You cannot start a business without credit. The reason people aren’t using credit in a credit coin type format is because there are VCs pouring tens of billions of dollars per year into Bitcoin businesses. Imagine those VCs don’t exist and now tell me if you’d want to have the ability to issue your own credit.
I think the crypto community over values the utility of fast anonymous transactions. I think the real value is in the storage price because everyone in the world wants to store data while not everyone cares about anonymous transactions (only crypto-anarchists).
I think it’s critical that Safecoin are a much better deal for storage than anything else if you want to make it the privacy coin.
Forget about trying to make it the perfect currency. We have altcoins set up which are always going to be better and more anonymous for those purposes. But when we need resources we should think to buy Safecoins and not use Dropbox or Mega. If we can get a better deal anywhere else then Safecoins are completely worthless to the average joe.
For this reason recycling is probably a bad idea all around. Stability is a bad idea as well. If we care more about protecting from deflation than actual use cases then something is wrong.
These numbers make sense. What we could do is allocate everyone a percentage of the SAFE network proprtionate according to their investment in the crowd sale. We forget about how many Safecoins exist or don’t exist because the percentages stay the same. You might be able to get away with separating the shares from the coins that way.
For example Bitshares has it set up where it’s percentages. Whatever people own they should always own no matter how many coins it is.
Maybe my math is wrong on this so I’ll continue to think about it but I think you’re onto something and it may be up to you to convince the MaidSafe team to do what must be done.
@luckybit, I think you’re too focused on SafeCoin’s tie to resources in your analysis of it’s future value. Don’t ignore the benefits SafeCoin can offer as a general medium of exchange and potential store of value. BitCoin for example is deriving all of it’s value from it, but SafeCoin is better than BitCoin in several regards. SafeCoin has no transaction costs and almost instant confirmations, and it also has a hard-cap. Those features together form a service that also definitely has value, and it’s going to be hard to beat that.
Anyway, no currency is 100% stable, so whether you can call something a currency under the definition you use is subjective. The main fiat currencies of the world inflate heavily in the long term, and gold too can fluctuate heavily as we have once again seen the past years. For that reason I don’t really like using that definition. At what point did the Mark during the hyperinflation of the Weimar Republic stop being a currency? I think it’s weird to say that a currency stops being a currency, or that it never was a currency but that that could only be known in retrospect. Also, according to your definition crypto-currencies are not currencies, despite almost everyone calling them crypto-currencies. It’s confusing, the definition doesn’t match the every day use of the term.
I much prefer using the term currency for whatever is designed to be -or widely used as- a general medium of exchange and unit of account, and using the term money for those currencies that are also a store of value. Whether something is a store of value is relative and thus always debatable. Those who expect the Euro-zone will collapse in the coming decade don’t see the Euro as a store of value, while many others do. Those who believe in the world-wide rise of capped crypto-currencies may see BitCoin and SafeCoin as stores of value, while many others may not.
I also think making SafeCoin over-deflationary is dangerous. SafeCoin is not a SafeShare, it’s not only meant to increase in value but also meant to be a medium of exchange and a unit of account, i.e. a currency according to the definition I use above. The SAFE network cannot be owned, and SafeCoin doesn’t pay dividends, so SafeCoin is not a share, or at least a worthless share.
Deflation because the network is growing in popularity is a good thing, deflation because the supply is constantly shrinking is a bad thing. The latter will cause indefinite hoarding causing trade volume to be nearly non-existent. SafeCoin would fail as a currency. The former only causes hoarding until the SafeCoin owner believes the network won’t grow significantly for the time being, at which point the owner can start using it as a currency. Since everyone’s expectations differ, SafeCoin is always used by some people as a currency, and that number increases as the network approaches maturity.
It’s possible to make a stable currency but no one actually wants to do that. It just involves not having a supply at all and literally creating and destroying units as needed for credit just as banks do. What has a supply are the notes in circulation which represent whatever exists in digital form on the ledger.
Then you have politics getting involved, national debt, and so it’s not truly stable.
I don’t think people are involved with MaidSafe because they want another altcoin. People want the resources or they wouldn’t have bought Safecoins in the presale. To suddenly do a bait and switch and say it’s going to be some sort of alt currency is a terrible and dangerous approach.
It really is all about the resources not the token. Nothing else really matters to the majority of users. If we cannot get a good deal on resources (the actual wealth of the network) then MaidSafe is going to be worthless. Why not just use Permacoin, Ethereum, Siacoin, Bitcloud or any of the others? MaidSafe risks squandering it’s advantages and potential network effect if they mess up here.
