Is farming viable?


This whole thread assumed a mature network with worldwide adoption under which circumstances it’s as likely that the price would “moon” as it is for the USD.

Which, in turn, is closely tied to real world storage prices. Guess what happened when the real estate prices got disengaged from the cost of rent? 2008, anyone?

The definition of “large value” here depends on a magic number, the current price of the coin, without any reference to what people think is a large value when they buy and sell things. This removes any real life applicability and it is not a scalable approach. It’s ugly at best and show stopper at worst.


But if there is worldwide adoption, a single SAFE coin would be worth thousands or even tens of thousands of dollars. That solves your large transactions problem.

That’s exactly my point in what I’m saying. The coin is not dependent on storage space, which you are directly tying it to. They have nothing to do with each other, minus the fact that PUTs can be purchased with coin. The coins in total could be worth far more than the totality of space available on the network. The PUT price is simply dictated by basic supply and demand economics independent of coin price.


We don’t need exact numbers to speculate that more coins is better for small amounts, but will make large amounts more of a burden. The price points this occurs just defines the thresholds.

However, it has already been mentioned that division is the current plan for allowing ever smaller transactions without causing huge issues for large transactions.

Blockchains have the inverse problem; small transactions are costly, but large transactions are relatively cheap. However, it seems entirely more useful to have cheap small transactions and more costly large transactions.


WHY? HOW? REALLY? Those are the questions this thread was supposed to discuss.

In my calculation, under the assuption that the price is tied to the utility (please explain why it doesn’t hold, not just state that it doesn’t) of buying storage, the price of Safecoins can’t go much higher than double digits. I ignore hype and “moon” and such because we’re talking about a mature network with high enough momentum that such things are as unlikely as they are for fiat currencies.

Storage will be added to the network as long as the farming rewards are higher than the cost of storage. (Home users may not care about it but enterprise users will.) I have a hard time imagining how this would not tie the price of the coin to the cost of storage rather tightly.

However, this threshold is arbitrary and it does not reflect real life value.

Unless at least an educated guess can be made that there’s good reason to think this arbitrary threshold will be at a level that the coin is practical for transactions of all size that may happen on the network, we have a problem.

That almost sounds like it’s okay to have a problem if others have some too. I had rather just find a solution.


Not really. Safecoin hasn’t been fully designed yet, let alone implemented. The current plan is to set the denomination high relative to expected market cap, then use division to facilitate smaller denominations. Assuming divided coins can also be used for farming rewards, it seems like a pretty neat design.

By all means, make suggestions on how to improve the design. There is plenty to time to test and improve it. However, criticising an incomplete design, which has no implementation, as if it were final seems unfair. I assume you wish to be constructive?


By any means. I’m striving to find an argument that Safecoin can be more than just a utility coin, that its value does not depend on cost of storage, and that it will be practical to facilitate everyday transactions of arbitrary values.

I don’t have an answer for the first half of the problem. As far as I understand, farming inexorably ties the market cap to the cost of storage as it incentivizes adding storage while the price is higher and goes against it when the price is lower. What is wrong with this argument, if anything?

The more I think about them, the more I like the various denomination ideas. Denominations would be an elegant solution to transacting both large and small values. There is a reason why we have $100 bills as well as pennies, as I think somebody wrote.

Depending on the implementation, denomination support may turn Safecoin into a game changer: the first working cryptocurrency to use coins instead of balances. As you already know, I’m unsure if it was a working coin without it.


Again, the farming of coin is not dependent on putting data but getting data. The PUT price is dictated by Safecoin, Safecoin is not dictated by PUT price/total storage. Safecoin can be worth any value and storage will simply be something you can purchase with it based on its own supply/demand curve relative to Safecoin. If storage capacity suddenly skyrocketed through new innovation, that won’t push Safecoin down, it will just decrease the amount of Safecoin needed to purchase PUTs.


