Effect of high SAFEcoin price on casual farming


#1

Let’s say that SAFECoin price goes up to $2.00 or even $20.00.

When somebody runs a vault, every time there is a successful GET from their vault, a number between 1 and 4,294,967,295 is randomly picked, and if that corresponding SAFECoin is available, then that vault wins that SAFECoin. That’s a $2.00 value, let’s say, in this thought experiment.

As more and more people start to farm, because they are excited about the $2.00 SAFECoin, the available storage in the network increases, which makes it less likely that anybody will do a GET from your vault. Now your chances to win a SAFECoin decrease, and you might wait a long time before you win one.

When you do finally win a SAFECoin, you are very happy, because now, with all the available storage on the network, because of all the extra farmers, the network has adjusted the PUT price down quite low, so the SAFECoin that you just won, will allow you to put a lot of data onto the network.

But how long did you wait for that SAFECoin? I can’t wait to feed a dog for a year, and then feed him a years worth of food all at once. He’s dead by then.

We want casual users to be farmers, and use their farm income to do PUTS onto the network. But if that new user has to wait a week or a month for his first SAFECoin, even if that SAFECoin would allow him a plethora of PUTS when it finally happens, the act of making him wait so long is not a good experience for him.

The idea of handling SAFECoin divisibility by allowing people to do multiple PUTS per SAFECoin fails in that it still demands a possibly very long waiting period before that first SAFECoin is won.

I don’t know what the answer is. I’m just throwing this out there for those smarter than myself to ponder it.


#2

You can do this thought experiment another way.

If the network does it’s adjustment job correctly, then storage fees will be pretty cheap in human terms. Something on the order of dropbox rates. Perhaps some multiple of dropbox rates, since we are secure and we are forever. But of that order of magnitude.

Since as a farmer, I am selling storage, than what I earn in fiat terms will be in the ballpark of what I could rent my harddrive for as a dropbox clone. There is some reasonable $/MB per month that my rewards will converge to, as the network adjusts.

Now, if SAFECoin price goes very high, then we know that the physics of the system will be such that I win those high value SAFECoin less often. That’s OK, in the long term, I still make the same value per month that I would have at a lower SAFECoin price.

But if I am a new user, and I have to wait that much longer time to get my first reward, I am unhappy, because I can’t do PUTS until I finally win, and the length of time I will need to wait, to win a SAFECoin, must logically be longer for high priced SAFECoins.


#3

You didn’t follow through with your reasoning here. Those that farm purely for the “money” will drop away because they give up as a bad dream of riches. So there is a balancing out because of this.

In my proposal for divisibility I did suggest paying for resources using divided coin (up to 1/10^18) and receiving payment for each GET if the “lottery” was won for the group you are farming for.


#4

There was a consideration mentioned by David @dirvine for new accounts to have a small PUT balance while the network is small(ish) and later on we could even see community gifting of a coin or some sort of loaning of a coin to open new accounts.

Then there was the suggestion that to open an account one needs to spend a coin (or farm a coin that is used up) and that buys the account MDs and the first lot of PUT balance and the community/people may help new users with their first coin by gifting/lending


#5

Interesting post

I think this suggests that there should be enough safecoin to keep the farming rewards as ‘a little and often’.

I have always suggested that simulations are run with tiny safecoin denomination. I wonder whether the overhead of moving lots of safecoin around is really high enough to warrant such big safecoin. Especially so when you need another layer to split them up into PUT tokens.


#6

@Tom_Carlson your conclusion, as Safecoin value rises the chance my 1TB vault will win a Safecoin reduces (if I may rephrase it) misses two things you didn’t mention:

  • over time my vault fills up (and I may add storage when it’s full to keep this growing). This process increases my chances of earning coin.

  • just as more people add storage (reducing your chance of earning a Safecoin) more people are accessing the data, which increases the number of GETS and the chances of earning a Safecoin.

Both these factors are part of the supply/demand equation that determines the rewards obtained by farmers, but I don’t think you included them in your thinking in the OP.


#7

Don’t think so. If increase the GETs must decrease the chances of this GETs to win a safecoin because if not, we broke the balance between the safecoin destroyed by PUTs and created by farming.

