That’s correct,
I’m not comparing costs. I’m comparing the product/service. As long as the product/service is viewed as equivalent, then people will value it accordingly.
This is why prices fluctuate below their production costs, and why a business can go bankrupt. When a competitor finds a cheaper way to provide the same or better product/services… consumers eventually migrate to it.
I agree and that’s exactly why I think 0.01 is too optimistic in this scenario. But the fact that we could in theory dump the price down to 0.002 is like bringing m1a2 to a gunfight 
Dropbox alikes are toast!
Every file is stored at least 4 times on the SAFE network.
If we have 4 copies of each file, in a network with 1000GB of available storage, only 250GB can be filled with different content.
Wouldn’t we need to take this into consideration when calculating storage cost ?
Because to actually be able to store 1000GB, we need 4000GB disk-space which might belong to either us or someone else.
That is a good question.
Farmer Costs
Originally, I tried to calculate “everything” in terms of costs which leads down a deep rabbit hole. Yes, there are other things to consider like: caching, bandwith, electricity, CPU processing, RAM… etc.
The biggest wild card is how de-duplication affects total storage. Even with 4X file redundancy, de-duplication has the potential to reduce as much as 90%, which is incredible!
This is incalculable without a test Network and near impossible with a live Network.
I decided to keep it simple and give a bird’s eye view for quick valuation. Ultimately, the total storage cost is expressed by the SAFE Network as…
1 Safecoin buys X GB of storage.
The (consumer) can look up how much 1SC is worth in terms of fiat value, and determine if they are over/under paying for similar cloud service. Simple enough right?
The (farmer) can calculate their individual costs and compare it with potential farming revenue.
Some farmers will use old hard drives and share their current bandwith, while others will buy new hardware and setup dedicated ISP services. Actual farming costs vary from farmer to farmer. 
Thanks for the rundown on value methodology .Well said on all points, dyanamaka.
Great posts on the math behind the valuation $SAFE coin!
Since I did the original Presentation on the Economics of SafeCoin, I always like reading about the different methodologies being applied to try and calculate the price of $SAFE and trying to predict where it will be at launch.
I think there are two elements to incorporate into the valuation methodology:
I find the math behind the Cloud Storage numbers pretty interesting, although I think there will be a few differences in the User Experience (UX) of SAFE in that it will be less fluid in terms of Integration with other Web Services, which is where Google, Dropbox and the others excel. So I think that the number will be closer to hard-disk storage multiplier (0.002) when comparing valuation, in the early stages.
I think there will be a lot more valuation upside on the Network Utility element. I know that you don’t need $SAFE to access the SAFE network, but I think that for a lot of the top apps that launch you will need to pay a few $SAFE to play. As seen with $ETH, people are going to pay a premium in the early stages just to be a part of something that *could be big. And since SAFE definitely could be big, I think there will be a lot of demand for the coin from users who just want to be there when the network, and the first batch of apps, launches.
In combination, between the Cloud Storage and Network Utility, you *could see quite a big valuation multiplier at launch time because $SAFE has both a very tangible valuation metric (Cloud Storage) and that unknown intangible (Network Utility) depending on the hype cycle that builds around the launch. Furthermore, I think Crypto as a whole will be back in a bull phase in the coming months, which would also push demand for the coin up.
Drive dropbox etc, are the least fluid with integration. With all the borders it is more friction to use, subscribing for multiple services, managing logins, and insecure storage locations.
Every file is stored 4 times on Amazon, and Dropbox, etc. Each of these services also use redundancy and also use may intermediary models for hoping that data will come and get absorbed correctly.
already did.
I don’t think this applies to us, since the coin is trading for a year and has hardly a hiccup in any sustained high price.
I think that hype will only come later because of the seeing that safe network is ticking, and all is good. This is when the people will rally the coin because of wanting to use applications. And I also think it is for the long haul that people would get involved in farming and owning the coin, versus just only early on and hype.
I tend to apply a certain “formula” when assessing an asset value:
“Would I really buy this? Do I really need this?”
When ETH started trading I realized I am not that interested into buying yet because it does not offer immediate value like bitcoin say where you can easily transfer value because its network is already up and running, exchanges are plenty, shops accept it etc
ETH still has a long way to top and it will come in the form of DApps.
But when I think about Safecoin, and I make abstraction of the fact that I already own Maidsafecoins, I realize I would buy Safecoin to store large amounts of photos/files as soon as the network is stable, without a doubt.
So that demand will exist from beginning and with user base growth we’ll hopefully an increase in safecoin price while the price per GB of put will go down in terms of FIAT money…but it is going go be gradually in my opinion and hopefully not a pump and dump, which is way better
Good points, and I think your logic applies to most people who are on the SAFE forum and who back the project to date.
But I think there are multiple layers to the SAFE story that will become more apparent at launch.
When I talk about the ‘hype cycle’ surrounding $SAFE, there are always elements about new ventures that are real (ie. safe data storage) and those that could be real (ie. a SAFE Facebook), and it is that combination that will drive the price. This is why a lot of tech companies have huge valuations, while others are valued very closely to their Cashflow/Revenue multiplier.
IMO, when SAFE launches, $SAFE will not be priced just on data storage. There will be many factors that drive people’s psychology and motivation for purchasing the coin, and this will in turn determine the valuation, which could be much higher IMO than a simple data storage benchmark multiplier.
I get that this is the tangible part of SAFE today, but I believe that there will be other intangibles that come into play as we go down the line, including Macro factors that will affect Cryptocurrency as a whole.
reposted from: MAIDsafecoin, Price and Trading topic (Closed) - #461 by anon81773980
Farmers give the network information on the price per GB by supplying or withdrawing storage space depending on what the network is currently offering (safecoin per GB). if the network needs more storage then it increases the safecoin it pays to farmers and that signals farmers to provide more storage.
But the value of SafeCoin is indeterminate from that information. It’s not linked to the value of storage space it’s linked to the value that people ascribe to SafeCoin - if the coin is popular and hence has a high value (globally) then farmers will provide more storage for less coin, yet not less value from the network.
The value given to farmers per GB (by the network) will always be related to the cost that farmers have to pay in value. But the value of Safecoin itself floats completely freely based on global use and perception.
I never assumed that farmers would not be targeted. I never assumed human beings have to be farmers. I envisioned a truly autonomous SAFE Network when I posted back then. I’m more pessimistic about the success of SAFE Network now because I can see the human beings behind it and if I can see then so can everyone and if everyone can see then who are going to be able to farm SAFE Network without possibly risking their lives being ruined or going to jail or whatever else?
If SAFE Network were autonomous like I described it would reduce the risks on farmers because anyone could spread nodes around a city and no one would know who did it. On the other hand when you have to farm from your home PC or whatever it’s going to leave a trail right back. It’s also less redundant.
Overall I would say we have to wait and see but I think the question is what exactly is the risk to farmers and can we reduce the risks? Also it’s a matter of costs, but I think Safecoin might pay for that. In order for it to make sense Safecoins have to cost more than they do now… 400 billion? But the available supply is 400 million.