Exchange price vs. resource price

Autonomi Network Token (incl (e)MAID)
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What I mean here is that Farmer and User are separate entities. So there’s no inherent mechanism to credit the resource a Farmer supplies to the User account, except for the User to purchase it with safecoin, however acquired (farmed or purchased).

(Figuring the Farm Rate and Resource Price are a different matter, especially the Resource Price, considering the potential complication of an out of proportion external fiat exchange for safecoin. At the moment I’m trying to clean up the accuracy of our terms and making sure they align with reality, so that we can get a straighter look at what we’re trying to deal with.)

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Could somebody please explain what the current planned mechanism is to find resource price is, or does this not exist yet?

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Still under discussion. It’s a bitch.

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Ok, thanks, I’ve been thinking of ideas in this thread, then wondered if I was wasting my time Cheers

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Is there any way a dev could explain where we are presently up to on working out how to price resources? This thread is coming up with ideas but maybe needs a bit of input/direction or framework to constrain thoughts within.

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There are now already many threads already. As you can see from dates of comments it’s very much alive.
This one I started to with the idea to collect notes/ideas for a future version.

About your Bitfinnex comment earlier, here’s what was said about it on Reddit:

"It seems (and this is just a guess as there is no official comment from the exchange) as if Bitfinex is running an algorithm to handle the margin calls. The algorithm starts selling but limits itself to a 10% drop in prices within 1 minute. If prices drop more than 10% in 1 minute it will stop selling and wait for buy orders to come in. Once there are again a certain amount of buy orders in the orderbook the algorithm starts selling again until all margin calls are met.

This seems to be an interesting way to deal with cascading margin calls but can also be considered as borderline market manipulation from the exchange side. By spreading out the sell orders over time the downwards momentum is reduced, however traders end up trading against the exchange itself and not the market anymore.

I don’t know if this is a correct explanation, but Bitfinnex is a closed system and has certain features (like margin trading with borrowing from members of the pool) which probably “force” them to do this kind of stuff which seems “necessary” for them. But as far as I can tell these tricks don’t impact the global (external) price of bitcoin. Maybe issuing MaidSafe/Safecoins faster (similar to selling them to open market) would do the same thing for the SAFE network, but that seems dangerous to me (look at the Fed’s balance sheet now and who’s going to cover their losses if they one day decide to stop being a Ponzi and mark to market?).

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Ah…right, yes I was thinking about a sort of community war chest to achieve similar things - this would not be done by the exchange (to avoid the claims of manipulation) - the community would basically come together to support the resource price as measured against Safecoin on the in-built exchange. (which only deals in safecoin/resources. The external price will have no bearing on the resource price (in fiat terms) and the Safecoin price can look after itself on a separate decentralised exchange.
The main issue I see is how to bridge the internal network exchange to the de-centralised exchange. It would appear it would have to be built and in place at launch though - which luckily is planned.
Can you point out what you see as any main issues, technical or otherwise with how I’m looking at this?
Thanks

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A community war chest… It means (I suppose) MaidSafe.net as the operator would become some sort of hedge fund and you’d become an investor.
Any losses would be borne by the community (i.e. you). Of course that’s why no one would want to voluntarily participate in such community - they’d only like that there be a community financed by other people’s money so that they can freeload. Why would anyone voluntarily give their money to this operator when only meaningful activity the fund can make is to lose money (in order to stabilize the market)?
Because if this entity tried to make a profit to make up for occasional losses, who could tell they aren’t abusing their intimate knowledge of the platform? In theory these two activities would even out and the entity would make/lose $0, but
a) You’d then be lending them your money for free. Why would you want to do that? Not only you wouldn’t make any return, but in the worst case you could lose all of the money you gave to this entity.
b) If they somehow succeeded they’d have to earn more than they lose, so they’d have to work for profit which to me would seem really weird.
There are probably other, more important reasons, but I have to watch some TV now :wink:

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To ensure the network survives and help it take its baby steps until the market stabilises. I’m only referring to the resource/safecoin exchange too - not a full version.