If the number of farmers increases greatly the only solution, to easily win in farming, is to reduce the reward.

Maybe it’s time to rethink the safecoin division or some solution as proposed by @neo.


#9

Let’s say I’m a new user. I create an account, I donate resources to the network, and I’m waiting for my first Safecoin. I receive my first safe email from a friend and I want to reply but I have no Safecoin to do so. What are my options. Figure out the process to convert my fiat money into Safecoin or get some one to give me Safecoin. Both options will hinder network adoption.


#10

There’s always the option to just buy a safecoin/part of a safecoin or the corresponding puts. Also there will be pools aswell. Personally I’m not too worried about it. but it’s good to think about it nonetheless.


#11

First off you might not be able to have a permanent account to receive that mail. So its even more basic than that.

To make an account permanent you need to be storing your account information on the network. This requires PUTs.

This has been discussed elsewhere some time ago. Search “bootstraping” might find the discussion.

Basically its up in the air and will depend on how SAFEcoin is implemented and how account creation is done. There is a possibility that new accounts will be given enough PUT balance to create the account and mail and wallet MDs Just not enough to game the system by creating multiple accounts to upload files for free.


#12

Do we need an exchange at the start so that the network knows the trading value and how many puts per SAFEcoin.
If not how are puts per coin determined?

And what if we imagine a $10 SAFEcoin, I want to buy $5 worth of puts it’s all I can afford.
I can’t buy half a coin so I can’t buy puts?


#13

Well, that just makes the situation worse.


#14

Worse still, imagine how much resource must be provided to earn $10 of safecoin… It would be substantial, imo.

So far, most thought has been put in to splitting coins to spend in small amounts, but the problem is just as important at the other end - earning small amounts for helping the network proportionally.

If we are going to need to split/combine at both ends, it does raise the question over whether the denominations should be much smaller from the outset. Rewarding a few pennies for an hour of hosting is much more preferable than earning $10 for a month’s hosting.


#15

I don’t think there will be any shortage of data being uploaded to drive up the price of safecoin. Also remember that while it will become harder to mine safecoin with more farmers devoting reources the price of PUTs will also drop. So you might only get safecoin once a week but you might only spend 0.00001 safecoin to upload a TB of information or something. A value of a currency is determined by what you can spend it on. And if I only get paid once a week or once a month but that can last me until next week or next month that’s not an issue. So it all depends on how many PUTs that lottery win is worth and how often one can win the lottery.


#16

Well why not have safecoin measured out according to the PUT. So you earn by the PUTs. 1 PUT = 1 MB which is a pretty standard measure. From there it’s not that difficult to calculate a dollar amount.


#17

I am not sure I follow. The issue I am trying to reinforce is that the minimum reward for hosting may be too high, due to the smallest denomination of payment being worth too much.

In short, if the smallest farming reward is 1 safecoin, you need to provide one safecoin’s worth of value to the network. If 1 safecoin becomes expensive, a lot of value will need to be provided before any reward can be paid. This is a problem, imo.


#18

Maybe the easiest thing is to change the conversion rate from MAID to SAFE so there are way more SAFE coins? If the ratio changes the same for everybody it wouldn’t really matter that it is 1:1. But I guess it is constrained by the number of coins that the network is designed to accommodate (2^32 I think it was). Was that a technical limitation?


#19

Maidsafecoins are cheap now on the exchanges (17 cents as I write this). It’s not a bad idea to buy 10 or 20 or more to have a stronger start and more options. Poloniex.com is a good exchange selling Maidsafecoins


#20

A lot of thought has gone into alternatives to divisibility, I hope more thought toward actual divisible safecoin from the start is high on Maidsafe’s Safecoin implementation agenda when the time comes.
Anything less will be a disappointment.


#21

The technical limitation is just network overhead to move lots of small chunks about. However, they need to be small enough to allow the network fund farmers easily or it would be counter productive.

I think we need to know how much load is caused by payments though. There are only ever going to be small groups of nodes completing the transactions, so it may not be so bad. Perhaps bundling the transactions together some how could improve efficiency too.