i like your argument…
Hi David, I got this from Maidsafe site which suggests this is supposed to be the case anyway:
Farmers, analogous to miners in the Bitcoin world, provide their resources, storage space, CPU and bandwidth in return for safecoin, the currency of network when it launches later this year.
My suggestion is that this includes all commerce too, as this is where the true value for safecoin will lie. My other question is "how is the 30% annual loss of value offset/compensated for at launch.
I’m not asking for guarantees, that would be fair comment all things being equal - it would be ridiculous to ask. I’m just pointing out that there appears to be a 30% downward pressure on Safecoin price, so that price will inevitably fall, at least in the short term (until eco-system is active- I’m not thinking past 1st 12 months here to see how it goes).
The issue is that if you launch knowing full well that the price will initially drop (because nothing to compensate for it in short term), then we are going to have issues, whether we fully expect price to rise in long term or not.
The accusation would be that It’s like selling something with a 30% markup before launch, knowing it will initially lose 30% - people will sell and buy back cheaper and accusations will start flying around, which we really don’t want. Whether we think it will increase over time doesn’t come into it. I also infer from all the previous that safecoin will devalue against whatever you compare it with, fiat or crypto, due to them not being hindered with the 30% tariff.
Is it possible for anybody to either fully explain (in laymans terms) why the 30% does not enter into the equation, or alternatively how this is compensated for in the short term from launch
The currency of the network here really means the currency of choice for network resources. So not tied to these resources at all but the simplest mechanism to anonymously buy them. The price is nothing to do with the network but how many are charged for services will vary per service and on occasion at the service providers behest.
The fact farmers and builders earn safecoin is a simple way to amortise resource costs cross the network without having to have people buy direct from a farmer and lose all anonymity etc. as well as all the issue with what are you buying for how long etc. So the way it will work is farmers are rewarded for provable resource management. There is an algorithm to ensure the supply/demand is consistent regardless of the safecoin price externally so if farmers refuse to farm for a safecoin value of $0.000001 say the network will increase farming rewards, if the value is $1 then the network can reduce rewards etc. It should be inherent in the way the mining algorithm works. I think there are huge choices here, but in no way will safecoin value itself be tied to resource costs directly, we know these exponentially decrease (but exponentially grow in size or requirements) and that should be OK.
Hope this helps a little folks I am rushing of again.
4 Likes
Phew, great, its clearer now and good to know its all been considered. Cheers
1 Like
Is there some kind of “difficulty” function for farmers? If you raise the difficulty you can decrease the generation rate but how would you do that in this context? I don’t know.
But I do know the network and Safecoin has to be optimized in such a way to grow in value as quickly as possible. Meaning you want as many farmers as possible as quickly as possible. How do you get that if the Safecoin value goes down?
If we think of Safecoins more like Safeshares then this represents shares in the SAFE network. If these shares appreciate 100% or 1000% as is common in the altcoin landscape then you’ll have math which will attract farmers.
But I don’t see why anyone would farm to get pennies a month?
Hang on a minute, [quote=“dirvine, post:23, topic:405”]
So not tied to these resources at all
[/quote]
and…
and…
appear to conflict with…[quote=“dirvine, post:23, topic:405”]
if the value is $1 then the network can reduce rewards etc
[/quote]
Do you mean the value is “internally” then? If so what does this mean?
Two further questions are: Why does it not matter what the external price is and have other pressures on the price been considered/evaluated, or does this not matter either?
Not asking you directly David, I recognise you’re busy, just hoped someone could jump in.
I understand how the market price doesn’t theoretically negatively affect the safecoin value in regard to the operation within the network. I don’t understand why market price is not necessarily going to fall until such a point as network is fully fledged and inhabited. Would Market price conversely be affected by lack of resources? If so they are connected to resources aren’t they? Is it just me, just say if it is and I’ll stop wasting time.
This will only happen if the economic cycle will be closed in SafeCoin. As long as most people earn their wages, pay their rent, and buy their food and SafeCoin in fiat, the conversion rate Fiat<->SafeCoin will be extremely relevant to all those people. I don’t see it as tying your boat to a sinking ship, rather SafeCoin would be the lifeboat present on the sinking ship. If fiat starts collapsing people will jump ship to SafeCoin.
The price is determined by the network algorithms, so indirectly the value is. You essentially pay the network when you buy storage, and the network pays the farmers. Those algorithms will take several factors (network statistics) into account to determine how much storage you can buy per SafeCoin, and how much SafeCoin farmers earn for providing storage.
