Interesting brain teaser. My guess is that it would just mean that even more of the conversion would take place and safecoin would be even more valuable. It would also mean that more people would start trading in safecoin directly, bypassing intermediaries. Look what happened to alcohol during US prohibition, and what’s happening to drugs all over the world with current drug prohibition. And safecoin is far cooler than either of those. “Say No To Safecoin” as a government slogan would have a marvelous affect on the price and use.
Some things seem to be being overlooked in this thread from what I’ve seen:
Gold is valuable in jewellery, dentistry, electronics, etc., but the vast majority of its selling price is that it has utility as a monetary store of value. Safecoin is not just backed by available hard drive space. It is only paid out on the basis of proven resource contribution, but the value has a number of other inputs. Such as the facility of the SAFE network as a whole–its concensus mechanism, its secure and private communication and storage qualities, its uncensorability, its future potential to host distributed computing and a bunch of other stuff we haven’t even realized yet. But, like gold, the monetary value of safecoin can far exceed even those tremendous resource backings, because of its superior monetary qualities: speed and ease of transaction, limited quantity, anonymity, etc., not to mention ubiquitity of distribution.
Abundance of resource contributed to the network will drive the price of those resources down, yes. But that should, in fact, drive the safecoin price UP. Safecoin will always retain its value as a private store of value, the exchange of which can’t be controlled or prevented. Yes, constraints can be put on the “legal” exchange of it for fiat currency, but as it will be very pervasive in its creation (small amounts of it turning up in many, many, many hands all over the world) anti money laundering laws will be ineffective and will only drive people and even companies to start bypassing fiat altogether and just start accepting it as value directly, even if under the table. But hey, I’ll be happy to pay cash to any neighbor who has it and can’t find any bank to exchange it to–for a time, anyway. After a while, who’ll even want to accept the valueless paper.
As the price of safecoin goes up, fractionalizing it will be implemented before long. There really is no cap to the price, and since the network will have better and better features and functionality as time goes on, and since it will be easier and easier to dedicate resources to the network (as confidence in it grows and less resource is held back), purchase of full network access should start approaching free.
Applications which call for one safecoin to do their job today will have to change to only require .01 safecoin soon, or they will be abandoned for other apps.
The proof is in whether the network and safecoin perform as or better than expected. If they do, there is no limit on the upside of safecoin in the long run. There will undoubtedly be fluctuations, but bubbles will only drive more resources to the network and those resources are not as likely to be turned off so quickly because they won’t be so expensive to continue to use even after the price corrects, unlike Bitcoin which uses vast electricity and special hardware that becomes unsustainable if the price drops much after a long run-up. The only ones who will be really hurt from a price drop will be those who over-leveraged to build big SAFE data farms. Such farms would take a while to start covering their investment in any case, while people with extra resource at home already will be losing nothing to continue using their hardware. It’s really hard to envision where the top might be.
All this is just my best guess based on the dynamics I see, so I’m likely missing something. But it’s definitely not as simple as “How much does it cost to store data on the SAFE network as compared to Dropbox”. Not even close.