After thinking about this proposal for a while longer, I’m actually strongly in favour of this idea since it’ll keep the value of a single SafeCoin lower. The reasons:
The average human is not good in thinking in fractional figures. For example, the fact that when making small payments in Bitcoin we are working with values like 0.000432 BTC is considered annoying by many.
The less economically/mathematically inclined tend to intuitively value 100 coins worth $0.01 more than 1 coin worth $1. For many people spending over $100 for just one-third of a Bitcoin feels like a very bad deal. This may be hard to believe, but I’ve heard several people who I’ve always considered rather intelligent expressing this sentiment when discussing Bitcoin with them (including my dear mother).
Higher amounts of coins feel cooler. This I’ve heard being cited as one of the reasons for the success of DogeCoin. It feels better to receive or give a tip of say 5000 coins. Far cooler than 50 coins.
The devs have expressed the desire to post-pone implementation of SafeCoin division.
The current value of a MaidSafeCoin is already above $0.05. And we’re not even post-launch yet. Nor are we in BETA. Nor are we in Test Net 3. We’re in Test Net 2.
If MaidSafe is serious about it’s ‘secure access for everyone’ ambition and wants to have many millions of users at some point, then a higher SafeCoin cap is highly desirable. Now is the time when it can be done without causing any value loss for anyone. Also, it’s not like this is unheard of. Ripple currently has 30 billion coins. DogeCoin 97 billion.
As @TylerAbeoJordan suggested, the MaidSafeCoin:SafeCoin exchange ratio could be adjusted to match the increased cap.
Technically, raising the cap should be very easy. From the white-paper:
[ 32 bits: Token ID | 224 bits: ID padding | x bits (x <=
248): Subdivision bits | 248 - x: Random | 8 bits: Value of x ]
The initial part (Token ID) inherently limits the total number of
tokens available to 2^32 since each token must have a unique ID.
The second part (ID padding) must be predictable (e.g. it could just be
all ‘0’s, or it could be the ID concatenated 7 times). Its purpose is
to force all subdivisions of a given coin token the same trusted group
of vaults to eliminate the need for network traffic when handling such
subdivisions.
This means by simply making the Token ID longer than 32 bits the total cap will be increased. Every added bit multiplies it by 2. If for example we’d make it 36 bits long, that would multiply the cap by 16. The extra bits can simply be taken from the second part (ID padding), so the SafeCoin data structure would still be the same size.
So far I can see three (minor) drawbacks:
The extra SafeCoin records will cost extra storage space on the network. As a percentage of the network’s total capacity it will assuredly be negligible though.
A handful of people might scream hell and murder because they completely misinterpret the meaning of this change, missing the point that the amount of SafeCoins they receive for MaidSafeCoin or farming or whatever would be multiplied as well by the same amount as the cap.
Initially the network would need to handle more SafeCoin transactions compared to with the current cap. After we cross the point where with the current cap division would be used a lot, this is no longer true, since transacting two divisions of one SafeCoin is as much work as transacting two whole SafeCoins.
In my view the drawbacks don’t even come close to the benefits that are gained. I really think we should do this in order to be prepared for mass adoption. MaidSafe underestimated it’s own popularity before with the IPO and it backfired. Let’s not make the same mistake again? Remember, we cannot do this after launch. It’s now or never.
This sounds like the birth of an inflationary mechanism.
It may be hard for people to come to terms with being able to buy a car with a single coin in the not so distant future, but to introduce an inflationary mechanism (even just this one time pre-birth suggests precedent) suggests preemption and the whole debt-growth-fiat apparatus that makes it so hard to at the base of the current system. Doing this may cause SAFE to lose some credibility with influential hardliners.
The point of this is to keep it simple. Otherwise it’ll be very complicated to make exchanges with safecoin until the large effort is put in to allow subdividing safecoin.
For example, when a central bank engages in monetary inflation, they don’t increase the ratio of funds in your account. Yet this is precisely what we are suggesting to do. you don’t lose anything and this is a one-time and one-chance opportunity due to the planned conversion of the maidsafe token into safecoin.
It’s not in the least inflationary as everyone’s holding is multiplied equally. Being for this is the same as being for having a sub-divisible safecoin earlier, but in an easier fashion.
Doing this would directly translate into have fewer decimal points of subdivision later down the track. Which is psychologically better as @Seneca pointed out.
I think the secure access for everyone part is covered in the reward mechanism. Meaning that the users have a largely fair chance at acquiring some safecoin through farming, unlike the cryptocoins currently found.
Not sure that dogecoin is at all a success, and the economic model is laughable.
Since there is no bloody murder by expanding the safecoin capacity, there shouldn’t be this bloody murder about it not being changed at the moment.
