I don’t consider every one of the 400M MAID equal weight on the supply. At least in the short term. In shorter time spans its more about the pressure in the pipes right now then how much water is in the ocean. Someone who bought at the ICO and just HODLed til now: well some people just look at the market cap like you suggest, but a lot just forget about those for now since there is no immediate price finding action involving them. I mean even if everyone just thought marketcap, when the whales move its still going to move the price. There is that nitty gritty of actual buys and sells happening where things are never perfectly smooth price wise.
I think this community especially has alot of long term HODLers. If you look at the buy side of market depth there is no where near offers to buy 400M any where near this price. This is not that relevant though, because there is only 1.5M actually listed for sale. I am just trying to get a better view on how much is basically for sale now but just being held in a private wallet.
Hi. As a relative newcomer and with great interest in this project, I had a quick question as to the transition from the current token into the final Safecoin - not in terms of of the logistics of the swap, but more in terms of the economics. I understand that the transition will be 1:1, all clear. But, the current token is of course based on speculation / interest, whereas the final Coin will be based on how the system decides it should be priced - supply and demand of resources. Therefore, if the token price is 1 GPB before going live and the actual coin price, based on the system, is at go-live 10p - the transition of 1:1 will lead to a big drop (in FIAT terms). Or would the ‘day 1’ price of the Safecoin somehow grandfather the token price in some way, so that they both marry together seamlessly at the start. Am sure I am missing something… and thanks for clarifying!!
the price of safecoin will be somewhat speculative to. The difference when the network goes live is you will be able to trade it for some amount of storage space. How much depends on how big the network is. For farmers its pretty flat cause either safecoin is not worth much but easy to get or requires more work but is more valuable because each coin gets you more space in exchange. There will only be a set number of safecoin so if you buy early and the network grows its prety safe to say there will be opertunity to exchange it for a higher price.
now with MAID we have no idea what exactly you will be able to trade it for and when in terms of storage space on the live network so it is way more speculative and the difference between MAID price and SAFE price could be very large in either direction.
The system does not directly decide what the fiat price is (that’s impossible!), the market does. SAFE is recycled back into the farmable pool when it is spent to buy PUTS to write to the network. The network has two feedback loops that control the rate of farming and how much SAFE it costs to write to the network:
It sets how many PUTS a safecoin will buy based on the available storage. So if there is a ton of space, a safe coin will buy more relatively and the rate of recycling will thus decrease, making adding new network resources less attractive.
The rate at which farmers earn from the network’s pool of SAFE is based partially on how many safe are in the pool. If space is scarce, puts will be expensive, and the overall possibility to earn will be increased, incentivizing the addition of new resources.
Together, these loops will also affect the supply available for trading, and thus the price. There will not be a discontinuity when the market goes live as per your example. The network regulates the relationship between SAFE and network resources, and the market will regulate the price per SAFE.
Thanks for that - therefore in the 1:1 transition between effectively two coins, you could easily expect a big hike or drop - either are possible? Am taking about around the go-live date, not the long term.
um you should first understand that the go live date is pretty long term lol. Great progress has been made but this is like a Sistine chapel. Like expect to be HODLing for years if that is your profit realization horizon.
Yes the price could go up or down when we hit final release. I think it really depends on how much resources 1 SAFE coin turns out to buy. There are other factors to like we might just have an excitement price bubble right at the start. We might also see that we really overvalued the 10% we had to trade until then and that with the other 90% in play there just arn’t 10X more buyers right off the bat.
If the network is being used, the price will be much higher than now. Imagine that you could upload tons of data permanently for very little fiat cost. There would be a huge incentive to buy up coins to do so, but very little incentive to add new storage. Imagine the converse, that there was speculation in SAFE, and the initial cost to upload was very high Only a few people would, but the coins would be worth much more than the cost of storage, and many new network resources would be added until the cost of data declined enough for people to find use cases.
In both cases the network feedback loops will slowly align the cost of PUTS to the real world cost of hardware supply, whatever the value of SAFE. SAFE will have ‘backing’ in that the feedback loops will prevent it from falling below the real world utility value of the network, but the network will align whatever the price of SAFE in theory. This price will be set by speculation, and by adoption. Don’t forget that SAFE will not only be useful on the network, but also a fully anonymous and scalable cryptocurrency.
