidecoins. That is then converted into some number of Bitcoins, the conversion of which is entirely dependent on how the Sidecoins work. (Likely the ratio of the number of Bitcoins dedicated to the sidechain to the number of existant Sidecoins.) A transaction is then submitted to the main chain, submitting the required proofs that you have frozen / destroyed the appropriate amount of Sidecoins to unfreeze a number of Bitcoins. If the number of Bitcoins trying to be created exceeds the number committed to the sidechain, the transaction will fail. Otherwise, it will succeed.
- williamcotton 12y ago
  So the main Bitcoin network needs to be aware of and to be able to analyze the entire Sidecoin sidechain? So if only a total of 5 Bitcoin were ever sent/frozen to the sidechain, then only 5 Bitcoin can ever be retrieved/unlocked? So when the Sidecoin sidechain was first created each Sidecoin was worth 0.1 Bitcoin. So after three weeks there are now 10,000 Sidecoins, each worth 0.0005 Bitcoin? Is this a general rule for sidechains? Why did you say "likely"? Is that because none of the details of sidechains have been worked out? Transactions on sidechains are mined in to blocks, right? So if someone mined 8,000 Sidecoins of those 10,000, they've now got 4 Bitcoin? If someone then sent/froze an additional 5 Bitcoin to the Sidecoin sidechain, then that would generate 10,000 new Sidechains? So the incentives to mine Sidecoins would correspond to the total number of Bitcoin that has been sent to the sidechain? If 5 Bitcoin were only ever sent to Sidecoin, then all the mining in the world could only ever lead to a total of 5 Bitcoins? So for Sidecoins to be economically viable and therefor functional, someone would need to be constantly injecting Bitcoin in to the sidechain, right?

jdmichal 12y ago

You freeze your 2000 Sidecoins. That is then converted into some number of Bitcoins, the conversion of which is entirely dependent on how the Sidecoins work. (Likely the ratio of the number of Bitcoins dedicated to the sidechain to the number of existant Sidecoins.) A transaction is then submitted to the main chain, submitting the required proofs that you have frozen / destroyed the appropriate amount of Sidecoins to unfreeze a number of Bitcoins. If the number of Bitcoins trying to be created exceeds the number committed to the sidechain, the transaction will fail. Otherwise, it will succeed.

williamcotton 12y ago
So the main Bitcoin network needs to be aware of and to be able to analyze the entire Sidecoin sidechain? So if only a total of 5 Bitcoin were ever sent/frozen to the sidechain, then only 5 Bitcoin can ever be retrieved/unlocked? So when the Sidecoin sidechain was first created each Sidecoin was worth 0.1 Bitcoin. So after three weeks there are now 10,000 Sidecoins, each worth 0.0005 Bitcoin? Is this a general rule for sidechains? Why did you say "likely"? Is that because none of the details of sidechains have been worked out? Transactions on sidechains are mined in to blocks, right? So if someone mined 8,000 Sidecoins of those 10,000, they've now got 4 Bitcoin? If someone then sent/froze an additional 5 Bitcoin to the Sidecoin sidechain, then that would generate 10,000 new Sidechains? So the incentives to mine Sidecoins would correspond to the total number of Bitcoin that has been sent to the sidechain? If 5 Bitcoin were only ever sent to Sidecoin, then all the mining in the world could only ever lead to a total of 5 Bitcoins? So for Sidecoins to be economically viable and therefor functional, someone would need to be constantly injecting Bitcoin in to the sidechain, right?