Farming vs Mining, utility vs speculation?

Ok, so this is just a few thoughts I’ve been mulling over with some questions to see if I’ve gone way off course.

We know that mining increases the value of crypto networks indirectly. Mining provides security and that creates some of the value in the mined coins. However, miners respond to market prices. They switch coins depending on what the market wants, so it can’t be said that they have a direct causal effect on the price. Instead, it seems that miners respond to demand (speculation and utility) rather than creating it.

Monetising spare resources seems to create a different paradigm to mining (possibly unique?). New farmers add real and direct value to the network. If more come on board to compete for the SAFEcoins then the utility demand ought to go up as the cost of using the network falls - if users are aware of it, trust it and the market is rational.

Is this just a standard economy-of-scale paradigm, or does the utility demand for SAFEcoin turn it into more of a positive feedback spiral, creating and sustaining its own inertia with a direct causal relationship between farming levels and price?

I’ve heard it said that the killer App for bitcoin has ended up being speculation and Alt coins. I think that’s largely true. We see very little utility in crypto, but we see huge amounts of speculation and hopeful ‘hodling’. Subsequently we see crazy volatility. Speculators see a chance for profit, then they take that profit and so it yo-yo’s around with people’s optimism and pessimism about the short-term direction. With very little utility demand there is a very low volume base level for the swings to drop back down to when the traders lose enthusiasm and exit their positions. The only thing more important than volume and market cap for price stability is utility, if you crack that nut price can maintain an upward trajectory.

Bitcoin has taken a very long time to build up a utility base and it is still very volatile because most are not holding their coins for utility. I don’t believe BTC will be nearly as useful as a functioning SAFEcoin. There are a lot more reasons to need your SAFEcoins than BTC, and for things you want to do on SAFE network you will HAVE to use your SAFEcoins. I don’t know about you, but I don’t really shop with BTC because I’d rather hold it and it costs me bank charges to buy it. I hold it because it goes up in value and I shop with my fiat because I want to spend the shit that’s going down in value. SAFEcoin is a totally different proposition isn’t it? If you HAVE to use it to do the things you want to do online (if you want to be ‘free’ and not monitored, censored or restricted and regulated, or just store data more securely or cheaply), then surely the majority of the demand will be utility? Most average home-user farmers should end up using their coins rather than selling them shouldn’t they? It is a hassle to go through the wheels of crypto to sell a few quids worth of coins. Most likely a lot of the exchange demand will come from small buyers in places like the US where they don’t get unlimited broadband in many places and therefore might be less inclined to farm.

So yeah, basically, how closely do you think price and farming rates will correlate and why? How do you see the utility/speculation ‘pie chart’ developing? Could there be so much speculation that even a big utility base is dwarfed by millions of hopeful holders and we’ll might still have huge volatility for a long time post-launch?


I agree with the thrust of your logic but I’m not convinced that it is definitive. It would be good though, and I think there is another factor that pushes solidly in this direction, which is the fact that users will I hope in large part also be farmers. If that happens, and it is a key goal, then that changes the situation very clearly from one where there are different groups with markedly different behaviours, to one where if users were significant or dominant, those other groups would have less impact.

Most users who farm will be farming small amounts and not be very sensitive to price changes. And, because they are providing already paid for spare resources, they will be happy with lower farming rewards than those who are trying to fund a business and will opt for the best return on their capital.

How much impact this has will depend on how many ordinary users farm, and what overall percentage of resources come from them compared to more dedicated and professional farmers.

As to how this might affect things it is hard to say, but I hope it leads to greater stability. There is reason to think it might, but also to think that because SAFEnetwork is so different compared to alt coins or other crypto projects, that when people catch onto this it could see exceptional growth and speculation even compared to bitcoin. So maybe greater stability and gradual growth, but with the possibility of dramatic investment and speculation if there’s a sudden spike of interest at each new phase of recognition (such as by wider cypto community, within tech investors, tech companies wanting solutions, mainstream etc).


There are a couple of other things to consider, I think:

It will only be guesstimatible how many safecoin are in existence at any time, so even computing market cap will be a rough guess (though polling several sectors for density should yield a decent guess).

The utility of safecoin is likely to be very appealing. It is, by its nature, thoroughly anonymous. That’s going to be overwhelmingly important as fiat/flag currencies unravel. Think India, just now, or Venezuela or Argentina or Brazil, or anywhere else where capital controls, hyperinflation and corruption are happening so nastily. Imagine what it will be as that spreads. And it will. Think Greece and Cypress.

Granularity of farming is also huge. Anyone with a moderate computer, or even a plugged-in smartphone, and a reasonable internet connection will be farming and contributing to the resiliency of the network. So even if cash is pulled out of circulation in a big way, as in India, safecoin will develop a local price proportional to demand for commerce. The point being that it will be easier to get some of it even if that bit is small compared to what industrial farmers will get.

Bitcoin is “hard” to get, relatively, and people in Venezuela are risking life in prison or worse to smuggle in miners, and make and use bitcoin, not to mention paying a 30+% premium to buy it.

If safecoin lives up to expected utility, and the SAFE Network delivers a decent portion of what it seems it will, a whole lot of stuff will happen that is impossible to predict, but it should be very interesting.

