Imagine a scenario in the future where the SAFE network has become big and lots of farmers are happily storing data and earning safecoins. Then for some reason the interest in Safecoin drops radically, leading to a cataclysmic collapse of the entire SAFE network due to the incentive for storing data having been pulled away in a sudden swift swoop.
Having the incentive for others to store your SAFE data directly connected to Safecoin with such focus could therefore be a long-term risk for the whole network.
A more robust solution is to have the incentive for storing SAFE data related directly to the functionality of the network itself somehow.
That is so true. As an outsider I never cared much about the data storage aspect and I think the public may have the same sentiment. I care a MILLION times more about the communication element and having it unjammable and unblockable and useful to make state and corporate actors completely transparent. Storj etc., it just didn’t interest me. Also there is the idea that a data set just sits static, like memory chips vs processors, or a noun instead of a verb. Bitcoin had a bit of that verb going on. I think people also think more in distributed computing terms and yet that is down the road in the roll out. I think the priority for hardened network is much higher than for hardened drive, but I don’t think like a programmer.
When maidsafe was first conceived the ability to store data safely and securely was itself the incentive behind its use. If there were no safecoin I believe the network would still be a highly valued platform. So the way I see it, safecoin is simply going to catalyze what would happen anyway.
All the coin does is incentivize and sustain growth.
This thing has the power to be bigger than Facebook, Google, Twitter, Apple etc. But to get it to that level they need to commercialise it, just like those companies moneized their ideas only in a way that only a decentralised platform can remain completely decentralized and that is to use a decentralized form of money, in this case tokens or digital coins
@goindeep o me this sounds like a call to for instance have the coin work to harden the network physically by allowing earning for doing so. Which I think we agree is a good thing. If the payoff were high enough in dedicating storage, cycles and bandwidth it could go viral. But to really take off it can be subletting the the artificial scarcity games of sponsored cable internet where people pay a subscription to see increasing amounts of ads and have cable spend that money to fight free speech, neutrality and access. They constantly pay people to lie about the issue to try to perpetuate their extractive fraud.
By then we just need to make sure the ECB enters digital money business and there will be a way forward - just ask the ECB to rescue the SAFE network as a systemically important virtual institution!
Digital currencies have only in recent years become popular. Safecoin could potentially become very popular yet the future of digital currencies seems hard to predict. New inventions can render existing solutions obsolete. On the other hand if Safecoin establishes itself as a major currency, then the SAFE network will continue to remain stable.
With fast transactions, zero transaction fees and blockchain-free technology Safecoin has a great chance of becoming a success, and proving my OP scenario to only be a FUD dud.
All this raving about incentivization. Has no one read up on Dan Pink’s talks on motivation and drive? Incentivation could in fact be what stagnates growth compared to a gift economy like the Linux community. I support safecoin, it’s a great achievement and will be very good ffor the economy at large as it’ll help us move away from the banks and decentralize currency. But I caution against this idea of incentivizing everything or even “it just incentivizes” this or that. Incentivizatiob of something is a big shift in motivation and such an act should not be taken lightly.
And there is another scenario in which safecoin market price puts in risk the whole network.
Supose an extreme scenario:
The price of safecoin vs BTC raises too much, due to a huge price speculation, then people will be discourage to put new data due the cost Megabyte stored / (BTC or USD)
Then the network will become less interesting in terms of stored data, and fewer farmers will be.
Then the network will shrink and will be weak.
Solution:
The cost for store a piece of data in the network must be in terms of offer and demand (price market), not only by a ratio between number of SafeCoins mined and resources.
If the SafeCoin price rises significantly, it will attract more farmers, there will be more space available so the price of space drops again.
That was about problem solving, giving too much materialist rewards hinders creative thinking. Farming is not creative problem solving, it’s simply providing a resource and getting paid for it. Dan Pink’s gospel doesn’t really apply here. He also didn’t say people should not be paid, but that they should be paid enough to take money out of the picture, and then focus on value of the work itself.
