Yesterday, @grubles of Blockstream blocked me for saying that
1) Liquid is not a sidechain by any definition that doesn’t also include Coinbase
2) a definition that DOES include Coinbase is so wide that it’s meaningless

I’ll argue both of my statements are true and you should stop calling Liquid a sidechain.

Let's start by defining what a sidechain even is:
https://blockstream.com/sidechains.pdf 

A sidechain was first introduced as a “technology to support the movement of assets between blockchains” with the two key properties:
1) only the current owner of a coin can withdraw it
2) the withdrawal of a coin cannot be blocked

In short, it should be trustless.

The goal was to implement this with a “bidirectional peg”. To do this form of peg-out, Bitcoin needed to be able to verify the other blockchain’s proof-of-work. This capability would have required a change to Bitcoin that later turned out infeasible.

Now you could think that the idea of the sidechain died together with the hope for this script extension. But this is not what happened: Blockstream simply relaxed the definition of a sidechain so it no longer needs to be trustless.

They did this by launching Liquid with a closed federation of 15 block producers rather than an open PoW chain. In this system, 11 of 15 operators can steal your coins at any time.

Further, there’s a second federation of 3 (think: admin keys) after consensus has stalled for two weeks. Since it needs 11 of 15 operators to make a new block, 5 of them can stall the blockchain indefinitely, and then 2 of 3 admins can steal your coins as well.

Even Blockstream calls this a trusted system AND a sidechain, so what’s their new working definition? Simple: a sidechain is now any chain of blocks. Let that sink in.

Even grubles admitted that coinbase is “technically a sidechain” as long as they somehow bundle database updates into blocks on the backend. https://twitter.com/notgrubles/status/1276297188746952704?s=20

In the past, no one has argued harder than the Bitcoin community that the term blockchain is actually meaningless - and rightly so. It says nothing about the properties of a system we are trying to describe. All that matters is the trust model.

A sidechain was once considered distinct from a blockchain because users could transfer assets trustlessly between chains. This distinction is now gone, and a sidechain and a blockchain have morphed into the exact same thing.

I'm not going along with this because calling Liquid a sidechain is equivalent to calling XRP or Libra a cryptocurrency. The defining feature of a cryptocurrency is not a token on a blockchain, but a system that operates with very little trust.

Can we at least call Liquid a “federated sidechain” then? Once again, this would be the same as a “federated cryptocurrency” - a thing that, by definition, cannot exist.

This analysis shows why statements 1) and 2) are correct.

Finally, this thread makes zero value judgments about Liquid as a project and shouldn't be read as such. Trusted systems will be essential to scaling Bitcoin, and Liquid is in many ways better than centralized exchanges.

All I'm saying is I'd much prefer if Blockstream could market Liquid as a project based on its own merits instead of calling it a Bitcoin sidechain.

Finally, I hope laying out my rationale here can convince some people it is not just a "social attack" from a disgruntled "Ethereum fan"
https://twitter.com/notgrubles/status/1276239279119835138?s=20

I realized that if I criticize one definition, I should also suggest a replacement.

I see Liquid as an inter-exchange payment system.