I’d say they are linked but not in lock step. The reward algorithm has no concept of fiat price; it simply knows when storage is in high demand vs supply and adjusts rewards accordingly. How the market reacts to this change is beyond the extent of the network.

The way I look at it, farming provides a steady demand for SAFECoin. Demand may fluctuate, but it remains ever present. IMO, this will work as a dampener to market pricing. Having a source of demand internal to the network, in additional to exchanges etc, will help to subdue large market swings.


Pretty everything is wrong. It does not matter how much safe coin cost in USD. Safe network simply increase farming reward of Safe coins if there is lack of free storage and decrease it if there is too much free space. So network does not have concept of absolute value of Safecoin. If price of Safecoin skytocket 10x overnight, than many people will try to farm it since network is giving it cheaper. As a result network detects there is too much new storage available so it decrease rewards of coins. Since there is lot of free storage and lower farming rate network increase number of PUTs that can be purchased with Safecoin. Equilibrium will happen in a short time and there was not much pressure to drop Safe price. Farmers are farming less coins now. Price of PUTs in USD should be same as before, the number of PUTs per Safecoin should be much higher. Network is not sensitive to absolute price of coin just to dynamics of fast price change. There is nothing in design that can prevent price of SafeCoin to go to USD1000 or even USD100000. The only problem to solve is to find a good way how to divide coins and a way how to let people farm fraction of coin, or at least let them farm PUTs directly. Bitcoin showed us that hundreds of thousands of USD per block rewards can’t prevent regular people to try to farm it. So even that assumption that people should be able to farm fraction of coin is probably over optimization.


It most certainly is relevant to your discussions.

There is no control system in nature or anywhere that can not be disturbed due to mechanics and outside forces. Also the way you describe things seems to indicate you do not take into account how SAFE’s control system works, nor the mechanics of it. Thus how can you describe the effects of it. Your description is one situation that might occur after a couple of decades, and then it might not occur ever and that is when virtually all coins are existing at once.

Without taking into account the mechanisms you have not fully comprehended the ebbs and flows that will occur. Also you seem to approach this from a fiat price and the network has no knowledge of the fiat price and it is not a factor in determining the farming rate nor the PUT cost in safecoin.

No that is not what I was meaning and its a much more powerful thing than farming rate (== 1/farming divisor). It will be the thing that slows down the issuance of safecoin as the existing # of safecoin increases.


Your answer is here

The reason being enterprise cannot compete on a price basis with home users by the 100’s of millions or billion (when mature). Enterprise will not be the major contributor of storage when farming rates are too low for them to make a profit.

Enterprise users may farm if they can earn a profit or they may rent out their systems for greater returns than farming. Its their call but it will not represent the 80/20 rule you think they might. Here scale works against spare resources. As soon as you have to pay specially to farm then you are at a disadvantage to the home user who uses spare resources.

Just gave it to you. Well actually you provided most of it. The storage cost will be extremely low since its spare resources for the most part costing nothing. The fiat price of safecoin is unlikely to be tied to actual storage cost.

What is it worth to you to be able to send mail without your privacy being used to pay for it. Or to post in a forum without your privacy being used to pay for it. At say 1 million or 100 million puts per safecoin how many mailings can you do? When safecoin is 30 cents as it is now, or 300$ or 3000$, well its a small price to pay even at 3000$ per coin isn’t it and it can be done without losing your privacy a little bit at a time.

The price of safecoin will not be in the actual price of storage, which for SAFE will be near zero due to spare resources being used, but it will be in the security, persistent storage, anonymity (the big 3) of the storage. And convenience of secure communications without doing anything special. These are the sort of things that will drive the fiat price higher, not near zero storage costs.


You are assuming everyone will want to farm when in reality it is unlikely many people will care about it. I for one will not participate, just not something I care about, but I’m really untested on the benefits of the technology. A lot of people will not farm or host data. In the even 4 billion causes rarity, the price will just adjust and there is always dividing the currency. All will be well :grinning:


What is wrong is that it’s missing important parts of the safecoin picture.

