Forbes Article - Some discussions on MAIDSAFE ICO


I don’t see the SAFE network being a threat to BTC at all. They are completely different technologies with different purposes. The only reason people would think it is a threat is if there is a belief that there is a max market cap that all digital currency can achieve, which is silly.

If anything, the SAFE network could give a legitimacy to a market which is struggling to find some. It can also create a platform to have better protected exchanges and wallets. It’s really a win for the rest of the digital currency market.


If Safecoin becomes a better currency than Bitcoin, isn’t it likely to take some users away from Bitcoin?

Why would anyone use Bitcoin if Safecoin were faster, cheaper, more anonymous, backed by useful resources, easy to use, used & accepted by many more people, and offered optional ledger features?

If Safecoin achieved this, it’d greatly limit the reach of Bitcoin, as nobody would have any good reason to use Bitcoin over Safecoin… so in my view it’s absolutely competing.

Anything that can be used as a currency is in competition with anything else that can be used as a currency.


You both make some good points. It will be interesting to see how it plays out.

I think I agree with David. I won’t be settling any profit from SAFEcoin back into BTC post-launch. There is a reasonable chance BTC could begin a long and slow death-spiral if the tech isn’t competitive any more… mining, fees, scaling, speed, centralisation etc, let’s face it, BTC is far from ‘ideal’.


From earlier today


In my opinion, the way Safecoin is to be farmed combined with how it is used for services inside SAFE, and the destruction of coins makes it unrealistic for it to be a main currency in a digital currency market. It has a specific purpose for which it is created, and that is not to be a true “digital currency”, but a way to pay people for their services inside this specific network that it operates in. That’s not to say it can’t be successful, or worth a lot of money. That also isn’t to say BTC will ultimately win out as the “primary” digital currency. BTC has its own problems irrespective of whether or not Safecoin displaces it.

The SAFE network, though, is a premier place for an exchange and wallets to live, and fueling the growth of BTC and other alt-currency inside the market does not hurt Safecoin, but help it.


I am not sure why coin recycling has a bearing on safecoin success. Care to elaborate?


Safecoin needs to be a true digital currency, or it can’t be used to incentivise farmers.

Even if it weren’t primarily designed to be a currency, wouldn’t people would use it as one if it was the best thing for the job?


Seems he wants more info (tweet after your post here) and talk with some one.

Dunno if its wise or not


Its one of the major benefits. It keeps the total issued coin down, which typically helps to keep value up.

Also means that farmers will be paid more often since the coin is never fully issued.


Neither commodity backed currencies nor fiat currencies destroy their wealth and recycle. The economic repercussions of having a currency that does that is unproven, and at the very least, discourages growth and investment using such a currency.

I didn’t mean Safecoin wouldn’t be a currency in the way that you couldn’t trade it for fiat currency or an alternative digital currency. I meant that it was not designed to be a primary currency for all trade. It was (or will be I should say) designed to work within its SAFE network as a way to incentivize resource sharing. As one would need Safecoin to operate within the SAFE network for many things, it is safe to say that the more traffic the network has, the more Safecoin will be worth, regardless of whether or not it is the main trade currency.

As stated above, the economic implications of having a commodity backed currency that also recycles itself is unknown. Removing wealth from a system is not something that has been tried in the past, as wealth is normally reintroduced into an economy as investment or spending in an ever continuing loop, and additional currency is introduced over time to encourage growth. We know that there is a limit to how many Safecoin can be produced, and also have been told that we will never reach that point due to the recycling nature of the coin.

This introduces a new wrinkle into a commodity backed system that normally introduces wealth by natural deflation of the currency against the commodity or purposeful infusion of more currency to inflate it. Meaning, if 1 ounce of gold = 1 Safecoin, in a normal commodity backed system, wealth is grown by assuming that same 1 ounce of gold is now worth .5 Safecoin, thus people have more spending power with the same Safecoin. Alternatively, one can increase wealth by introducing more Safecoin, thus 1 oz of gold is now worth 1.5 Safecoins (More of a fiat currency method, but is also reliable with commodity backed currencies under a central control). In a digital currency world, as we see with BTC, currency much more closely follows the former of the two methods. That all goes out the window, though when that currency can now be destroyed. I simply don’t think we are equipped right now to handle that type of adjustment to our economic modeling. I think it will be necessary to have either an ever slowly expanding currency, or one that naturally deflates, much like BTC.


