There is no inflation. It’s a percentage of node farmer/operator earnings.
There will be no inflation when all the tokens are printed.
To get from 450 million tokens to 4,500 million, there will be a lot, a lot, a lot of inflation over the years…
The 2^32 supply is fixed. On day one the network owns all of them. Then it transfers iirc ~15% of total supply as the genesis tokens which have been earmarked. From then on it pays for resources as required and charges clients for puts as required.
There is no real ‘inflation’ because each token issued is represented/offset by a tangible resource/service that has been put into production. This is called real growth, not inflation. Inflation would result if the supply of coins in circulation increases at a faster rate than tangible resources, goods and services come online. This leads to price increases and loss of purchasing power (ie. classic inflation). The network token will be deflationary long term due to the fixed supply, meaning that the purchasing power for network resources will increase over time.
Your casual use of the word ‘inflation’ is inaccurate here. ‘Growth’ is what we should talking about. Growth is good.
We can talk whatever we want. I believe that the rest of the world will accept the growth you are talking about as inflation.
I am sure that the coin market sites will count the number of new tokens as the growth of new tokens in other networks and will not create a special category specifically for Safe…
And @jlpell look at Bitcoin, your logic applies to it too. There are 21 million bitcoins listed in the code since day 1. But people are talking about generating new tokens not as growth, but as inflation.
And I generally agree that Safe deserves a separate category to replace the word inflation. But I will leave that to historians and use the word that the rest of the world uses today to make it clearer to more people what we are talking about.
They sure will If they keep hearing you describe it that way.
Only because they want to sound smart while dumbing things down. There is only inflation and no growth when the token is virtually useless, and utility increases at a slow rate compared to the rate of issuance. Safe Network is a different animal, it’s physically backed by data.
I think you attach too much importance to me.
But I understand what you are telling me and I will comply with you, I will try to remember to use that word. I hope it catches more successfully than mine - The 112 club
For sure you are right @Dimitar. Its clear you talk about inflation in the Austrian sense. I am also used to use it that way…
The central banks inflate their balance sheets, but this inflation is not reflected in the rise of consumer prices, but only in the prices of assets like shares, bonds, and crypto.
Sorry, but as Dimitar said, Bitcoin also had all those 21 mil. BTC at the beginning and it does not change anything at the fact every newly mined BTC dilutes all the BTCs in circulation.
Luckilly those old days of cheap BTC when inflation was wild are over. Soon we will be below 2% of inflation p.a. and declining.
I know what you are talking about. Your “inflation” here stands for “decline in the price of SN in $ terms”. Inflation in @Dimitar sense is there will be new SN diluting old SN.
And yes, if the inflation of new currency reflects the amount and quality of real goods in the economy, the price of goods stays basically the same. But still, this inflation prevented the price of goods to decline (the price of the token to rise).
Measures of worth, inflation, deflation, are complex topics. Above is my armchair philosopher’s take on it with regard to Safe. Part of it comes down to how things are strictly defined. Imo, inflation vs. deflation are best viewed through the lens of purchasing power for tangible goods and services. Inflation causes a loss of purchasing power ( that is how it is defined). Relative rates of growth need to be considered on their own. Growth is fundamental.
Where’s @DavidMc0 ? I thought he was our resident economist?
As a person in the crypto world, I am used to talking about inflation only as printing new coins against the old number of coins. As @fredbone describes it:
Now you caught yourself… Yes, we also use it in that way… Inflation CAUSES a loss of purchasing power. Inflation IS NOT a loss of purchasing power.
Ceteris paribus inflation of money supply IS loss of purchasing power. But since we don’t assume ceteris paribus, we need to distinguish those.
We completely agree on that one. CBs inflate but because there is a big technological progress in the world, the price of goods does not rise proportionally.
If they kept the amount of currency in circulation stable, prices would go down cause there is a big technological progress.
I know where you coming from. Let’s not talk about things like “SafeNetwork is a printing machine” and stuff. Please @Dimitar, be more careful with this. It can only hurt us.
On the other hand, I think saying 5% of inflation goes to Foundation is not problematic at all. It’s just a straight fact.
No, I dumbed it down too much and got caught. Inflation is a general rise in price of real goods/services over time. It is caused by relative rates of growth. I know the two ways of talking about it get conflated in common parlance, but there are standard definitions.
Has the price of a hamburger increased or decreased in terms of BTC since 2009? If so then the BTC community suffered from inflation.
Ok, how about settling? There are two inflations - one is “monetary inflation”, the second is “price inflation”. Ceteris paribus those are the same, but in the real-world, those are completely different (but correlated) beasts.
Lol, I don’t have the time to follow the discussions closely at the moment sadly. I’m very interested, but it’s too much for me to get my little brain around with the time I have available!
I used to enjoy you and Neo coming at me when I would suggest the planned Safecoin supply increase serves no necessary economic function for the network
If people want to use the words inflation / deflation in contexts where it could be easily misunderstood, just stick ‘monetary’ or ‘price’ in front of it to remove any uncertainty. (edit: I now see Fredbone just said this!)
A post was merged into an existing topic: A Second (vampire) network attack - discussion
So true. Saves all the arguing over semantics and concentrates the debate on the underlying meaning.
There will be monetary inflation, but that may or may not result in price inflation. Price inflation depends on demand for the token too.
I think we all agree on that one.
Has it been clarified yet how the network will set pricing for puts & resources? I’m very much out of date with all of this, but don’t think I ever got a grip on the mechanism.
Edit: found the rfc here: rfcs/0057-safecoin-revised.md at master · maidsafe/rfcs · GitHub
I guess you could count the tokens held by the network as outside of the ‘circulating supply’, and tokens held by other network participants as ‘circulating supply’, in that those are the only coins that can be traded / transacted by participants.
If the network were to increase the token supply more rapidly than growth in demand for network services, it could put significant downward pressure on the token’s price, which I think would be a worry for many holders. Do you know if the proposed mechanism of issuance able to prevent this?
You really don’t have to worry about that, because the price is determined by the ratio of new users to old ones. Bitcoin had huge inflation in the early years, but new people entering Bitcoin were growing much faster…
My point is:
“Is it moral to to dilute original holders quickly?”
Yes, SafeNetwork has so much potential that price will rocket after the launch even when the plan will be set up to reach 85% of max cap in 2 years. But would it be moral when, as I understand it, investors were promised there will be slow emission taking decades - similar to Bitcoin.
I see a big threat in the quick dilution of current holders by reaching max cap too quickly. If I understand @Dirvine well, the high inflation distribution scheme IS NOT off the table.