So let’s assume that the price of Safecoin is £0.05 on launch. Some press coverage happens, in 12 months it’s featured in the New York times.
Amazon CTO reads it and thinks; hmm I have a load of unused disks and I’ve already paid for the drives that are sitting there empty until someone orders them via Amazon Cloud. My bandwidth costs are fixed and already paid for the year, mostly through peering agreements.
He works out that the electricity cost of the extra CPU cycles to run a vault will be £0.01 per month and he’ll earn £0.05 per month on average. So he get’s an engineer to write a script that deploys all the spare drive space to vaults, so long as the monthly income remains above the cost of the electricity. There’s now loads of storage available on the network so the Safecoin price drops. It actually drops below the cost of the electricity because of fear and the irrationality of markets.
The engineers script detects this and switches off the gazzilion petabits of vault storage. Does this cause network problems?
The Safecoin price rises to encourage farming. The script detects this and switches on the gazzilion petabits of vault storage driving the price down again. So is this the new price for Safecoin? The cost of electricity to Amazon?
Probably some errors in this thought experiment, but it doesn’t seem entirely implausable?
It quite a complex question and not one that can reliably be answered until the network is running really. I mean the logistics of how the events would take place, not if amazon was itself a huge part of the network.
If they turned on those hard drives , then turned them off in less than a day because it changed farming rates to an unprofitable level, their hard drives wouldn’t of stored much data to begin with . there would be very few chucks of data on their hard drives .
If they used their unused hard drive space , with the program you speak of and it doesn’t drive the price down, then i don’t think a huge shut off would happen, it would be rented out slowly over time to other people paying for the amazon service. no one would be ordering an amazon cloud storage of several peta bytes.
price per safecoin goes up against the $ because it buys so much storage space; Safecoin price would likely go up if it buys you way so much storage space.
Also to put it into perspective, amazon charges $0.03 per month per gigabyte… when you store with safecoin it’s a one time payment to store data forever.
if amazon was the only farmer online, and was bigger than 75% then it will likely very much affect all the of the network.
I see very little risk of a company like Amazon doing something like this, but if they do, I think it would show the market that a huge company like that has faith in the Safecoin protocol and business model, which could cause the price to surge…and would also boost the notoriety of what may end up being their direct competition! Every person using SAFE is one person not using Amazon and one person Amazon can not charge for space or data mine for info to sell to their partners…it will be interesting indeed to see how this will shake out!
Only thing is, as far as data from the SAFE Network, we’d never know that Amazon was doing it. That data would have to come from an outside source. We could see excess churn, etc., but wouldn’t know why directly. Such is the beauty and the peril of the network design.
How about the simpler idea being that it will be always beneficial to make a few safecoins
from any unused storage that is hooked up anyway in many households , by simple users ?
It might not pay off to be a smalltime farmer if the big players dump resources on the market… They will be able to deliver faster - and will gain the most rewards…
It is what it is – the market will sort itself out – The thing about markets when they work properly is that giving up stuff that is available in abundance rarely makes anyone rich… SAFE isn’t going to change that… Although some folks have high hopes. I see a lot more benefit in the freedom and the censorship resistant aspects than the economic dreams.
Just because someone has a ton of storage available doesn’t mean it’ll all get used or any of it for that matter. The vault rating comes into play, where it fits in the XOR address space and other things I’m forgetting or unaware of that are being taken into account before the storage is used.
Depends on what you mean by “pay”. I don’t think it will give a Basic Income, but it should pay for network usage and hopefully a bit more, even if server farms weigh in heavily. If the server farms get involved, I see it as better service for all, and they’ll be compensated for the resources.
I really doubt that we’ll see lots of this going on, especially at the start, and after it becomes a good move for them, the general uptake will be enough to balance it, I think.
The “conventional business wisdom” that rules such big operations makes steerage similar to an oil tanker. It will take them a while to get the picture, more time to decide to act, and then a while to change direction.
After all, we’re just small time idealists with just 2000 on an international forum. From their perspective we are perhaps wishful thinkers or crazies, not anchored in money and power. They won’t see such a project as a threat, or factoring into a proper business model for some time.
Who knows, they could be right. We may be deluded or overly hopeful. I don’t think so, but I’ve been wrong before. But if we’re right, it will change everything, and they won’t see it coming. They haven’t fully appreciated that Bitcoin alone is capable of changing everything. SAFE is beyond their scope.
