The Perils of Big Farming

Some of these ideas have been touched upon here and there, but I think there are some back-of-the-mind assumptions about big farming that are incorrect.

The cryptocurrency space is so used to Bitcoin as the only real-world example we have to gauge against that I think some reflexive thinking gets put in that we should consider.

I’ll hope that @dyamanaka will figure out how to do some number crunching to see if my thoughts bear out.

I’ll start with my conclusion: There no real danger of big farming, at least not on the level we think of when we consider the massive resources of Rackspace, Google, Amazon, etc., entering in as farmers and eclipsing small farmers from getting appreciable safecoin. Further, it is doubtful if it will be profitable for any farmer operation to operate as a dedicated business model on any sizable scale.

My reasoning: The design of the SAFE Network is such that it favors already-owned and operated, consumer-level devices in terms of economy, because these are resources that people will already be owning and using, whether they participate in the SAFE Network or not. For an individual to join and dedicate resources to the network incurs a very, very low marginal cost to be offset by any safecoin earned. So the safecoin profit-bar is very low.

Just that level of contribution to the network, when scaled to even just 100k users is a huge amount of resource. I don’t know what it would take for a server farm to match, but it is considerable. (This is one place where @dyamanaka’s analysis might help.)

The next step up is the “gentleman (or -woman :wink:) farmer”. This is someone who has some spare bandwidth and perhaps gets a raspberry pi or some such, or presses a couple of old but efficient netbooks into service. Or someone who has a pretty powerful machine and runs multiple vaults on it. These are people who can probably even afford and be willing to run at a bit of a loss in terms of current exchange rate for safecoin, because they really just want to participate and/or think whatever extra safecoin they make will be worth more as time goes on. The marginal cost here is still quite low, the profitability is not critical, and it’s a very flexible model, where the individual can adjust the setup easily according to their results, desires, abilities, etc. This class should give the network a huge extra boost in resource availability, again, very decentralized and under the momentary control of contribution.

Then we go beyond that we get into a completely different situation: that of the commercial farmer. Per the design as I understand it, there will be a decreasing utility for vaults above a certain size, so efficiencies of scale are minimized. There may be some earning advantage in having high bandwidth capabilities, speed of processing, etc., but it is doubtful if this will be a huge factor. Such an operation would undoubtedly earn a lot of safecoin, especially early on (when is would represent a higher percentage of network capacity), but let’s look at the downsides.

A commercial operation of any scale would require capital outlay, up front, either in terms of out-of-pocket or borrowed funds. This becomes a big speculation with much more limited ability to shift behavior (and thus expense) by turning equipment off and on based upon profitability.

While individuals will likely soon bypass conversion to other currencies and start spending safecoins amongst each other directly, commercial operations will have to depend on exchanging their safecoins for other means of paying the bills (at least till safecoin becomes accepted more universally). This will expose the enterprise to volatility risks, which also make such a venture less appealing.

Such commercial farming, if profitable at first and thus expanded or adopted by other competing ventures, would force a glut of capacity on the network which would force the farming rate quite low, again making it unprofitable and forcing such commercial farmers out of business because of unprofitability. Individuals and small, excess-capacity farmers would not find the lower farming rate especially challenging because their marginal cost is near insignificant and earning some safecoin would most likely be sufficient to cover their expenses and moderate use of the network. Also, individual and gentleperson farmers can painlessly withdraw from or enter into farming on the network as they are not carrying debt burden, additional rent, utilities, etc.

There is one other case to be considered: The commercial Farmer who is also a commercial End User. This would be something like a major insurance provider putting all their accounting records on the SAFE Network because it was the most secure, and running the necessary equipment to offset the expense, and perhaps earn a bit of bonus safecoin in the bargain. This is not a problem because it is a balanced, sensible use situation.

In examining this, it becomes really apparent that the incentives are directed to balancing the network in a sweet spot of resource-vs-use to minimize perverse incentives which inevitably crop up in hierarchical currency systems.

Not sure what this all means in terms of being a governor against speculative price fluctuations of safecoin, but think it bodes well. I don’t have any idea what the upper limits on safecoin are, but I think these factors will prevent the huge bubble/burst swings we’ve seen in Bitcoin.



