I decided to treat it as a honest question/proposal and took the opportunity to let my own premises be challenged. If my basic understanding of safecoin is incorrect then I want it fixed asap; if it is correct and does provide a quick summary, then maybe some of newbies coming on board will learn from it and save neo and others some time. Lemons to lemonade I say…
4 Likes
Why is it important that the network has a stash of Safecoin?
Does a failure in the SAFE network’s resource market design give the need for a big subsidy for some activities?
I can understand the network building up a small reserve to act as a buffer to keep the put price from being too jumpy, but don’t see any need for the network to own any coins at launch, let alone 90%, unless the purposr is to ensure that future Safecoin ownership is directed towards network participants to a greater degree than early investors.
1 Like
In my opinion it is a good idea, since it ensures that after the network is born it has abundant resources for growth/expansion. The larger it is, the stronger and more robust it becomes (which keeps your safecoins safer).
p.s.
Also, I don’t see why humans would really care that the network starts out with more coins than us. Only the supply of coins in human hands will affect crypto exchange prices if that is your concern.
1 Like
Well said, It’s important to ask these questions. I think rewards to farmers need to be subsidised by the network at launch. Post launch, I don’t see ongoing subsidies as necessary or desirable. It simply distorts the true market price of network use (storage).
2 Likes
My problem is that currently competitors’ arguments say that Maidsafe is only 10% of what Safecoin will be and at network launch ‘your maid will lose 10x of its value’ and all this blah blah blah blah bullcrap. We already struggle with staying on top of the game in terms of top market caps (going from top 10 to 80) and this doesn’t help. It’s a little bit like shitty simple political arguments like ‘immigrants take our jobs’ which resonate with people who are unwilling or unable to understand the complexity of the counter arguments.
Another reason would be unit bias; people like to invest into things that cost less because they can get a whole coin or in our case more coins.
I am not hopeful that anything of this kind would helpful but it’s worth discussing/noting. Meeting in the middle would be amazing (moving decimal point + reducing the % of coins reserved for farming). Imagine if we have an official date for when this event would occur - we would hike up back to top 10 in no time.
2 Likes
Then why not suggest a unit sub-safecoin that everyone could agree on then? Bitcoin has a satoshi at 10e-8 BTC. Some people have suggested an “irvinoshi” although I think names like “irvines”,“dirvine”, “dirvinis”, or “dirvish” are fun too. That way you can satisfy your investor friends since they can buy billions of dirvini for just $1 right now and the core network farming routines can stay sound. I think I’m going to go try my first poll now…
As I see it, the job of the network is to balance supply and demand, not to ensure excessive supply or overconsumption, which I don’t see as beneficial.
When the network is first born, I think lots of people will want to farm out of curiosity, and I don’t see what benefit it’d bring anyone to have 100tb of unused space on the network compared to having 10tb plus a more sensible put price that reflects the willingness of farmers to offer resources, rather than a subsidised rate that doesn’t reflect anything much.
Perhaps making the network basically free for a few months would help kickstart things, but it could equally lead to users uploading SPAM for free / tiny cost, which is exactly what Safe’s resource market is supposed to prevent.
Even if a short-term network subsidy would help kick start the use of the network & nobody decided to spoil the party by spamming, it would only need to be a fraction of the Safecoin supply rather than up to 90%.
I’d like to know the reasoning behind & purpose for having 90% of the Safecoin owned by the network.
If markets know that the network holds 90% of coin supply that will be released in the future, it will certainly have an impact on the price.
Expected future value of an asset will definitely have an impact on the current price. The expected future value of Safecoin is far less if it’s known that the supply will increase up to 10x over the coming years.
2 Likes
I agree that subsidies would distort the true market price of network resources in the long term, but think they also would in the short term.
What benefit do you see to providing subsidies to farmers at launch? Do you think users will be unwilling to pay Safecoin to utilise the network?
I don’t see your point. When most crypto coins start out, a large percentage (~90%) only becomes available later in the future after significant mining/farming has occurred according to predefined rules. Has this fact caused the price of BTC to go down over time?
2 Likes
Try keep this non market cap focussed, it detracts from the credibility of your other points (which I’m enjoying seeing discussed).
Good question. I’m starting to question whether any subsidy is needed at all at launch. I think you’re right when you say that plenty of people will farm out of curiosity in the beginning. This fact, coupled with Maidsafe’s contribution would likely be enough to kick start things and establish a true price for network usage.