Money like the Euro is not a store of value. It’s just a debt note. There is no value stored in a debt note. Debt just represents that you or someone else owes something of value. Actual wealth is in the goods and services owed.
You don’t need a Euro to have actual wealth. You don’t really need a particular global currency. Anyone can have their own currency to represent whatever debts they owe and in a lot of ways that is better because it’s more decentralized. We tended to have central national currencies because at the time no one else knew how to make debt notes which couldn’t be counterfeit and which could be stored safely.
The wealth was never in the notes. The service provided was the process behind creating the notes which was kept a secret. Now anyone can use technology to create notes like that making the old processes obsolete. It’s as simple as you deciding to issue Senecacoin and only accepting Senecacoin for all your goods and services.
I shouldn’t speak for everyone. I can only speak for myself when I say I’m not involved with MaidSafe to have another altcoin. If it’s not backed by the resources of SAFE network (if it doesn’t represent some share of those resources available), then it’s not worth it to me. I’m sure I would like to use MaidSafe but I don’t see anything particularly special about Safecoin except that it’s redeemable for resources.
Then don’t, don’t try to speak for the majority of users. I own SafeCoins as well, and I think both things will give it value. It’s not ‘just another altcoin’, since it has no transaction costs or confirmation times like all those you mentioned. That alone makes SafeCoin competitive as hell, even if it “merely” beats LiteCoin, SafeCoin will have been an amazing investment.
It’s not a bait and switch, it was clear SafeCoin was going to be a crypto-currency from the beginning, the fact you can buy network resources exclusively with SafeCoin is just one of it’s features. An important one, true, but definitely not the only one.
SafeCoin’s value is not hard-linked to the SAFE resource market. I think it’s entirely possible, no, even likely, that the distributed cloud market will at some point (or at several points) be saturated. Those who trust the SAFE network will already have all their data on it, and those who do not don’t care about how cheap it is. At such moments none will start storing more data on it only because it has lower costs. This does not mean at all that the value of SafeCoin won’t rise anymore, since people can still value SafeCoin more and more due to it’s currency merits. Then the value of SafeCoin has nothing to do with the resource costs anymore.
I think there’s still loads of confusion here and we need some kind of Economics for dummies type explanation soon to avoid FUD. People don’t get what value is based on resource wise and have concerns about all that flows from this. I am personally still a bit confused and I’m probably not the thickest person on the internet,…though I concede I might be here. Things need simplifying for the average Joe, ideas seem to conflict and whole area lacks clarity ie:
A drop in SafeCoin value would hence cause a reduction in total resources available,
I don’t get this bit, what about other things that impact on price? What if coin value goes to near zero due to FUD?
[quote=“luckybit, post:47, topic:320”]You don’t need a Euro to have actual wealth. You don’t really need a particular global currency. Anyone can have their own currency to represent whatever debts they owe and in a lot of ways that is better because it’s more decentralized. We tended to have central national currencies because at the time no one else knew how to make debt notes which couldn’t be counterfeit and which could be stored safely.
The wealth was never in the notes. The service provided was the process behind creating the notes which was kept a secret. Now anyone can use technology to create notes like that making the old processes obsolete. It’s as simple as you deciding to issue Senecacoin and only accepting Senecacoin for all your goods and services.
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And how would others value a SenecaCoin? A main benefit of a generally accepted currency/unit of account is that everyone has at least a rough sense of the value of that unit of account, and can thus make judgements about costs and profits.
For simplicity’s sake, let’s say the things I want to buy in life are food and electricity, and I sell my programming skills. You say I should issue SenecaCoin, but the only thing I value are food and electricity. Since just giving SenecaCoins away would mean I’d program for free, the only option I have would be getting food and electricity in exchange for SenecaCoins somehow. Now the supermarket and energy company both think they won’t require my programming services, so they don’t really have an interest in SenecaCoins.
So either I need to trade my SenecaCoins with another party that does want them and that provides me with a Coin that the supermarket and energy company do value, or the supermarket and energy company accept SenecaCoin and need to trade it with a company that does require my programming service. In the former scenerio, I may stumble on the problem that I can’t find a direct trade, so the only solution is to have a huge trading chain involving many different partners where SenecaCoins are traded again and again for different coins. This is not only extremely inefficient and time consuming, the main problem is that all the intermediaries may have no knowledge about software development and it’s corresponding costs and value, and thus have no clue how much my SenecaCoin is worth. The same problem occurs with the latter scenario. The supermarket or energy company could accept my SenecaCoin, but due to their lack of knowledge on the value of my services, they have no idea if they’re actually making a good deal or are getting ripped off. They’d first have to find a buyer for SenecaCoins that trades them for a Coin they do know how to value, i.e. the same problem I had in the former scenario.