I don’t think that farming will be terribly profitable. If I give 1 TB worth of space, It should be expected that I ought to earn enough SAFEcoin to store 200 GB or slightly more… (4 copies of each chunk, Plus a bit more for duplication minus 10% for developers/contributors Minus a bit more because data has to hop from 1 vault to another, minus a big chunk because this data can never be deleted.)

If it is super profitable, it will be because of speculation and other factors driving the popularity of SAFEcoin, not because of the farming itself.

But it doesn’t really matter. The benefits of using SAFE are huge enough that it should still be extremely compelling to use/participate in even at break even… Nearly everyone has excess storage and excess bandwidth.

Billions and Billions are lost due to data hacks… It is only a matter of time before the folks that are footing that bill recognize that they have a lot to gain in being able to store their most valuable and vulnerable data on SAFE… Those guys also are likely to have large data centers with excess capacity, fast and redundant, internet connections, and zero start up cost (They already have server farms and likely retire servers continuously.)

I suspect big farms to be driven by “why not” just like most of the rest of us… If I give X, I will be able to store my data and not worry about running out anytime soon. For Me, that is probably a Terabyte or so. For some of these big players it might be a hundred times that.


Agreed. I’m not worried about the big boys coming to the playground. My point is that they will then be incentivized to use the network, not just farm, which will tend to stablize and speed it up, and allow a balances in and out breath of safecoin.

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More resources provided, regardless of the source (PC, Data Center, Mobile Phone), adds to the wealth and storage purchasing power of Safecoin. We want as much storage as we can get. By all means big farmers, come in!


I agree. I’m just pointing out that there’s no chance of centralization in the bitcoin miner sense, and it is questionable as to whether it will be profitable to build huge data center farms.

Not a peril to the network, just he big farm venture.

A large number of mega farms would likely make farming SafeCoin worthless, then they would die off due to lack of profit.

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Kinda contradictory there. If there is plenty there is plenty, and no need for the network to buy more… If there is a shortage mining will be profitable. If it is a well modeled market, it should always find an equilibrium where it just as profitable as it needs to be.

If the network lives up to it’s potential People will use SAFE because SAFE is worth using, Not because the network bribed them with Crypto… Yes, it costs a bit to keep your vaults going - but a pretty insignificant amount. Chances are your machines are on full time anyway… Most of us pay various fees for various internet services that may offset any costs of maintaining the vaults…

I don’t think the network needs SAFEcoin to succeed. It is a nice bonus. It is also a good insurance policy – If the network needs more it can provide an incentive for the capacity to be made… But SAFE as a secure network is profit enough.

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As @stonesfever says, he’s talking about mega farms, and he’s right in theory, though because of the lay of the land it won’t come to that, I think. As I lay out above, it’s altogether different for the individual user or “family farmer.”

I agree that people will use the network because of it’s utility and features, but I do also think that safecoin is vital. It gives incentives and disincentives, and thus yields information that all players need to guide their actions in relation to the network.

Edit to add: It will be interesting to see how this all plays out, though. People may horde their safecoins, considering (likely correctly) that the price will go up over time. But, then again, since they’re able to continue farming it, the velocity may be pretty good.

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Speculative Answer,

Bitcoin’s (Mining Difficulty) is somewhat similar to SAFE’s (Network Average). Both indicate how hard it is to earn rewards. However, the big difference is…

  • Bitcoin Miners, compete against every other miner in the Network, encouraging centralization.
  • SAFE Vaults, compete against 3 other vaults, encouraging online reliability, and high bandwith.

I just had a power outage 2 days ago. Having back up power wouldn’t matter because my ISP went down as well, haha! If Big Farms (Data Centers) drive up the Network Average, then it will be hard for smaller vaults to compete, especially with poor online reliability.

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I just had a power outage 2 days ago. Having back up power wouldn’t matter because my ISP went down as well, haha!

That’s why you need to become your own ISP. hint hint, CJDNS.

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We need to take back the “last mile.”

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Skype, Bittorent, TOR, etc seem to survive just fine without the crypto… The incentive is their own merit – and the SAFE network ought to out-merit all of them, if it comes to full fruition…

I think SAFEcoin is important, but "Vital’ is probably too strong of a word… I am sure the folks that up the 7 million for the crowd sale don’t want to hear that.