Do you mean the price of space will depend on number of farmers (resources)?
I can’t see it on the paper about SafeCoin http://maidsafe.net/docs/SAFEnetwork.pdf
The document only says that the rewards to the farmers depends on a ratio, but nothing about variable price for storage.
In the case the price depends on resources offer, you’re right. The costs of put data will drop if there’s more farmers.
But there’s another problem, how does a user can know how much he’ll pay for store data in advance?
I think it’s best to have an incentive with the coin. On top of that, it’s time for a completely anonymous cryptocurrency that SafeCoin will try best to achieve. I am a strong believer that having a blockchain forever is not anonymous at all and research is made into identifying, tracking and linking addresses. I am pretty sure someone will try it without the coin, and just as in nature, the best implementation will become popular.
Both PUT costs and farming rewards are algorithmically determined, i.e. variable. The cost to PUT a certain amount of data is calculated by your close consensus group. I imagine this figure can be requested from them.
I imagine it too because it’s important to know this figure in advance before purchase space in the network.
I suppose we’ll see it in the development of safecoin in testnet3.
It would be helpful if we had a FAQ on this but as its all to be tested and refined in testnet3 it might be wasted effort. However, there have been many discussions of the plans and alternative ideas on how to do this, and of issues like the ones raised by the OP and in a follow up by @bcndanos.
I don’t think the OP question is proven solved, but it certainly is addressed by the planned mechanisms. I haven’t noted the most relevant threads on this so if anyone does research these issues, even a FAQ post listing relevant posts would be useful.
Looking over the posts so far, I think something is being overlooked, or misweighted.
Safecoin is conceived as the OIL of the network, not the fuel.
The purpose and main drive for the SAFE Network is Secure Access For Everyone, with Privacy, Security and Freedom at the center of its design.
The strain on anyone running a vault is very minimal, and mostly needed to access the network, so it’s not like you’ll go in debt to finance huge server farms to run lots of vaults. If you did that I think it would likely be unprofitable.
Tor is “popular” but very limited in the number of people who are willing to run nodes, so it has a lot of slowness, vulnerability, etc.
The point is that safecoin is an incentive which reduces friction, not one that motivates the project overall. Nobody is going to get rich farming safecoin. Safecoin riches may come to crowdsale purchasers who got a lot of it then. We’ll see. But anyone else that gets rich in safecoin will have to earn it by providing products and services that are fabulously popular.
The “get rich” paradigm has skewed economic thought in the crypto-currency realm. But safecoin is a very different critter and, while I think it will see fabulous increases in value, I don’t think it poses a threat to the network.
If it should plummet in value, people will still want to use the network if the network is good. If it’s not, it will die because it’s not good and effective, not because of the price of safecoin.
As I understand all this if the price of safecoin goes up then farming safecoin becomes more profitable because you can host the data and then sell the coin. As the price of safecoin goes down people would buy it up and use it for PUTs. So what’s the sollution if there’s a sharp rise in safecoin price? Don’t buy safecoin; farm it instead. And as more people turn back to farming and selling their coin then the market price for safecoin will drop. As it does so it’ll become more attractive for people to once again buy. Really I don’t understand what all the hullaballu in this topic is about. Also remember that as people spend their coins they are destroyed. It’s not like bitcoin where the coins are recirculated. So literally to get a sharp rise in the price of safecoin you would need to be top heavy in users competing for safecoin compared to the few numbers of farmers generating it. How is this solved? Get more people farming safecoin. It’s basic supply and demand.
A very sharp increase in price can result in an incentive to attack the network. If the increase is too great, the incentive to attack can be so great that it becomes inevitable - and very dangerous. Bitcoin is resistant to this because there is a far higher cost to attack the network. That being said… there is a utility level below which the value of SafeCoin is far more stable and inexorably growth oriented (since utility and churn drive growth).