Buy MadeSafeCoin now or save dollars to buy a farm at the launch?


#1

As an economist, I am questioning myself: “Buy MadeSafeCoin now or save dollars to buy a farm at the launch?

Lets say, I have 8 000 $ available for the most interesting project I have ever seen.

There are three main possible ways how to support a project and make an optimum profit:
a) wait for the moment of the project launch, buy some hardware and start farming immediately
b) buy 16 000 MaidSafe now, sell MaidSafe at the launch and buy quickly some hardware
b) buy 16 000 MaidSafe now and start selling them slowly after the launch of the project and buy the optimal hardware

For a first look it seems reasonable to me go in the direction c). I expect the price will rise significantly so there will be liquid profit at the time of the launch.

But what if the incentive for farmers is so huge at the beginning so it is very easy to mine 16 000 MaidSafeCoins with the hardware cheaper than 8 000 $. Then b or a) would be better.

And what if I am wrong and there is going to be lower dollar price of Maid at the moment of the launch? Than a) is optimal.

Lets say I expect a) is not going to be happened so I am deciding between b) and c)

The only reason I could be little bit afraid of investing into Maid now is the text in the whitepaper where is following:


The mining speed per vault is projected as:

Time - Number of coins (per vault if initially 2000 vaults)
first day - 800
first week - 1 800
first month - 4 000
first year - 19 000

The size of the seeding network is estimated to be around 2,000 vaults, that being the case it is projected that the first month income will be around 8M coins and 38M in total during the first year.


If I should compress my dilema into a few words, it would be:
"How much hardware I need for mining 16 000 Safecoin in a first month?"
and
"Is it even possible there will be much bigger inflation (not 38M, but 380M) in a first month?

What do you think?


#2

You seem to be using a computer to post here. Thus you will have a vault at launch. You are a farmer at launch without buying anything. Maybe you might want to have a large farm so you buy a harddrive for $100

No need for $8000 to be a farmer. A few hundred would get you a modest computer and hard drive.

Thus I’d choose that you buy MAID now, and sell later on when MAID (SAFEcoin) goes through the roof after launch.[quote=“lubinew, post:1, topic:14261”]
How much hardware I need for mining 16 000 Safecoin in a first month?"
[/quote]

I doubt you could even do this with any hardware.

The reason being that when the network has plenty of storage the reward rate is low, very very low. Thus the more hardware you supply the lower the reward for everyone… After things settle down then rewards will likely be higher when people reduce the amount of unneeded resources to save power.

The whitepaper is old now and those projections may not be realised at all. We don’t know. It is likely that if the rate of rewards is high then the price of SAFEcoin is low and people are not that interested in farming. This is what the whitepaper is based on. But if price of coin is high then everyone is going to put all their resources into farming and the reward rate will be very very low, and this is more likely since the price of MAID is already reasonably high.


#3

Yeah, I’m with @neo

d) Farm for utility, invest for profit.

Buy your coins now and don’t buy any hardcore equipment, just use your spare resources to earn as much as you need to use and support the network when it launches.

Also, don’t sell gradually after live launch, in 2020 you’ll be telling people how you used to have 16,000 MAIDs and now that they’re at $200 you really regret selling them for $2. If this projects launches then the price will keep going up for a very long time.


#4

Of course its possible to mine 16 000 Safecoin in a first month.

Maybe you expect 8 000 would be just a little part of my portfolio. Actually 8 000 is a huge part of my portfolio, and therefore after the rise to 5 $, it will be almost 80 % of my family wealth. In that case it would be too risky not to sell and reduce the exposure. Almost All-in into crypto is always a bad idea!


#5

I can list a number of cases where this is not possible.

You cannot say for a certainty that it is possible.

Here is just one.

  • You put up 10,000 vaults to attempt to mine as much coin as possible. 1,000 TB worth
  • People put up 200 TB of data onto the network in the first month.
  • SAFEcoin RFC says that the farming rate is 1x10^-18 GETS per coin. (due to the amount of spare storage space)
  • Thus rewards are only given out for every 1000000000000000000 GETS

Here is another

  • You put up 1,000 vaults with 100TB of storage total
  • Others want coin too so each of 1000 people put up 5 TB of storage each (5000 TB total)
  • The the rest of 10,000 people put up 100GB each (1000TB total)
  • You get 1/61 of the coins
  • as with the first case rewards are low anywhere from 1x10^-18 to 1x10^-10 GETs per coin.
  • Because of the huge storage only a few coins per day. Even if 1000 coins per day total then you get 30,000/61 coins for the month = 492 coins for the month

The last example is likely to underestimate the total storage in the first month with the current price of MAID

The more storage space & vaults you give the network the lower the farming rate. Thus oversupplying the network with storage reduces the total coins given thus you actually get less than if you put in a lot less resources. This is what works against centralised farming


#6

You can always do something else like what I did recently and that is sell only a portion to reduce your exposure and sell only what is needed in the future. If it goes well then each time you will sell less coins to get the same amount


#7

Never save dollars because dollars will never save your financial future, keep your Maidsafecoins and you can exchange them for bitcoins to buy your hardware. I don’t know if this is true, but maybe the SAFE Network might also like highspeed internet connections. In that case the wolfs on wallstreet will use their hardware+connection to be howling at the moon.