If the network reaches fruition and is used, I used it can survive on it’s own merit. It can probably thrive even more with the Crypto, but the merit is ample on it’s own. I would like to see the farmers paid less and content providers paid more, if it turns out that merit is ample… Time shall tell.

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This may be true to a degree, but compare the vast amount of vaults spread over the world that will continue to function, and compare the size of that to the resources in a data center. (This is what I hoped you could get metrics on.) Data centers are pretty awesome, but will they really throw all of that at the SAFE Network just to farm? I think not, unless they are also using the network to store data and communicate, in which case, they’re just a big block of users like the rest of us.

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I think you may be overlooking some of the things that safecoin makes possible. Reward for development (app and core). Reward for content contribution, at least via a portion of the app reward as in N99’s plan. SafeX, which similarly plans to rebate app rewards to users.

All this stuff isn’t about “profit” in the Ferengi sense. It’s actually another vital communication medium, without which the network couldn’t balance itself.

Data centers will likely not be used .

cost and power expenses alone would be huge, for purely speculatory value to begin with they might try and build data centers but they wont run a huge amount of profit , and if a data center goes down is worse than a single node

they have huge bandwidth problems trying to connect hundreds or thousands of nodes using the same line connection, if they have multiples? that is extra costs .

also the some of the algorithms actually reward smaller node more % earnings so for example 1 tb would earn a fixed amount but 100 TB would earn less than 100 totally unconnected to each other 1tb drives

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I don’t think they will either. But we’ll see what happens.

As far as world wide metrics (Individual VS Data Center), that is very hard to do accurately. I would need to survey individual SAFE farmers…

  • How long they stay connected to SAFE?
  • How much storage space they contribute per vault?
  • How many vaults they setup?
  • How many individuals join SAFE?

I doubt people would be willing to participate my survey. And since we don’t have a Network yet, it’s pointless to do one right now.

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I agree that for SAFE, large datacentres would not be feasible. For one they operate to make their owners profit. In the SAFE network each datacentre would be competing against each other and the 100’s of thousands of other private people. Not enough profit if any.

I can only see datacentres making any profit in the startup phase before it is widespread, but at this stage its too unpredictable and why would they stop making money with their services to go over to SAFE? Would they? Dare they try?

I foresee that for the SAFE network, it will have its own “datacentre”, which might even be called “SAFEcentre” for want of a better word. This would be the private person (or say SAFEpod) who is not so interested in profit, but welcomes the reward as @fergish said and is there because they prefer SAFE. Fibre to the home, 10 or so machines in the home and loads of storage (for a home that is) and provide more than 1000 vaults all up. I’d say that there will be a few thousand of these around the world after a couple of years.

Interesting. I hadn’t looked at it this way. Might be a bit expensive to set up and run (mainly the bandwidth), but if you struck the right balance it could be a decent home business, and very good for the network to have a bunch of these dependable clusters spread around the world.

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I doubt it would be a business as such, but still using “spare” capacity as some homes have multiple PC+tablet+phone per person, just like one I am thinking of now. 4/5ths of his power bill is because of the PCs :confounded:

Would it be profitable? I doubt it would be if equipment is bought specially for it and only used for SAFE. But using spare capacity, then the rewards would be on top of what they are currently doing.

Very much so, and I would think that it would be a motivating force for many of them.

I think in the beginning stages before average storage rises too high, the right balance will be home setups with a number of very small computers. For example the RPi or the CHIP, and initially use a portion of the built in storage with vaults 1-4GB and then add USB sticks when storage average rises.

the 9 CHIP draws on the order of 2.5 watts (during WiFi comms), has enough spare storage to start on its own, then add a 10 USB stick when needed. An old PC power supply could run 40 of these easily (100Watts draw Max, 2.4KWH/day, 60cents AUD/day) and provide 100 vaults. Working out the right number of these "CHIP"s is key. But as long as they earn more than the costs then its worth keep them on line.

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Don’t forget that there’s no idle bitcoin mining, but there is idle MaidSafe farming.