I was just thinking have a back up reserve of Safecoin to use in extreme circumstances, managed by the foundation under the communities direction for a limited period of time. There’s a good chance of receiving funds back once markets have stabilised.
Anyway it was just an idea, as I thought all the main problems highlighted can be attributed to market volatility. You can look to solve the problem algorithmically, or you can look to other possible solutions I think.
I looked at the other thread but seems more about farming rewards and I don’t see where the bid/ask you mentioned comes into play. Cheers

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I have nothing against the idea as long as my money is not inside this fund.
(Milton Friedman once said there’s nothing as permanent as a temporary government measure).

Would the community would ask the Foundation to intervene whenever the price dropped down a bit. Or if it didn’t go up as quickly as it “should”?
As I understand it the Foundation would get (or hold?) 1% of all funds, which doesn’t seem nearly enough to significantly impact the market, but even if they just tried that would IMHO be a bad sign (again, look at the Fed geniuses with a 4 trillion balance sheet - who are they going to sell that garbage to?).

I don’t know - maybe someone could justify why this would work. Personally I think any intervention in these matters is bad.

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I think I finally grasp how things are intended to work and I agree with Janitor that there should be no free storage as it just complicates things massively.
It seems to me that there are 2 ways in which resource price can be arrived at:

  1. Based on how much “stock” of resource is available - ie lots of stock = cheap resources and scarcity of stock = expensive resources. This appears to be the intended method and is managed by the farming algorithm.
  2. Based on market forces - ie whatever people are prepared to pay for it on an exchange.

The price of Safecoin has no direct bearing on any of this.

Method 1 appears to not consider whether resources are priced competitively with other providers or not.- If we are cheaper, then no problem - if we are dearer, then users will go elsewhere I think.
Free storage will also increase resource price.
I know we’ve looked at users exploiting the free aspect as an attack, but wouldn’t millions of legitimate free users have a similar effect?
To my mind, dropping the free use aspect would simplify things technically and negate the need for the whole “unique human” thing.
Please correct me where I may have misunderstood anything.

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The Free amount has always been a thorny issue. I’ll go over some things we discussed for everyone’s consideration.

Non-Starter
Assume there was no crowd sale. So there are no Safecoins in existence.
In order for Safecoin to come in to existence, a farmer has to farm data. But in order for them to get data, Safecoin has to be paid by the user. So the user goes on an exchange to buy Safecoin. There are no Safecoins on the exchange because the farmer has no data to farm. We did have a crowd sale and there are Safecoins on the exchange, so maybe it won’t be a problem.

Mass Appeal
Nothing gets public participation like FREE. Some of the biggest networks let users contribute freely, via blogging, videos, audio, etc. If you had to pay to upload every video on youtube, how big would they be today? If you had to pay for every blog you wrote, how big would that forum grow? Something to consider.

Cloud Storage Competition
There are several cloud storage companies, offering a small FREE amount. A customer could encrypt their file before uploading it to the cloud to protect it from prying eyes. If we are not competitive to other cloud storage services, we lose that market share.

Storage Capacity
I was the first to warn about a DOS attack from storage overload. It is a real issue. We have weighed the risks to reward and are still in favor of the FREE amount. If the worst case happens, we can implement the POR system which is already in place. So yes, we have a parachute. I think we should try the Freemium Model and see what happens. There are also other measures created in the background, like archiving. And autonomous deletes which was recently discussed.

Professional Farmers VS Community Farmers
There will be pro farmers that go out and buy expensive hardware and setup high bandwith ISP. And there will be people who just want to be part of the project. Those are community farmers. I plan to be a pro farmer. But resource costs will be cheapest for community farmers. They are just monetizing their existing hardware.

Everyone is free to disagree which is what this community is about. Hopefully, you’ll consider these points. If enough people feel strongly against a Freemium Model, we’ll push to a vote.