A generally accepted currency/unit of account solves this mess.
What bit exactly? If you’re referring to the drop of SafeCoin value causing a reduction in total SAFE-resources available, it’s because farmers provide the SAFE-resources and get paid by the network in SafeCoin. If the price of SafeCoin drops, the costs of maintaining and powering their hardware may be higher than the reward in SafeCoin, in which case hardware will be turned off. This reduces the total SAFE-resources available, which should increase the SafeCoin costs of SAFE-resources. The increase in SafeCoin costs means a higher SafeCoin reward for the farmers, so eventually an equilibrium will be reached where farmers make a profit again and the price of resources is reasonable again.
As for SafeCoin value not being hard-linked to the value of SAFE-resources, I see it like this:
SafeCoin value cannot be lower than SAFE-resource value since you can only buy SAFE-resource with SafeCoin, but SafeCoin value can be higher than SAFE-resource if SafeCoin’s currency features are valued more than than SAFE-resources. This can occur in the case of SAFE-resource market saturation, the situation where everyone willing has already stored all their current data on the SAFE network. That means that the demand for resources does not increase anymore just because resources become cheaper.
Then we know that safe resource value is going down don’t we - at least until such a point as we have a fully fledged and occupied eco-system? Can we agree that that is the only possible direction until such a point is achieved - or not?[quote=“Seneca, post:51, topic:320”]
If the price of SafeCoin drops, the costs of maintaining and powering their hardware may be higher than the reward in SafeCoin
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So there is a direct link between Safecoin price and farmers/resources? If so, what about other impacts on price which have nothing to do with available resources? If the price crashes are resources withdrawn?[quote=“Seneca, post:51, topic:320”]
This can occur in the case of SAFE-resource market saturation, the situation where everyone willing has already stored all their current data on the SAFE network. That means that the demand for resources does not increase anymore just because resources become cheaper.
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This I think will be the situation at launch, where I think the price will be around 1 cent to reflect cloud storage space. I think it will follow the same trend for a while.
Are you basically saying that Safecoin does not derive it’s value from available resources.
Safecoin derives its value from whatever the market values it at.
I am positing that it is knowable to a large degree that Safecoin price will initially dive for a period of time prior to maybe picking up later as bells and whistles are added.
I am positing that this could cause major FUD issues similar to Mastercoin situation.
I am asking for somebody to say why it won’t, as I’ve given reasons why I think it will.
It doesn’t matter where the price crash comes from, the algorithm never knows the “why” anyway.
SafeCoin value crash → Reduction in available resources (until farmers break even)
Algorithm detects reduction in available resources → Algorithm increases resource price and farming rewards
Increase farming rewards → Growth of available resources (until farmers break even)
Equilibrium reached
That’s how I see it. In my view the algorithm should have a ‘target percentage of available space’ of the network, and should adapt the resource price and farming rewards to achieve this target. Too little free space available means the resource price should increase and the farming rewards should go up, so more farmers will join. Too much free space means the storage is too expensive or the farming rewards are too high, so it should lower the resource price and farming rewards.
I think SafeCoin derives it’s value from the popularity of MaidSafe in general. It doesn’t matter if there’s tons of resources available if none buys them. Popularity of MaidSafe may increase because of the services it provides. At the start these services will (hopefully) be cheaper cloud storage than it’s competitors, and a promising crypto-currency with better features than it’s competitors. That will increase the demand in SafeCoin, which will increase it’s value.
I don’t think SafeCoin price will initially dive, at least not if the launch goes well. The initial services and long term promise will be enough to attract more people.
This is a good analysis, I think. The only other factor to consider is that many will operate at a loss for some time on the anticipation that safecoin will increase in value. There is good reason to believe, looking at some of the superior aspects of safecoin, that it will eventually increase in value A LOT.
Will it ultimately be worth a lot? Take your guess.
If so, how long will it take? Again, make your best guess. The main advantage here is experience in recent years with bitcoin. A relatively small number of geeks worked with it for a long time, first as a curiosity and then as a speculation that it might become something. Now we have a relatively small number of very rich geeks
We’re starting with much, much larger adoption base of geeks and less-than-geeks due to the ground that bitcoin has broken.
