It’s a lot of assumptions and predictions without any real research or calculations, so I don’t think we’re going to get any further.
I’m honestly wondering how up to date you’re with Maidsafe’s decisions, implementations and algorithms. I’m not saying I understand everything for a 100% but it’s difficult to discuss with someone when his or her info is different than the truth or the other person you’re discussing with.
I have only found:
“Unlike many currencies, the distribution of safecoin is backed by information. This information represents the world’s data and grows exponentially. Unlike gold, which only increases at circa 1.5% per annum, the quantity of safecoin will initially burgeon. This is akin to the California gold rush, where the quantity of gold grew quickly with enthusiastic miners. In safecoin this is mirrored by the network building to the stage where it is protecting all of the world’s data. During that time the mining frequency will be exponentially decreasing.” – Whitepapers/Project-Safe.md at master · maidsafe/Whitepapers · GitHub
If the safecoin value is stable and the farming reward dwindles, then where is the incentive for farmers to make the network grow?
Why would the farming reward dwindle when the safecoin value is stable? Coins are also recycled for farming after you’ve paid to put data on the network.
I keep asking ‘why?’ on every statement you make so you maybe you could try to explain your thoughts a bit more if you want to keep this going.
deflation? are u sure? i like it cause we will be super rich in the future.
If the value farmers receive reflects the value they provide in the form of data storage they will stop farming. Not enough reward to make people keep farming. The farmers must be able to earn more than the value of their physical data storage.
Providing spare resources is free (as long as you farm as it’s intended to do (with your spare resources)) so every little bit of coin you earn is profit. Not enough reward to keep people farming means the safecoin release rate will go higher, which is the incentive to start farming again…
Not enough reward to keep people farming means the safecoin release rate will go higher, which is the incentive to start farming again…
This has been repeated over and over again.
Read all about it in the next edition of The Economist: “Safecoin’s Subway Problem”…
And the last thing you want to do here is to generate Safecoins like a lunatic, so that everyone tries to get rid of them the moment they get them, as Grizmoblust said.
The amount of recycled coins will be limited to the cost of storing data once the limit of 4 billion safecoins has been reached. So not enough recycled safecoins to increase the release rate.
That’s called deflation, when the price of the coin expressed in other, non-deflationary currencies, goes up.
So the cost of storing data will go up the same amount as the increase of the value of safecoin?! Or are the safecoins recycled in more ways than just through the cost of storing data?
The payment is the network.
Everyone runs computers. There is no shortage of hard disks spinning or internet connections laying mostly unused.
Those computers often run in an environment where malware and viruses steal their data, where backups are difficult to do – Where off site backups don’t happen. Using your computer is dangerous. It will be much safer with Safe… That is the primary reason to farm.
SAFEcoin in my mind is to prevent network abuse. Spam and flooding of the network will be expensive enough that people cannot do it just to do it…
Lots of peer to peer networks have thrived without payment. SAFE will be more useful than any of them thus I expect the same. Payment is a nice bonus, but it will probably be a break even bonus finaincally, the benefit will be Security privacy and freedom.
As far as inflation goes. So long as the coin doesn’t get to valuable to buy what it is intended to buy it shouldn’t make much difference… So long as the formulas are know the value will be what the value will be… inflation or deflation so long as it is predictable and not manipulated by meddlers (Read central banks) isn’t really a problem.
Deflation is probably better, so long as the coins are nearly infinitely devisable. unfortunately SAFEcoin isn’t . If SAFEcoin is worth 4000 USD, and I want to buy a GB of storage, that will be a cumbersome process involving some altcoin or something. If I could spend .0004 SAFEcoin that wouldn’t be an issue. That is the only arguement for inllation in my mind.
Let’s say that all 4 billion safecoins have been generated. And that the safecoin value remains constant. And that the only recycling of safecoins is through the cost of the data storage.
Then if too many farmers start to drop away, then the farming reward is increased which results in an increased cost of storing data. Then, because of storing data becomes more expensive, then less data is stored. The result is that too few safecoins are recycled to support the increased farming reward, leading to more farmers dropping away and even more increase of the cost of storing data, leading to even less data being stored and so on in a vicious cycle.
This will cause the value of Safecoin to rise causing more farmers to farm Safecoin.
Edit: The value of Safecoin is not some arbitrary number. Safecoin’s value is based on the value of the resources Safecoin can purchase from the SAFE Network.
Not to worry, it wasn’t a separate coin in that sense, more like a built in exchange with 1 SC pegged by the network to 1,000 Milli SC.
So anyone at any time could surrender 1SC for 1,000 mSC. I think the were issues reversing the exchange, and if these could not be overcome them might have people reading mSC to get SC, but perhaps the system could be made bi-directional. There is a thread about this somewhere but I think it would be hard to find.
Like I said - I don’t think there will be a shortage of farmers. The benefits of the network is ample reward itself.
Skype does fine without Bribes. Bittorent doesn’t hurt for usage. SAFE will be even more robust as it has all of the benefits you get from those networks plus some. The payment is a bonus. It is to prevent spam and abuse. If farmers make money that is fine - but that isn’t going to be the main reason people farm.
The investment is too low for the reward to be great. If farmers are well paid for handing over stuff that is abundant and free, then some bad economics is going on and bad economics will lead to trouble. I say network ought to pay its farmers as little as possible to maintain ample surplus resources for expected growth. As more are needed, the payments ought to go up. But in the end the market will always make farming a near break even endeavor. The payment and incentive is the network itself.
But surely the value of safecoin will be determined by exchange markets? I can’t see how the safecoin value starts to increase just because farmers start to drop away. In fact, one reason for why farmers start to drop away may be because the value of safecoin has dropped, but in my example I assumed a constant safecoin value.
The safecoin price is determined by the markets, but the rewards are determined by the network.
Farming is going to be substantially different than bitcoin mining in that there is zero incentive to mine bitcoin unless you get paid. With SAFE farming is a method to allow yourself to use the network without having to deal with crytpoexchanges etc…
Just to clarify because I’m not sure if you understand this: the value of Safecoin and the rewards to farmers are only loosely coupled.
Essentially the fiat value of Safecoin can go up and down. In the immediate term, yes this increases or decreases the value of the farming rewards, but as farmers respond to that (leave or join) the network notices and adjusts the level of farming rewards to bring the network back into balance.
I believe the amount of farming will mostly be determined by the farming reward. Too small farming reward, and farmers start to drop away. And increasing the farming reward when there are only recycled coins available will increase the cost of storing data.
In BitTorrent there is a sharing of resources. In the SAFE network, those storing data don’t need to be farmers. So there isn’t any automatic incentive for farmers to keep the network going other than the farming reward. In fact, when the network has matured and many people from the general public are using it, there may be a much smaller number of farmers than non-farming end users.
Thanks for that info happybeing. It is a worry if the aim is for Safecoin to become a unit of account outside storage allocation, I think this issue it is much more important than it may seem. I hope your right and there does become bi-directional, fixed and transparent “exchange” system in-built to simulate division. If it is not bi-directional then what we would have is separate coins that the market could price differently based on utility - i.e. not division. Also I still have not discovered why this seemingly more complicated system is being favoured, have yet to see any developers weigh in on the subject.