The algorithms aren’t worked out yet. Most of these threads about SafeCoin are part of a big discussion about the principles that should be behind the algorithms. Since the algorithms can only be aware of SAFE network statistics, we need to theorize how some of those statistics (like the free storage available) are affected under different situations and events, and how the algorithms should change the SafeCoin storage price and farmer reward accordingly to yield a positive effect for the MaidSafe project and the value of SafeCoin under every circumstance.
1 Like
It might be an idea to program a simulation to figure this all out? It’s definitely easier and more reliable than writing out different scenario’s all the time. We could convert theories on market behaviour into basic formula’s and simulate different scenario’s by adjusting parameters and variables. I would be willing to take first initiative, all code open source ofcourse. I figure the team already has plenty of programming to do.
If you like this idea, feel free to tell what you’d like to see in the simulation.
2 Likes
The thing to consider here is that running the SAFE client to access the network from your home computer with a little extra hard disk space costs you virtually nothing. If the network is cool and useful, there won’t be a lack of general farmers.
Setting up a more elaborate, dedicated farming rig is another matter. That sort of farming will be moderated by the value of savecoin vs the rate of farming. Also don’t overlook the consideration that many who set up dedicate farming rigs will be willing to operate at a loss for quite a while, as long as they are actually getting some safecoin, because they’re betting on the value increasing in the future (witness current bitcoin millionaires).
3 Likes
Yes Seneca, I love the idea that would be great. I’m just wondering if maybe external variables may indirectly affect things so there maybe variables unaccounted for or that do not affect the internal workings of safecoin within the network, but that can have a predictable (measurable effect on market forces). Anyway thanks
I like the idea of computer simulations but I won’t bother MaidSafe or the other devs to do this right now. They have a very important task which is to make sure the Network and Safecoin is secure and reliable.
One of the biggest threats is attacks to double spend or game the system. This is paramount to the future of this project and more important than our economic debates. If others want to do this on their own please have at it.
At the very least, we hare having discussions to lay down a foundation as to what we want out of Safecoin. That was the whole idea of this post.
1 Like
I agree that we shouldn’t bother the devs, I thought we were chatting amongst ourselves. Whether or not double-spends is more important than the economics is debatable in itself - as is whether the rabbit/turtle analogy is valid. I thought this was a forum to do exactly what we are doing? Sorry if you or Seneca are devs, I didn’t know.
2 Likes
No need to apologize. This discussion has been very good so far.
I am not a Dev, I’m a BSA (Business Systems Analyst). You could say I’m the guy between the End User and the Engineer. My skill set is to evaluate products/services from both perspectives. I look for technical flaws and suggest improvements to make the product/service more viable and profitable. I work with everyone involved: from the Investors, to Devs, to Marketing, and finally the End User. If I do my job well, the evolution of this project should flow more smoothly. 
3 Likes
That’s great David, really impressed with your skills. I should have just read the introduction section which I will do and add myself maybe. Anyway, nice to meet you, I’m a bit of a pain in the arse but I mean well. I’m just trying to do my thing which is fight off the trolls and try to explain things to people, so I may sound like I’m trolling or something at times which I’m not. I’m kind of trying to qsk the questions from a trolls perspective in a way to see if we can get clear answers that I can pass to other dimwits such as myself or to use to defend against trolls. When I’m asking things it really is because I don’t understand and think others may not either. Think of me as a friendly troll…like Shrek…lol
1 Like
It costs time, it costs space, and it’s hard to know how valuable that space is to a person. It’s not wise to say it costs virtually nothing when value is entirely subjective.
If you want incentive then you have to allow the benefit to outweigh the risk for most people. People will think using the SAFE network itself is a political and legal risk. There are people today who are worried that it’s illegal to farm because they might get raided by the government.
These are the sorts of risks you’re not considering. You’re thinking people will risk it all for pennies? They might risk it for enough dollars if it can pay their rent that month but only the most radical individuals will be willing to farm for pennies. So eventually you’re going to run out of farmers and that is a problem.
The incentive for farmers should be higher than the incentives for users because you need farmers and builders more than you need users. If that means paying farmers dollars instead of pennies so that you can get a critical mass of farmers then do it.
The alternative is you’ll have very heavily centralized farmers who do all the farming and take all the risk and how are they supposed to upgrade to keep adding to the network if it’s such small profit margins?
As I see it in either case the profit margins have to be high enough to account for risk, encourage a critical mass of farmers, and allow for upgrades as quickly as possible. For example if a farmer makes enough each month to double their resources provided to the network monthly then you have the sort of growth you will need to keep up with Amazon or Dropbox.