3 Likes
My point is simply stating that if the supply is expected to increase by 10x over time, markets involving a degree of speculation will factor this into the current price, so the 90% of coins held by the network and expected to be released over time are indeed likely to have an impact on prices at exchanges.
If the market is made up only of users who don’t speculate on future value, then the coins the network holds will only affect price in proportion to the quantity the network releases into circulation.
I think Bitcoin was, and still is dependent on the block reward. If the Bitcoin block reward were removed, transaction fees would need to rise to a level that would likely kill Bitcoin, or mining resources reduced to a level that would make the Bitcoin network vulnerable.
The Safe network won’t have the same dependency on such a subsidy, as it’s possible for the network to scale very rapidly while maintaining a balanced market between those who are incentivised to provide resources, and those who want to use the network resources.
The block subsidy in Bitcoin strengthens the security of the network. On Safe, a subsidy would only distort the resource market.
2 Likes
You could say that of any coin that does not issue every coin at launch. What incentive would there be to participate in the operations if you have all the coins?
That argument though is FUD because it’ll take decades to have most of the coins issued.
Actually it is the opposite that the network will try to do. Maybe this is the reason you think what I said is odd.
No the network wants to slow down new storage space being added if there is plenty of space and increase storage space if there is too little.
Having all the coins issued at start means the network has no real way to reward people for adding spare storage when needed since all the coins would be in people’s hands and very little available for the network to work with. With all coins issued there is no disincentive for adding excessive space.
Another perspective is
The coin would not gain value for a very long time
10% == $1/coin if you made that equal to 100% of the coin then each coin is worth 10 cents and very little reason for the value to increase from there. Farming is a waste since its cheaper to just buy the coin. Since farming rarely creates a coin, why would anyone farm?
You could say that with any coin that is not issued in full at release. Its a false argument that sounds good but in reality has no merit. It would have merit if the network just gave away the coin to people and people fear it will be given away quickly (oh you are doing that by giving away 90% before launch). But like most coins the way to get to those uncreated/unreleased coins is to do work (mining/farming) and the release is over a long period of time, thus the market is not fearful of a sudden influx of coins.
I really cannot see how the network can survive if no one has to do anything to get more coin since all the coins are issued at the start.
Ummm they already have with MAID and its quite high in price now. See above the argument has been proven wrong by any nimber of successful coins that do not issue all coins at launch.
But the biggest issue is that you have to redesign SAFE rewards system to even have a chance to succeed with issuing all coins at launch. The current reward system would simply fail from the start and really be like there is no rewards for farming till enough coins have been used to buy resources. Somewhere around 20% (an estimate) more coins would need to have been used for buying resources over the coins rewarded before home farmers had any confidence of ever getting a coin.
I’m in favor of the current setup, but I think the tough part of SAFE for investors compared to BTC is that the rate of inflation in BTC is very predictable, but in SAFE it is dynamic.
1 Like
and of course it can deflate. I expect for the initial period the number of safecoin will reduce before going up again. With tons of spare storage compared to used storage at the start means for the first period (days/weeks) there will be more coins spent than rewarded.
2 Likes
This is the first thing that comes to my mind when I read the title:
It is a joke of course but it is also a warning sign I see.
5 Likes
Yes, I think opposite ideas, like expanding to 43bn instead of 4.3bn Safecoins (so from 10% before launch to 1% before launch) will be less popular.
1 Like
How can this be since each put (no matter how small?) will cost at least one Safe since the the coin is not divisible.
I don’t think it was ever written that 1 PUT = 1SC for all time. That could be the case in certain circumstances, but IIRC It all changes based on farming rate and resource availability.
1 Like
When you spend a safecoin, it purchases a “PUT” balance.
The “PUT” balance is decremented by (1/Farming_Rate * 2^64) for each PUT.
The “PUT” balance is loaded to int_max of a 64 bit integer. (approx 10^19) when you spend a coin
1/farming_rate can be as low 10^-18 when spare storage is very high and so put balance might be decremented by 10 or 20 for each PUT…
Thus you can do billions upon billions of “PUTs” initially and this will reduce quickly as spare space reduces.
On the Farming side this means
Initially billions and billions of GETs are required for a farming attempt.
This number of GETs required reduces quickly as spare space reduces.
2 Likes
Thank you @neo, you taught me something! This issue/misunderstanding has been nagging at me for some time.
1 Like