Interesting thoughts… I hadn’t thought that Safecoin will have dynamics that different to Bitcoin given the limited total supply & decreasing release rate.

The only significant difference is that the network will to some degree control the supply via adjusting farming rates / rewards with the goal of balancing supply & demand of network resources (incentivising resource provision when needed, and reducing rewards when excess capacity exists).

However, Safecoin its self is never ‘destroyed’ - its only allocated to the Safe network ‘DAO’ if a user decides to pay for the network’s services. The network then allocates it as it sees fit.

Wealth is no more removed from the system as it is when someone spends money on goods from a company who then decided when to release that wealth again to suppliers / shareholders / governments etc.

If Safecoin became widely used and only 2% of Safecoin usage was for network resources, the network would have very little control over ‘monetary policy’.

Interesting dynamics to think about. It’ll be great to see what discussions arise when the algorithms are being debated / designed for test Safecoin.


Most money is credit based and does indeed get destroyed when the debt is extinguished.


So Safecoin will be like water,right , going round and coming back to filters to be recycled and then back again to the system…?


That seems like a good analogy to me. There will be times what the filter is finer or coarser too, to keep the flow steady and proportionate to demand.


Yes - this is right for Safecoin that is spent on Safe network resources.

Safecoin used for any other purpose will be excluded from the ‘water cycle’, and this could become a large portion of Safecoin in time.


Thanks - I did not know this!!


You conflated the recycling with destroying wealth.

SAFEcoin is used to buy resources and not simply destroyed at a whim.

It would be more akin to a single Store where one buys resources from and where one sells resources to. This store initially has 2^32 coins less 15% and issues a coin when a successful GET meets certain conditions.

The actual mechanism of this is not to keep the coin data objects while they are in the Store but rather delete the coin data object and recreate it when a coin is issued.

So the wealth is not being destroyed. But rather the wealth is used to buy the most valuable resource of the network.

The actual mechanics is that on day 1 there is 10% 0f 2^32 coins issued and there is 5% of 2^32 reserved. The rest are not yet existing.

Each coin is a data object with a specific address, so in fact all coins are special because they all have a unique address.

So in essence you could say the store has a large drawer of numbered coin slots

  • 15% are empty because they were issued/reserved already.
  • When a coin issuance attempt is made the Store works out an address (coin number) according to a few parameters and if the numbered coin is in the slot then the supplier is given the coin. If the slot was empty then no coin can be given
  • When someone buys resources (stores/uploads data) the coin supplied is placed in the drawer in its numbered position according to the coin address

And translating that analogy to SAFE the coin slots in the drawer are the data object addresses. If a “coin is in the slot” then the data object does not exist. Coin paid is thus destroyed and coin issued is created. The reason for destroying the data object (coin) is to simplify the test for if the coin has been issued or not when the coin issuance attempt is made. It is not the same as destroying wealth.


This is what sponsored media does. Its all paid misrepresentation that amonts to censorship. It turns political representatives into paid bribe takers that sell out the public in a law as highest bidder married to greatest self avantage affair. More problematic sponsored media rations misprepresentation to enable strategic lies to seem more credible.


Thanks, @neo. I’m not entirely sure I agree with your premise that recycling isn’t destroying wealth, but I don’t think it will have much a negative impact on the future either way.


Why, or how would buying network resources (or anything else) destroy wealth?

The network could in theory reduce the circulating quantity of Safecoin by accepting payments in Safecoin & reducing farming rewards, but that wouldn’t destroy wealth either - it’d increase the wealth of Safecoin holders by deflating the money supply.