I wonder with cryptocurrency projects in general, do economists and finance business types serve on advisery boards as consultants? I think the input from such professionals would be really useful in helping cryptocurrencies be more viable and address challenges and solutions from their professional perspectives.
SAFEcoin is likely a really complicated economy… Particularly if you tack the “content creator rewards” on to the scheme…
Expert advice would be wise, but I kinda doubt expert advice exists.
RippleLabs seems to have a lot of big establishment brains on staff – but that alienates themselves from the larger crypto community and tends to steer that project back to being ‘enabling’ of the status quo vs ‘disrupting’…
I would prefer the “keep it simple” approach, and have it centered around reimbursing hosting costs – but that will not be popular with a lot of people. Having it try to be too many things to too many people is going to cause it to interfere with itself in value.
Thanks for the reply. My concern is for Safecoin to have real world value to incentivize development of the network ecosystem. For instance, look at the Safecoin crowdsale. Real money is making it possible to fund the MaidSafe project. App Developers need real money to support their efforts to build apps on top of the network. Disruptive technology is super cool in that I think it fosters innovation and creativity. I just think Safecoin needs an economy to really thrive, and economist types may have ideas how to help with this.
Yes, it seems to me that a lot of people plan to make money by farming – If the system works correctly that is a relatively bad idea — Farming ought to always economically wind up being a break even enterprise at best - especially since most computers have excess space, bandwidth that CPU time…
The reward is the network, and if other P2P projects are the guide, people participate without much bribe.
The network ought not overpay – that just isn’t sound economics and it is begging to be gamed – But if you add all sorts of different things that rewards are paid for, it will be really hard to manage.
I concur, but if you keep your farmed SafeCoins they may appreciate a lot over time. I can’t remember who it was, but one of our forum members told how everyone told him to stop mining bitcoins when breaking even with a market price of $4.
So the best strategy for maximizing profit is probably farming with the resources you have anyway while buying SafeCoins with the fiat currency you can spare, and keeping them until you think they hit peak value.
For a professional dose of keynesianism?
I, personally, don’t think that’s how it’s going to work out in the long run. I don’t think farming will be super profitable, but I think that it will always generate safecoins which are more valuable than the resource contributed, perhaps by a notable margin. That is, for people who are using resources they would already be using otherwise, at least. Going out and buying hardware specifically for it may not me so profitable, especially if handled as a commercial enterprise, with space purchase or rental, extra bandwidth infrastructure, utilities, etc.
Seneca’s point is well taken, too. When other services are introduced, like distributed computing, I think safecoin will come into greater demand and start to really escalate in price. Also, as individual find they have extra, they will start spending them directly amongst themselves and for other small purchases, causing an increase in demand and thus value. But the whole cycle is buffered because of the way safecoins come into being and are distributed. No easy large-scale manipulations or fluctuations are likely, because the issuance is so decentralized.
Just some thoughts.
I’ve read this statement a few times from you but I’ve no idea on what this is based actually
I’m not saying it will be (super) profitable or not but 100 coins you’re buying right now for 2 might be sold for 50 next year, or even $1 if things aren’t working out as we’d like to see. What I’m trying to say is that the profitability eventually should come out of the fiat value (which we can’t predict).
that could have to do with: Safecoin network value will expand. So when you put 1GB and got 1 Safecoin back then on a network of 1000 Safecoins and 1000 GB your computer got 1, if in 1 year the Safecoin on the network is still 1000 and the capacity is 10,000 GB then your 1GB got you 10GB in the future. So the intrinsic value of the Safecoin went up. So if you start at 0GB, and it’s worth $0.02 today eventually the the 0GB will become many millions of GB and therefore the price could expand with demand.
My response was initiated by @jreighley’s point that farming ought to be a break-even activity. My point being that going into it as a professional activity probably wouldn’t be like bitcoin mining, but I think we’ll see a lot of added value to the safecoins, above what is need to supply the resource and use the network for individuals and “small farmers” running some extra raspberry pi’s, etc., at home.
Over time, of course safecoins will likely appreciate in value, both in terms of network resources (as @dallyshalla points out) and in the broader market, because of its characteristics as a currency. In that view it WILL probably be fairly profitable.
I don’t know that this is too much different than the cost of Hard drives and bandwidth dropping by moore’s law though…
In order for the price of SAFEcoin to skyrocket it will need to be used for other kinds of transactions other then farming. Then limited supply and increased demand will boost it substantially…
The farming rewards are designed to give early adopters a reward. People here who are intent on farming are all going to be early adopters and so are in a good position, just as with bitcoin and other similar projects. The effect will be very dependent on how adoption proceeds from the user side.
Don’t expect huge profits and you won’t be disappointed, and you’ll be able to enjoy being part of an exciting and perhaps world changing project, with a great story to tell your grandchildren (if they’ll listen to a boring old geek ).
Next to no-one expected bitcoin to reach even the valuations it has today, which is why so many sold early or threw away computers with bitcoin keys on them. I personally gave up trying to mine ($1), buy at $5 and $19 (too hard) and when it reached $50 I thought no way, and sat by and watched it bounce up to $200 or so and then back down to $70… Oh dear!
Well, with Safecoin I’ve booked my ticket early and am going to farm too. What have you to lose?
I thought one member of the core staff at least finished the training as an economist, but maybe always worked as a programmer.
In regards to the economic model, I think the more ways Safecoin is valued the better.
Right now we have Farmers and Builders as stake holders with a vested interest. My hope is that the Safe Network can be used for making services such as BaSS (Backend as a Service) and SaSS (Software as a Service), which will attract mobile app developers and users willing to pay for these services and become stake holders themselves.
If the Safe Network could be used as a backend for mobile apps, that would really increase the value of the network.
If MaidSafe or third-party developers could increase the financial utility of Safecoins, such as smart contracts, this would also increase Safecoins value.
Distributed computing would also add value to the network.
One concern I have is how restrictive the security will make the network in regards to its utility.
I’m curious from an economist perspective what suggestions he/she would make in regards to the value of Safecoin.
What other ways do you guys see as adding value to the Safe Network and Safecoin?
I’m usually not really impressed by Economy degrees… Sure, there are smart economists out there who do a lot of research that is useful. There are also tons of economists who really talk, if you excuse my language, a load of bullshit.
Not long ago I saw one on (Dutch) national television stating that companies having hard times is good for the economy and progress because then they’re forced to innovate. I didn’t know whether to laugh or to cry. Companies innovate best when they have 1) competition, 2) the right organisational culture, and 3) (very important!) plenty of resource to spare to invest in R&D. If a company can barely survive it’ll go for short term cost reductions (like firing employees or reducing the quality of their products), it’s less likely to invest in expensive R&D that may not pay off and thus finish off the company.
Economics is going to change drastically as we move from a debt based system (Fiat from the central banks) to a Scarce asset model (Limited amount of cryptocurrency to trade)
I am not sure the models from the old system will translate to the new system quit handily…
I really hope this will indeed happen.
@Seneca The economists I’ve met face to face left a deep impression on me, but I can’t stand what has been their main model for the last 45 years. Their actual training if its done right does include developing a powerful skill set that combines numeracy with good exposure to the core of so many other disciplines. But I am afraid they’ve been in the excuse making business for the last 45 years.
It’d be great to have Ben Bernanke’s advice.