Aspects of SAFE which give positive indications for safecoin are:
a. very low risk reward. If you have a modest computer and internet connection, you can be a farmer at almost no additional cost. If you then start having safecoin show up in your wallet, cheers.
b. free accessers will actually ad value to the network, and thus safecoin.
c. the buying of resources with safecoin should be incidental to the other uses of safecoin.
d. price discovery may take a while to get footing. Bitcoin operated for a long time before someone finally accepted 10,000 btc for two pizzas. Look where that has taken us over time. But having gone through that arc with bitcoin, safecoin will probably experience much more rapid adoption. I don’t think crypto-anarchcists are the only ones that recognize instant transfer, inherent anonymity, limited supply, etc., as valuable. I think it likely that we will soon have the problem of one safecoin being too large a unit to buy the minimum bump in storage, app usage, etc., and divisibility will have to be added.
Not trying to be didactic, just on a roll. The main point I’m making is that, though there is/will be a moderation of safecoin creation built into the network, I think adoption will ultimately cause safecoin value to go up steeply, which will cause adoption to go up even more steeply.
It is inevitable that the value will rollercoaster, possibly very wildly, until broad adoption starts to enter stability, as bitcoin seems to be experiencing now (though I’m sure it’s still far from a stable place).
All this is, of course, assuming that the networks works more or less as envisioned. If it doesn’t then this is all vapor-speculation.
Indeed. The main reason why MaidSafeCoins are still so cheap is because a lot of people are not (yet) convinced. The absence of a blockchain and the absence of a detailed risk analysis where all attack vectors are proven unfeasible by mathematics makes a lot of people skeptical. I myself am only 70% convinced so far, but the potential gains are much higher than the risks, so it didn’t stop me from getting myself some MaidSafeCoins (although I only have a few since I’m an indebted student).
When Bitcoin first came out, someone had to take a leap of faith and arbitrarily value it it. Thus we got the 10,000 bitcoin pizza. Then speculators/exchanges came in and the fiat price exploded because of mass media attention. Based on the positive or negative “flavor of the day” the fiat price jumps around like a rabbit.
As you said, there is no promise for a unique product or service. Merchants may decide to stop accepting bitcoin because of reason X or law Y enacted by governments. They are already afraid of this happening which is why Darkcoin has risen so quickly.
Because there’s no exclusive (product or service), Bitcoin has no base valuation to start. In fact, 99% of the altcoins do not have it either. They differ mainly in functionality: transaction time, network security, coin cap, anonymity. But that functionality can be forked easily. What cannot be forked is resources: hashing power, exclusive products and services. Let’s hope Amazon never figures this out.
Demand will always be fickle but the Network Purchasing Power of Safecoin doesn’t have to be. We can code it into the system to be more stable and steadily rise over time. Have our cake and eat it too, YUM!
Hi Seneca, I don’t have a problem with everything you are saying, (struggling though, but I’m sure I’ll get there). To simplify my issue, once you run all your algorithm scenarios, ifthere is a predictable dip at the beginning consistently - then I think we have a problem. If not, and it is all pure speculation, then I don’t think there will be a problem. That’s it in a nutshell.
Safecoin as @luckybit pointed out already has 1 unique product to start with. It is SAFE Storage. I think a lot of the FUD comes from thinking it will be the only product. This is not true. The SAFE Network is an online store. We can fill that store up with an infinite amount of products and services, all of which Safecoin can buy semi-exclusively. We can not force merchants/builders to only accept Safecoin. It goes against our free market ethos.
Increasing the total amount of goods and services compared to Safecoin’s supply will force the purchasing power to rise. This is supply and demand economics. Velocity of trade will also increase Safecoin’s purchasing power within the network.
I know some people want assurances the fiat value will not dive. Unfortunately, that is not in our control. What we can control is the Network purchasing power of Safecoin in terms of SAFE Storage. It is the one product the Network handles autonomously. Based on that Valuation Anchor, builders/merchants have a base valuation to price their products and services, and the free market will take over from here.
Doing it this way makes it more likely to go up in fiat value because Safecoin will continue to buy more in the future. In fact, I would say it might actually put a floor on Safecoin. Consumer demand is the remaining variable. It will be up to the community to decide on Safecoins usefulness.
The KEY is for algorithm to adjust the Safecoin supply in relation to the total storage it can buy. We should design it to gain purchasing power based on “good” deflation, an increasing aggregate supply of storage.