Date: Thu, 31 Aug 2023 00:16:25 +0000
To: ryan@breen.xyz
From: ZmnSCPxj <ZmnSCPxj@protonmail.com>
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Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] Sentinel Chains: A Novel Two-Way Peg
Precedence: list

Good morning Ryan, et al.,

My long-ago interest in sidechains was the hope that they would be a scalin=
g solution.

However, at some point I thought "the problem is that blockchains cannot sc=
ale, sidechains means MORE blockchains that cannot scale, what was I thinki=
ng???"
This is why I turned my attention to Lightning, which is a non-blockchain m=
echanism for scaling blockchains.

The only other reason for sidechains is to develop new features.

However, any actually useful features should at some point get onto the "re=
al" Bitcoin.
In that case, a sidechain would "only" be useful as a proof-of-concept.
And in that case, a federated sidechain among people who can slap the back =
of the heads of each other in case of bad behavior would be sufficient to d=
evelop and prototype a feature.

--

In any case, if you want to consider a "user-activated" sidechain feature, =
you may be interested in an old idea, "mainstake", by some obscure random w=
ith an unpronouncable name: https://zmnscpxj.github.io/sidechain/mainstake/=
index.html

Here are some differences compared to e.g. drivechains:

* Mainchain miners cannot select the builder of the next sidechain block, w=
ithout increasing their required work (possibly dropping them below profita=
bility).
  More specifically:
  * If they want to select a minority (< 50%) sidechain block builder, then=
 their difficulty increases by at least one additional bit.
    The number of bits added is basically the negative log2 of the share of=
 the sidechain block builder they want to select.
  * The intent is to make it very much more unpalatable for a sidechain blo=
ck builder to pay fees to the mainchain miner to get its version of the sid=
echain block confirmed.
    A minority sidechain block builder that wants to lie to the mainchain a=
bout a withdrawal will find that the fees necessary to convince a miner to =
select them are much higher than the total fees of a block.
    This better isolates sidechain conflicts away from mainchain miners.
* Miners can censor the addition of new mainstakes or the renewal of existi=
ng mainstakes.
  However, the same argument of censorship-resistance should still apply he=
re (< 51% cannot reliably censor, and >=3D51% *can* censor but that creates=
 an increasing feerate for censored transactions that encourages other pote=
ntial miners to evict the censor).
  * In particular, miners cannot censor sidechain blocks easily (part of th=
e isolation above), though they *can* censor new mainstakers that are attem=
pting to evict mainstakers that are hostile to a sidechain.

There are still some similarities.
Essentially, all sidechain funds are custodied by a set of anonymous people=
.

One can consider as well that fund distribution is unlikely to be well-dist=
ributed, and thus it is possible that a small number of very large whales c=
an simply take over some sidechain with small mainstakers and outright stea=
l the funds in it, making them even richer.
(Consider how the linked write-up mentions "PoW change" much, much too ofte=
n, I am embarassed for this foolish pseudonymous writer)

Regards,
ZmnSCPxj