The price of purchasing storage space in the network via SAFE is decoupled from the fiat prices of SAFE. They are not related. Thus, if the network has a lot of free space, it will keep lowering the price (in SAFE, not in fiat currency) of PUTs to encourage people to purchase space. If space is scarce, it will raise the price in SAFE.
For example (these are not real numbers), the network starts and there are 500 nodes and 50TB of space provided by the Maidsafe team to jump start the network. The price of a SAFE coin at launch is $1 USD. The network has no concept of fiat currency so it prices the equivalent of 100MB of space at 5 SAFE coins. Nobody wants to buy storage at that price, so no purchases are made. The network tries to find a balance, and right now, no one is purchasing and placing data. So it drops the price to 4,3,2,1, etc. until it finds the balance where people start buying in relative balance with how much storage is being added. Thus, 100MB could end up being .5 SAFE coin, or 50 cents USD, but the network has no idea what the dollar value is, simply the purchase demand.
All that to say, the price (in fiat) of SAFE will not be dictated by the network, simply by the holder’s perceived value. Purchase of storage space is just one of many aspects that SAFE could be utilized for in the future, and does not dictate its potential price.
This is true in terms of the FAIT cost to use the network. That should be pretty stable from these loops. But with only a set amount of SAFEcoin to go around, as the network grows individual SAFEcoins become worth more FAIT (and of course buy more resources to balance out) So if you buy SAFE early and the network grows you are gaining both more utility of the network and more value in fait you could trade those coins for.
Both @andyypants and @wydileie are right and both say parts of what I tried to say. In short, the network will ensure that the fiat price of data storage is where supply meets demand. Adoption will drive the fiat price of SAFE up because there is only so much, and the network will respond by adding capacity until the cost to store data is back in line.
Thanks everyone for the explanation and taking me through it, and fully understand that the network will have no understanding of the ‘real world’ FIAT value, but people will naturally make mental calculations to see if it is good ‘value’ - from a product perspective. But then can you envisage that the ‘trading’ FIAT value of the SAFEcoin will ever differ much from the cost of providing resources to the network?
Yes, that probably will occur sometimes, especially when there is large influx or removal of storage nodes. This is especially possible when the network is still rather small. The larger the network, the less fluctuation there should be. You must also understand, though, that SAFE is not limited to its utilitarian purpose of providing data storage. It can be used for day-to-day transactions as well.The storage is the backbone of the network, but it is only the tip of the iceberg when it comes to possibilities. Ultimately, we all hope SAFE will become the default go-to for payments, in the crypto world, and further.
Considering the absolute anonymity, ease of use, and no cost behind Safecoin transactions as the glue to hold the future of an autonomous, decentralized network together; in a lateral power sharing system of economics and governance, then you are right.
Safecoin has the potentail of becoming the currency of the future, in a global sense. This coin will have value beyond just payments, but to decentralize power itself, and give poor people a chance.
And the reason we will need a practical infinite divisible coin (in a true decimal sense) is because there is no limit up or down in FIAT price that the coin can go. Any limits will be of a practical nature and not set in stone.
The previous posters are correct in that there is a feed back loop in the whole pricing scheme with humans as the final component in the loop.
The good thing is that the actual price of PUTs in $$$ terms will tend to balance out to what farmers and resource buyers are willing to receive/pay. This may experience short lived high/low peaks/valleys but in the long run be that balance of what people are will to accept in FIAT terms. On the other hand the SAFEcoin amount needed to buy or amount received will not be so consistent since farmers join/leave both randomly and according to FIAT price.
Now the other uses of SAFEcoin for commerce etc will not really affect the above feedback loop except for the actual FIAT price. The commerce utility of SAFEcoin will typically have an upward pressure on the FIAT price while people are entering the SAFEcoin economy. I am guessing that at some stage (like a “S” curve) the FIAT price will likely even out.
I know I repeated a lot of what others said in a different way and thanks to them for helping you out @Moose99
there is definitely something to be said for using safecoin as a more general currency. Quite often no coiners are like so what is this crypto actually backed by and I have to explain its the same as modern US dollars in that its actually backed by nothing. But safecoin will be backed by at a minimum the ability to store data. I would say that’s maybe something we could really consider a modern equivalent of a gold standard.
Check out sunny decree latest vid ‘which altcoin to buy to get rich…’ he picked maidsafe randomly obviously has no clue about project, but gave quite a bad impression.