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OK, you’ve sold me on the freemium model, this just leaves the part you mention which also ties into what I was saying:

How do we ensure this in the current model, without some form of exchange? This would clear things up enormously for me.

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Yes, someone must tend to be the pro farmer like the mine industry of bitcoin, eventually going into the stage of professional mining. This process will be like arsenal competitor. No matter the core team try to let end-user to farming. But they are still the end-users. Let the the specialist and farmer doing farm stuff.

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That my friend, is what I am trying to find out. Until I can observe Network pricing in action (TestNet3) I won’t know. If PUT pricing is as cheap as we expect, and the free NSL amount keeps increasing, average people may never need to pay for premium storage. Only the “heavy” users, uploading a ton of stuff will be paying for extra storage.

We’ll see…

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Ok, I see, thanks for that…I’ll go away and have a think, as more interesting questions/problems seem to arise from this. Are we saying that basically in an ideal world we would have a system that took into account market competitiveness for resources, but this is technically un-feasible, would have too many knock on adverse effects or a way has just not been thought of? Is it generally agreed that the mechanism we have will probably result in resources being competitively priced or cheap anyway?
It’s not really about whether average people have to pay or not , rather what the price is. I’m also not sure what could be done after testnet3 if scenarios/tests show we could end up too expensive, that doesn’t involve some form of exchange which would seem quite a feasible thing to incorporate… Anyway thanks for that David…more thinking to do

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I think this is a far less important factor than we tend to make it.

The SAFE network is not about competing with cloud storage. The volume of data that people keep in cloud storage is not so huge, I think, per individual. Some users will store lots once the security is proven out, but storage is just part of the picture, so we shouldn’t get too stuck on it.

What the SAFE network is about is personal control of communications, voluntary interactions, scalable expansion, community participation, everybody-who-participates-wins, etc.

There will be lots of Puts and Gets just handling communications (email, VOIP, etc.), web traffic (sites, youtube-type stuff, etc.), and whatever. It’s about secure TRAFFIC more than storage. All participants will get a cut of that action.

I have a 1 tb drive that I back up a lot of stuff on, mostly movies, audiobooks, etc., as well as archived stuff. But what I really need and want to keep secure and accessible anywhere is maybe 2 gb, if that. THAT’S the stuff I want to use the network for, as well as all my subversive communication (like on this forum :wink:).

EDIT: Actually, @dirvine, this is true, right? I realized I don’t know about the exact mechanisms traffic handling in general, like email, VOIP, etc. Does safecoin get generated in the process of handling that sort of dynamic traffic?

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Assuming its completely secure and the speeds are adequate, I’d be uploading raw source footage to it for private use. That’s probably anywhere from 200gb to 5TB per job (jobs come in every 3-5 weeks or so). Feature films could be closer to 10TB, but would be like twice a year.

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Yes, well, speeds are something that will have to be adequate for the network to survive in the long run.

I’m sure that there will be a lot of data such as yours stored on the network, as well as enterprise stuff. But do you store all that stuff “in the cloud” currently? If so, what would it take to be competitive?

My point is that cloud storage is only a small part of what the network is about.

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What’s the definition of Cloud Storage here? I always thought that was a funny term, because it’s a little deceptive. Isn’t everything on the internet “stored in the cloud” technically?

EDIT: To answer your first question, we store dailies (compressed versions of the raw footage) on cloud systems for viewing purposes by clients/directors/producers/editorial/etc. So people can watch everything and make sure it’s all ready for use.

Systems such as Aspera are used to shuttle massive amounts of data back and forth for color timing sessions and online (not “internet” online, but online meaning the final process in making videos, upressing). That normally is all of the raw source (terabytes of footage).

I don’t tend to deal with the financial side of that, lucky for me, but I know they charge an arm and a leg. Thousands per month in many cases. Of course, that comes with service/maintenance.