@TylerAbeoJordan I agree with all of that and was wondering the same thing yesterday when I was reading @eblanshey excellent overview of SAFE. The calls for farming will be paid in fractions of coin and I was thinking a higher coin cap would be useful. But what is the right number and what was the crew’s initial thinking beyond 32 bits about setting the number that low for a coin that would eventually address the global economy. There are less coins then people. I remember some glimmerings. It will have some magical properties that will astound people if it can be kept capped, and for early adopters they would get launched with valuation as of them will possess many many whole coins.
you really aren’t understanding. An ‘inflationary currency’ is bad in the traditional sense because it is an existing in-use currency and only the money printers are getting the benefit of the money printing. Safecoin doesn’t yet exist. All we are proposing to do increase the amount of safecoin that will ultimately exist and that includes the amount you will be able to get when you exchange the token for safecoin. The value of an individual safecoin does go down…but the value of your holdings remains constant. This is not possible to do once the safecoin come into existence, but prior to the fact it’s possible.
The problem as it stands now is that until subdivision is coded into the system, if the value of safecoin goes too high, you could end up with a coin worth a lot more than a dollar, possibly even ten dollars or more…how then are you going to pay someone an amount less than that? You can’t! That’s a huge problem and one that we can easily avert without any loss in value to anyone.
The disruptive idea is to leave it broken. They didn’t predict the value of safecoin would already be so high. At launch it could easily go much higher. Think about how people are going to respond to that - if they can’t trade their currency for items they want, then it’s not a currency, it’s a broken system. How long before safecoin is sub-dividable…nobody knows.
But you see they will be able to trade fractions of a SAFE coin for stuff and that will have a glorious psychological effect. Easy conversion calculators are needed for people who don’t care to convert Celsius to Farenheit, widget level stuff. A tenth of a penny is a mill. We want currency that feels potent!
If I understand you correctly, your concern is the psychological impact of sub-divisible currency unit rather then implementing inflation. While I think what you are proposing is genuinely a good idea since we are not losing anything in regards to value, i suspect the confusion that it would cause may do more damage then good.
At the moment, with Bitcoin, they are already creating wallets that handle everything for humans thus avoiding or hoping to avoid the issue you mentioned. I don’t see any reason why this should not be the case eventually for safecoin. Most adoption should really be usage based i.e. buying storage then investment base thus knowing you are getting value for your money will negate any psychological drawbacks of sub-divisibility. I agree with whiteoutmashups here about focus in that there are other things worth spending time on, more pressing then this.
The network actively is recycling coins, there is a mechanism in the software that will take the coins and redistribute them automatically based on network usage. So, it is quite fair, the coins do not get so hoarded.
We will have a chance to demonstrate if this is still a good number in the days of test net 3, the speculation is interesting and I look forward to proving that it is all good.
Subdivision is going to be needed at some point, probably not too long in the future, after launch. This will be absolutely needed to allow micropayments if the value goes much higher for Safecoin than it is currently for MaidSafeCoin.
The question is whether to granularize at launch and call the smaller units “safecoin” or to wait and have 1/2 safecoins, then 1/4 safecoins, etc., later to represent the smaller units.
I’m not sure as to how the transaction managers will handle the accounting, but I wonder if, rather than showing fractions of safecoins when the split occur, that at a split people will just suddenly have 2x safecoin in their account. If this is the case I’d be in favor of going ahead and granularizing quite a bit at the start and just having people paid out the proportional number to what they bought at the start.
This is not inflationary at all, as some seem to think. It’s just being paid out in dimes or nickels, rather than dollars. Then you can buy a piece of gum or 11, rather than having to buy 10 or 20, or none.
Really, though, the question is for @dirvine and the team to decide whether (if it delays launch or causes other complications) it is worth doing before or waiting. There seems to be so much to do I know they don’t want to HAVE TO deal with this as well, but . . .
Let’s not forget that the primary use of safecoin is to facilitate network function, and it can do that without any subdivision. The currency aspect is secondary and useless if the network doesn’t get off the ground, regardless of the price of MaidSafeCoin.
no bigger call than thinking the team got the mastercoin/maidsafe IPO right. David isn’t a god, he can’t predict the future. Adapting to the flow is called being pragmatic.
My concern is maintaining a consistent value in safecoin. if the excitement around safecoin goes too quickly there will be a problem of exchange (as already mentioned) and that will very possibly cause a loss in confidence and a drop in value. There is a gamble in either case, however the time to think about this is now - after launch the token exchange rate is fixed and there’s no going back. IMO, this thread is for weighing the cost/benefit of such a change with facts.
