Why Every Altcoin Is a Failed Sidechain
Look at any altcoin launched since 2011 and you'll find the same story. A small team has an interesting idea: privacy, smart contracts, faster blocks, a new consensus algorithm. They want to test it. But Bitcoin moves slowly and conservatively, so they spin up a new chain, print a new token, and ask the world to bootstrap a fresh security budget from scratch.
That last step is the tragedy. The idea may have been brilliant. The execution may have been competent. But the security model is now a function of how many speculators show up, not how much hash power Bitcoin already commands. The experiment is conducted on a chain that no one would trust with a meaningful sum.
Sidechains were always the right answer
Paul Sztorc's insight, going back to his early Truthcoin work, is that nearly every altcoin is solving a problem that doesn't require a new monetary asset. It requires a new execution environment. A privacy chain doesn't need its own coin: it needs a place where private transactions can happen, denominated in bitcoin, secured by bitcoin's miners.
A drivechain is exactly that. Bitcoin holders can move BTC into a sidechain that implements any rules its designers want. When they're done, they move the BTC back. The sidechain can fail completely and Bitcoin's main chain doesn't notice.
The miner alignment problem
Critics of drivechains worry about miner power. But the alternative is worse: today, every altcoin extracts fees and seigniorage from Bitcoin's social bandwidth without paying Bitcoin's miners a cent. Under BIP-300, the miners who already secure Bitcoin would collect fees from every sidechain experiment too... meaning the security budget grows with the ecosystem instead of fragmenting across it.
That's the thesis of this blog. Two essays a week, exploring why a Bitcoin with drivechains eats every altcoin not through hostility, but through gravity.