Oh, don’t forget that transacting in bitcoin and most other crypto over the SAFE Network:

  • send private keys to loved-ones or trusted associates, avoiding ANY transaction fees.

  • share public keys over the network so recipient is unknown on any other channel.

  • decentralized, anonymous exchanges of various types.

  • etc.

SAFE Network and safecoin aren’t in competition with other cryptos in the least. Nor are any of the other cryptos in competition with each other, and I wish people in various projects would realize this. Different features, different draws, but all are trying to accomplish basically the same thing: putting control of money into the hands of the users.


Not really, no; it’ll be quite easy to estimate the number of Safecoins to a sufficient and known level of probability, at least as soon as there will be “plenty” of them out there (because then you need fewer samples for the same level of certainty.) I’m lazy to look up my more tangible answer from another thread, but it’s pretty basic statistics. No, wait, here it is.

I’m not sure I get how that would happen. The resources to farm a certain probabilistic amount of coins are going to be the same anywhere; how will that translate to local demand? I’m curious because one of my problems with cryptocurrencies is exactly that they are “too global,” so they can’t accommodate variations in local economies.

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You’re giving me a headache :joy_cat: This problem has too many dimensions and numerous feedback loops, rendering it utterly intractable. So many cool words stuffed into a single sentence. :scream_cat: I should be proud. :smirk_cat: Instead, I scatter this post with cat emojis. :smiley_cat:


Good answers, ty :slight_smile:

Sorry dude, my bad. It’s probably because this started off as an epic essay and I kept cutting it down. It has lost a lot in the butchery. Even I find it hard to follow now I’ve taken out most of the explanations and examples.

You’re probably right, this would be better done as an article after the fact. There’s so many unknowns at this point it’s a lot of work to draw conclusions that will probably end up being way off :stuck_out_tongue_winking_eye:

I do think it will be very interesting to watch though. It does seem like a fairly unique and complex situation, which makes it quite fascinating to me. I’d imagine most of the more heavily invested people have tried to plan where to sell what, when and why. It’s frustrating being so in love with an idea because it makes it very difficult to do lol. The upsides are always just so compelling. :grin:


When cash has been stripped from use in an area, or there is otherwise a scarcity of ways to transact, any units that can be used to transact will gain an additional value in that sphere. In that case, how many PUTs a safecoin will buy will be overshadowed by how much bread it will buy. Look at India right now with 80+% of it’s cash (1000 and 500 rupee notes/ with $14 and $7 respectively) being suddenly declared “no longer legal tender, you have to exchange it for smaller bills that aren’t available as yet.” “Screw how many PUTs that will buy; I need goat milk now or my baby will die!”

Current, real world example is Venezuela where bitcoin is worth over a thousand where here it’s less than $800.

As always, Antonopolis does a great, relevant talk here.


I’m convinced long term planning is worse than useless in the presence of this much uncertainty. Plans want to be followed, and there’s nothing worse than going straight “because I said so” even after it’s clear there’s a wall in front of you; having no plan is better than that. But this is just what you already said: it’s hard to divorce an idea you fell in love with.

By the way, this level of uncertainty is why I think trading beats long term investing. Long term implies few trades, which means one needs a decent edge (or, a lot of luck) to succeed with high probability. If, however, you place thousands of trades, then even a small edge will work (if you tread carefully; i.e. judicious position sizing and exits.)

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Well one thing that seems pretty certain to me is that there will be a crazy amount of space right from the beginning. Storj has barely even started and they already drown in space from what I see.


Surplus space today is, IMHO, due to very little mainstream adoption. Once people (and companies) start using the distributed storage even for backups, the space will be consumed at incredible rates. Watch for Storj needing to recruit farmers at a lightening pace as they come out of a positive proof of concept test with Comcast.

These technologies (Maidsafe, Storj, etc.) have potential to eliminate need for data-centers. We are talking about disrupting a market value of many billions of $ (equipment, cooling, electricity, bandwidth) by distributing it to farmers – but only if easy to use APIs can plug into the existing business, cloud services, and backup application technologies that consumers and businesses are utilizing today. Otherwise, the sheer cost of switching technologies is prohibitive, despite the possible gain.

My barrier to entry is 1) show me a functioning product that is going to be supported so I can be assured it’ll still be here in 10 years, 2) show me a vibrant community of developers building APIs into StorageCraft, Veeam, AppAssure, Symantec, Continuum, Hadoop framework applications, etc. etc. for mass business use [just fulfilling the backup use case is sufficient for now] so I can choose Maidsafe as a backup target instead of my SANs / NAS / JBODs], 3) show me a commitment to paying farmers well and continually encouraging more to join.

The more this technology redistributes that “utilization value” to individual’s devices, globally, the more the promise of a truly uncontrolled, distributed, EMP-proof, gov’t restrictions-proof, DDoS-proof infrastructure becomes a reality.

I don’t see this as an “investment” opportunity (capitalize on other people’s work) but as a “cash-flow” opportunity. And in my business experience - cash-flow models drive more real returns that are tangible and convertible than the wildest facebook-like unicorn with their vapor valuations. Bitcoin is the stock market; a currency exchange. Safe / Storj can be the roads, electric grid, and water systems that everyone depends on, mutually, going forward. It actually is a digitization of barter and free market economy!