If you don’t wish to participate as a farmer, don’t. That’s the choice everyone will have. But if you have a home computer of even modest capacity and wish to use the SAFE network, it will cost you very, very little, if anything, to also be a farmer. If you don’t understand that, you need to listen to some of David Irvines interviews and read the basic press releases for a start.
Why will “people think using the SAFE network itself is a political and legal risk”? It’s not at all like running a Tor node or The Pirate Bay, etc.
“There are people today who are worried that it’s illegal to farm because they might get raided by the government” is a statement worthy of Fox news, a skewed, unsupported generality.
Developers, builders, farmers and users are all vital to the network, users most of all. That’s no different from anything else: Things are not made which are not used, as a general rule. It’s a symbiotic relationship.
Centralized farming is virtually impossible on this network. If you don’t understand why, look deeper into what’s already written and spoken by the developers and front people for Maidsafe.
1 Like
Because we can be almost certain that there will be controversial content and use cases. The media is going to take it out of context and it’s not going to be “cool” to be a farmer early on. Politically it’s exactly like Tor even if technically it’s not nearly as much risk once enough people use it.
Or do you really imagine millions of people rushing to host possibly illegal content on a platform which is even harder to explain to people than Bitcoin?
Technically it is safe if you understand how it functions but politically it’s not safe because people who don’t understand how it functions have a completely different way of thinking about something like this. They will think you’re trying to help bad actors or that you’ve got something to hide. You will have to try to explain to them why you’re a farmer and they will talk about you like you’re a criminal.
Why pretend like these attitudes don’t exist? It has to be factored into the cost/benefit analysis. If you want people to overlook the bad press then you’ll have to provide a large enough economic incentive to overcome the bad press. Bitcoin managed to survive the bad press because the price keeps going on up.
I think technology like this is easier to explain when its profitable for farmers. When farmers are farming without the expectation of profit then it becomes something which cannot be explained without a long deep political discussion which in my opinion you will lose in the short term.
By the way the users aren’t as important as the farmers and builders early on. If you look at the math of things you don’t have any resources or content to support the users if you don’t have way more farmers and builders at first.
And if it cannot centralize as you say then you will always need a lot more farmers and builders than users or you will need farmers to invest in huge farms.
I don’t think anyone, including myself, wishes to pretend that there won’t be kickback from traditional media and governments. But just like public key encryption which was characterized as only for terrorists and child pornographers, it should persist and expand, I think. Same with every disruptive technology that “the powers that be” can’t really control: there’s a hew and cry about how it enables crime, but if it’s good enough and enough people continue to use it, adoption increases to a make/break point of acceptance. That cycle has been observable with any technology that threatens the status quo. Crossbows let peasants take down knights–bad. Yet crossbows pesisted; knights lost some of their edge. Guns to samaris, same thing.
Maybe Maidsafe doesn’t have it nailed. We’ll see. But something like it is going to succeed. Adoption will be a measured and balanced thing, not something that skyrockets because of fabulous profits to early adopters, though over time early adopters probably will (and should) profit more than those who didn’t invest in the vision, but waited till it was a surer thing. The thing about this community is that I don’t see it as primarily profit motivated. It’s having a blast creating something of extreme utility that will be disruptive to fixed/flawed current models.
Of course, developers and builders are the creative foundation of the network, but they are focused on users, which is the purpose. But you seem to not get that a huge majority of users are also likely to be farmers by default. There’s no way to indicate whether those encrypted bits on any farmers computer are connected to anything “illicit”, etc., That leaves the only PR attack vector as “It’s bad because WE CAN’T SPY ON ANYONE AND EVERYONE.” That’s going to be a much harder case in the post-Snowden world.
Also, consider that stopping people from participating in SAFE will be even harder than keeping them from torrenting. Good luck with that.
I don’t say don’t do this, but frankly I wouldn’t trust any simulation over well reasoned ideas and properly refined intuition / gut feel.
The only thing I would bet on is them both being wrong ;-). Its just that one can make one feel it is accurate, which is actually dangerous. Better to know we don’t know and will need to handle unanticipated cases.
The only “simulation” that counts is when we run the network, and even that will only be a guide to what might happen in an infinite number of unknown scenarios. Now if only you had a powerful enough massively parallel planet wide network to run the simulation on, then that might be another story, but… oh wait!
EDIT: Also, the test nets are being run to do this kind of job. I’m not familiar with what economics are going to be included at what stage, but those parts of the system will be in there for sure. OMG, there’s my first use of the @dirvine meme. Had to happen.