If the market is flooded, storage will be cheap… So there is that upside… It is better to have excess capacity than break even capacity…
Dumping is never profitable – but the big players will likely win on speed, as they are likely to have redundant massive pipes. While you or I are going to have a subsistence level pipe, engineered to download more than upload.
I do think that there is a ceiling to how much farmers can expect to earn – and that will be “how much does it cost to run SAFE on AWS or one of it’s competitors” Because if you can farm with the click of a “Create instance” button, people will do that if it is profitable, and they will cease if it is not profitable… Friends of mine would have “Turn it off at x price, turn it on at Y price” scripts written pretty quickly…
This may well be true, if they decide to get into the game. But if they do I doubt it will be soon. I just can’t see it in their business model.
Even so I doubt that AWS would be stupid enough to turn it all on and turn it all off at the same time, especially if they have a big portion of the capacity. It would have them whip-sawing in and out. More likely they’d use a proportional approach and try to balance the edge of profitability.
Yah, I don’t see amazon themselves playing – But anyone can use their platforms… A smaller player with excess capacity may be inclined to write a script Like I described… But more likely just entrepreneurial hackers…
No one mentioned the auto balance algorithm for safecoin production from what I see.
In case the networks is abundant with free space, the safecoin production rate will decrease, so to balance the excess. The opposite is true as well, when the resources are scarce, there will be more safecoins produced. So in general, the network balances itself out, and big players cannot take the big chunk forever as they will quickly descend down the negative profitability road.
In my opinion, fiat price per space will go down in time, safecoin price versus space will remain constant/decrease within certain limits, but the value derived from its other use cases should make the safecoin more valuable in $ terms: variable factors: speed of adoption, apps, ease of use, cash like characteristics, more demand in general for constant or limited supply
This might do them much more harm than good, because turning off your vault hurts your rank and decreases the amount of data your vault is trusted with by the network and able to earn SafeCoin on.
Shutting off your vault is shooting yourself in the foot; your vault needs to prove itself reliably over time to earn the best rewards.
Maybe, but these aren’t long term players. They are seeking the quick buck…
If its on the table the scoop it up. If not they don’t… Like I said - it only provides a ceiling to how much profit can be made.
As far as I have heard files are given to vaults based solely on hash address proximity – You will initially have less files because you have to start fresh, but the is quickly remedied by having 99.95 percent uptime and redundant connections that a data center can have…
It’s not only storage that decides the price of SAFEcoin. I was just thinking about it today. It’s storage/computing and censorship resistance DNS registration.
SAFEcoin is way more valuable than can be expressed in fiat currency. We are dealing with a whole new idea of money here.
Even if Amazon makes a gazzilion petabits available, other people will also be farming. Who knows if only a few petabits is used by the crowd, maybe the SAFE Network might replicate itself if there would be storage left, to increase it’s survival chance. Kinda like how humans will grow their organs in labs.
It would be fun if the SAFE Network could become a twin an communicate like twins do.
Now that i think about it, if everybody starts registering name on the ingenious SAFE DNS will current dns providers survive, because who is there right mind would want to pay annually for a domain name that’s not even secured?
I dont think we will know any of this for at least a good solid year or more. once all of the variables have played out and we can begin to simulate and make predictions based on those past events effected by all of those variables.
I personally suspect the price to fluctuate a little but nothing like Bitcoin and only because there is so much input. I mean trading alone will effect the price and potentially inflate it just based on speculation but because we have prices to PUT which farmers earn I suspect this will level it out if there is enough PUT volume because the network will raise or remove rewards and hence supply/demand is kind of more easily regulated by farmers switching on and off.
I think the more interesting thing personally will be to see how app developers deal with the value in price changing so often.
As soon as the “big players” dump resources on the network, then the available space will exceed TB+TP+TS and mean that farming rate approaches zero and it takes 2^64 gets to achieve one farming attempt. The big players will then say the electricity cost is way too much for no coins.
“big players” will have to limit the amount of resources supplied to the network to give them ANY rate of return. That in itself will mean that the home farmer will also be getting coins, because they still will be supplying the majority of disk space.
The simple economics will limit the “big players” to only supplying a limited amount of storage space. As home users increase they will have to decrease just so they can get any coin.