My first theory is the market cap is inexorably tied to the cost of a GET. This is because new coins are only issued by performing GETs. So the coin price is determined by GET cost.

My second theory is the market cap is inexorably tied to the cost of a PUT. This is derived indirectly from the farm rate, which is derived from the amount of spare storage available on the network, which is derived from the cost of supplying storage. So the coin price is determined by the cost of supplying spare storage (as you suggest).

My third theory is the market cap is inexorably tied to additional values of the network token, whether that be instant irreversible global transactions, a form of tax haven, protection from inflation, the ability to trade goods other than data storage, increased financial privacy, etc. This is subjective and may be valued by participants more than the underlying fundamental utility of the network.

My fourth theory is the market cap is inexorably tied to the total coins issued because the difficulty of being rewarded an unissued coin is proportional to how many are currently issued. So the coin price is determined by the total coins currently in supply.

However none of these theories alone captures the full picture of market cap. You suggest that only the cost of storage matters to market cap, but I think it’s more complicated than that.

Bitcoin mining is ‘fundamentally’ limited by energy costs but the market cap of bitcoin often goes far above that baseline. Same thing will apply here, but I think in even more complicated ways than bitcoin mining.

I realise this doesn’t help answer the original question ‘is farming viable’ nor does it suggest any ways to improve the existing safecoin economics (which I think need a lot of improvement). I’d be keen to hear your ideas for how the current proposal might be improved. The denominations idea is ok in many ways but I think it doesn’t add enough decimal places to really contribute to solving global or micro payments.

There may be a reasonable idea that the maximum ‘wiggle room’ to allow the network to address imbalance of resources is when 50% of all coins are issued. At that point there is the most room for adding or removing coins from circulation. The network may aim to stabilise around that 50% point and adjust supply and demand based on how far users deviate from that optimum capacity based on their destruction or creation of coins.


Additionally I think it will require a lot of work to design something where we can actually answer the OP question with full confidence. Like PARSEC amount of work. That was 2 years of thinking. I hope they have been doing the same kind of stealth work on safecoin.

One reason for this is precisely the complexity you mention. It is very hard to model, conceptualise, reason about, and therefore to know how it should work and prove that it does.
It’s no small task for sure.


What about the ppl using cloud storage/SAFENetwork to store data instead of local storage. Just take a look at the chrome books, they are designed to use the google cloud for storage. Also it’s not “free storage”, you have to pay for that bigger hard drive, so it would result in PCs having less local storage just to shave off a few pennies from the price.


It would end up too slow, the delays to get the chunks from the cloud back to the computer at home then upto the safe network. Unlikely to get many rewards.

When i mention spare resources for a home user it is assumed to be local resources at home.


Thanks for all the responses. I hope I’m really wrong and the market cap can go higher than the total storage cost. Maybe if the coin is useful for commerce then much of it could get tied up in that and only the rest of the coins would cover for the storage cost.


We have plenty of crypto currencies, but no autonomous data networks as yet. IMO, safecoin will be important, but it is only one piece of the SAFENetwork puzzle.


I’ve always reasoned maid market cap (loose term) via Bitcoin.
Bitcoin has very little “utility”. It’s speculation, store of value, some privacy, little bit of utility. It is however a “better money”. It can’t be counterfeit, it can be sent anywhere without permission. It’s “base” is roughly the electricity cost to mine it.

Safe has all of that, and a load of improvements to boot. As I see it, your $12.25 does have a meaning, it would be a base. Commerce, micropayments, speed of use, speculation will all boost it above that point.

Again using BTC as a reference:
BTC price 7000.
200x more maid than BTC (if all were farmed at once)
7000/200 = $35 just based in being “as good” as Bitcoin.


I don’t think it will make sense not to farm. Easy setup, and anything you put on the network will cost ‘put’ space. If you farm, even on a smaller device, those puts can be paid for by your farming instead of having to buy coin