Yet we can’t rely on SafeCoin price appreciation to keep the network healthy. It needs to survive during long-term bear markets as well.
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It will survive future bear markets. Safecoin will primarily be tradeing on the safe network meaning traders will also be end users. I dont see a bear market being an issue.
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One problem with free GETs is that when all safecoins have been farmed, then all the farming reward will come from recycled safecoins. And recycled safecoins only come from PUT payments. This means that the farmers will later on earn exactly the cost of PUTs. And since data storage becomes cheaper and cheaper the farming reward will drop. And increasing the farming reward will become impossible because the PUT price must remain competitive in relation to cloud services etc.
Here you go off the rails. The farming reward only drops if there’s an abundance of capacity. Storage becomes cheaper over time, yes, but our usage of storage also grows. So farming rewards are balanced on supply and demand. Market forces should cause the farming rewards to be a little higher than the operational costs of the average user. The PUT price will (must) be set to match the aggregate income/expenditures of SafeCoin.
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But isn’t that impossible later on when the farming reward only comes from recycled safecoins? And I think it’s valid to assume that competing services will offer free data storage in the future.
No its not impossible. Bitcoin hashrate acts in a similar pattern to the price and profit on mining is marginal. Mining at a loss will cause miners to switch off until the hashrate drops to a profitable amount.
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It depends on the market, I think it will be sustainable, but none of us can know for sure. It depends on the demand for SAFE storage and it’s underlying features. If none is willing to pay the (PUT) price for what SAFE offers, then obviously there’s no market for this product.
Unlikely: MS cancels unlimited "free"
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But bitcoins are generated “out of thin air” so to speak. And when all bitcoins have been mined, the idea is that transaction fees alone will keep the miners going.
When all safecoins have been generated, and with zero transaction fees, then farmer income = PUT payment, i.e. no safecoins out of thin air to increase the farming rewards.
My point is that it will be mathematically impossible, without transaction fees, to have a farming reward higher than the PUT cost in the future when the safecoin cap has been reached. The farming reward will be exactly the PUT cost, since only recycled safecoins will be available. The SAFE network can’t generate safecoins “out of thin air” after the cap has been reached.
In aggregate, yes. In the end, the amount of income from PUTs over a given period of time must on average match the amount of rewards given by the network to farmers and such during that given period of time. I’ve been stressing this point for a long time already. I just don’t see why you think this would be impossible.
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I was thinking that the ability of the SAFE network to adjust the farming reward upwards will become impossible after the cap has been reached. Or will there be some kind of “buffer” of safecoins available even when only recycled safecoins are available?
The scenario I imagine is when all safecoins are in circulation. And the SAFE network has reached its cap of safecoin supply. Then, in this hypothetical scenario, there are zero safecoins available to the farmers. People start to pay for PUTs, and now let’s say 10 safecoins become recycled. The farmers can now earn 10 safecoins, but no more than that. So if the SAFE network needs to increase the farming reward to a level that requires a total of 12 safecoins, then that will be impossible!
The buffer will be 10% IIRC
Oh! Hmm… That could work. Except if competing services start to offer free data storage. Hard to compete with that when having a cost for PUTs! 
There should be, the algorithms for this are WIP and rather simple right now. I imagine during the next sprints there will be multiple RFC’s and corresponding discussions. The PUT pricing algorithm needs to take all this into account.
Got a source?
Not ATM…I’m busy compiling truecrypt 7.1a from source, but I’ll see what I can do.
When you need cheaper PUTs you increase the available storage space, and the price goes down.
Ok, so the farmers have a margin of excess storage capacity. Yes, then it’s possible to increase available storage without bringing more farmers online. And when more expensive PUTs are needed then the farming reward is increased (as long as the safecoin buffer isn’t completely drained).
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I was about to go into why paid gets will seal the ill fate of the network, but a freemium model where paid users get a higher placement on the priority list in bandwidth/compute requests sounds pretty workable. Push come to shove, the app devs can pay the get fees for their users just as they do in a way on the current internet. Either way, it’ll (further) seal in an incentive for the farmers to build up their internet network so they can fit in more data/compute requests, ergo 40tb internet for the whole world. The pro net neutrality crowd will complain, but to them I say, “welcome to freedom”.
EDIT: Also, with freemium gets, countering GET stuffing becomes quite easy with several strong options if one is dead set on get rewards for app devs.
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Anders is correct. The current model will not work, it would collapse. If you look at this from a mathematical standpoint it simply will not work. I can think of a few possible solutions, but a system as described in this thread would fail.
can you please explain your maths to us.
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