(notice how the wolfs privacy is being maintained) :stuck_out_tongue:


#8

I am planing to run 2000 vaults all by myself ;), so I think your ballpark expectations are below par.


#9

I’m not so sure - for the long term I’d say almost all in crypto is probably a good idea. As long as any portfolio is diversified & you’re prepared to ride the downs as well as the ups.

Digital scarcity is a new & powerful thing that is only starting to emerge. Give it 10 years and I’d imagine you’d regret not having almost all in crypto at this stage (bar whatever you can’t afford to lose if all goes terribly wrong with crypto for any reason).


#10

Could you explain how to gain like 2000 vaults?


#11

It’s exactly what I am going to do, reduce the exposure to acceptable level and hold as much as I can :wink:


#12

I agree with you. I doubt there will ever be another opportunity like this in my lifetime. As long as there isn’t some crypto-wide black swan that wipes out the lot, then a diverse portfolio of investments that are all high risk doesn’t feel like it has overall high risk to me, particular if some of the investments are competing for the same valuable prize.

That said, I have always sought out high risk, so mine is not an approach I would recommend. It’ll be life-changing, one way or the other. :grimacing::grinning:


#13

My personal opinion: buy coins now and hold them. Watch them crash, watch them rise (and be disciplined enough not to touch them if the price crashes).


#14

Thank you for your opinions, but let me repeat ones more one of my question which as I think wasnt answered yet: “Is it even possible there will be much bigger inflation (not 38M, but 380M) in a first month?


#15

####This is all my semi educated GUESS, but after researching this for a long time I think its worth considering this potential scenario

Barring any bugs/errors NO OR Any Month ever

The network will be too small, too much spare storage.

This means the rewards are given out at a very low rate and on top of that there is not enough people GETting data to trigger such a rate of reward attempts.

The design of the farming rate dynamic system reduces rewards when spare storage is large. Also the design is not to have such a rate, the design wants the production rate (without recycling) to last years not 10 months. Of course coin destruction/recycling counteracts the production, the point is that production rate is for years (10-20 years) and recycling & algorithm allows this to continue forever.

My opinion is that

  • in the first month there will be literally 1000’s of people running vaults, some a lot of them providing so much storage that there will always be a lot of spare storage in the first month (year actually)
  • Some of those people will put many TBs of storage, some using data centre resources
  • Farming rate under these conditions means (according tot he RFC) the farming rate will be approx 1 coin for every 1,000,000,000,000,000,000 GETs. That is 1 million trillion GETs for every coin production attempt of which 10% will fail in the first day due to there being 10% of coins existing.
  • That farming rate means that people globally need to be GETting anywhere from (average) 100 to 500 billion trillion bytes of data per coin reward attempt.
  • So its even possible that there will NO coin rewards for the first month. Well at least until people reduce their vault storage. half a trillion trillion bytes is a lot.

After people moderate their storage supply OR people start upload huge amounts of data the farming rate will become something more reasonable. This may not happen for a number of days and over the first few months will improve. Once the spare storage vs used storage balances out a lot more the farming rate could be 1 reward attempt per 100 million GETs or even as low as 1 million GETs which will be a lot more coins being given out in rewards.

Even if my take on the situation is overstating it, it is very unlikely that the thousands of people running vaults in the first month will generate anywhere near 38 Million coins and quite likely not even 100 thousand. And in the worse case only a handful of coins. But a few million, that is the least likely outcome. 38 Million - no way, 380 million in the first month is not happening.

####Now the above relies heavily on the current RFC algorithm and of course that may change so that the minimum farming rate is capped so its not ever 1 million trillion GETs per coin attempt but say 1 trillion only and that would make the first month see more coins generated but still not see millions in the first month but at least much better than what I expect.


#16

Thank you very much for sophisticated answer :wink:


#17

My Advice:
Buy MaidsafeCoin Now, hold and sell your stock Just right before the 1:1 exchange to SafeCoin, Then buy safecoin back after a few weeks.


#18

You might well be right. I can imagine that the naysayers will be stubborn. Many will claim the only reason testsafecoin hasn’t been attacked is because it has no value, so we don’t yet know that it is robust and secure.

I think you might be spot on and the appearance of testsafecoin will lead to a huge boom that then retraces a lot when live launch is announced and uncertainty and fear rear their heads. I can just see the stubborn, cautious and critical articles flowing in the wake of the SAFE boom that will come with testsafecoin and leads to the SAFEcoin finale.

Even I’m a bit scared by the prospect of test becoming real SAFEcoin and I’m a huge fanboy with great faith in David and the team.

Ringside seats though eh, lucky us. :wink:


#19

What if somebody successfully runs a download script on thousands of computers (some virus) in order to maximize GETs in the safe network? Could this cause hyperinflation right after the launch?


#20

Nope and as discussed to death elsewhere, the network has caching so that attack will result in the attacker downloading tons of data from filled up caches and not by GETs.

So the initial set of GETs will occur but then caching takes over and noone gets rewards. But it is an attack to cause extra bandwidth usage from nearby caches

Then you will ask what if I download from more machines and larger dataset, and again this has been discussed and the effects of caching increases. Every node will cache data so that the data will be as close to the clients requesting it. Again it would take more machines downloading than nodes in the network to overload the caches (oh and importantly request more unique data than can be held across the network in all the caches in all the nodes in the network)