No wonder I’m confused, it seems so many variations have been thought about, but nothing set in stone as yet that is actually workable.
1 Like
If I understand the current system correctly the tokens of the new people are used to maintain their own upload and the data storage for all previous uploads.
This system only works if the price of the token is constantly rising. As we know, there are bear markets in the crypto. There must be a reserve capable of absorbing a significant drop in the price of the token combined with a significant reduction in the use of the token.
For such a situation, having a foundation that can influence the uploading of data to the network will be extremely valuable.
That makes no sense to me. You state.
Not saying I agree or disagree, but following your logic, the price must keep rising.
Then you state.
OK, fine, I agree.
Then you state.
I fail to see how a foundation that gets effectively free tokens will keep the price moving upwards when they dont purchase the tokens.
Farmers are paid in tokens that people spend. If we are in a bear market and the price of tokens is low and for some reason people upload little new data, we need a third party to start uploading data and spend tokens to compensate for the reduced yield for farmers.
The current system assumes that if the price of the token falls, people will buy and spend more tokens. This is not guaranteed at all and if it does not happen and there are no enough new tokens in the system to pay farmers, the whole system will enter a spiral of death.
A foundation that has a reserve to use at such a time will be able to distribute the tokens to farmers through the network through uploading more data.
Of course, this will probably put additional downward pressure on the price, because farmers will have more tokens to sell, but the assumption is that this is only temporary and whatever the reason is which stops people from buying tokens will disappear and people will start buying again.
Of course, if the wallets of the sections hold a reserve for such cases, then the foundation will not be needed for this activity. But according to David, wallets do not hold a reserve.
OK, I get your thinking, but its not really at all relevant to your statement that the price must keep rising in my mind.
Indeed, we need surplus tokens, why bring in a third party when the network is capable of managing it?
It just causes more problems and leaves the network at the mercy of the third party which is far from the autonomous network that were supposed to be building.
Let me explain it with the following analogy too.
Bitcoin miners are paid by transaction fees and the block reward.
Safe Network farmers receive payment from people’s transactions (for data storage) and from a reward from the Network Reserve (the monetary inflation).
If the transactions fall in numbers and it is not enough for all farmers to make a profit, or at least equally, they will start to stop their farms. In this analogy, the Foundation intervenes and starts making transactions.
I am well aware of that. I think the reason David doesn’t want the sections to keep a reserve is because in this way there’s no reason for them to be attacked and hacked.
As long as the price rises, it does not matter whether there are decreases in the number of transactions, they will be offset by the rising price.
By the way, if you think about it, the Safe Network and Bitcoin are very similar if you think of farmers as miners who process transactions. The output of the miners are blocks, the output of the farmers is data.
The difference is that Bitcoin can exist with 1 miner, ie. it is able to shrink, while the Safe network can only shrink to a certain size. Therefore, it is absolutely mandatory to have a reserve of tokens for moments of reduced transactions.
And while we are on this topic, I think that the current economic model does not take into account that there will be people buying the token entirely and only for speculation. These people will sell the token during a bear market to speculate on the possibility of buying it cheaper later. Bitcoin and alts often fall 85-95% down in price, I don’t think Safe’s current economic system can survive in such a situation.
Yes, I get you.
I’m against needing a 3rd party though, if there is one I’m not against it. Backup solutions are good.
But the network needs to be able to stand on its own 2 feet, this requires a mass of surplus coins for just that need. In my mind anyway.
As neo stated in his last paragraph
And for the other reasons he mentions further up, i see the buffer essential.
And I’m in full agreement, why not keep what is current.
I’m not sure why the rfc and davids statements seem to be at odds with each other, maybe they’re not, but I’m not understanding why the change of mind to push tokens out as opposed to keeping them for times of need.
In my opinion, many of these contradictions stem from the desire to claim that the token itself has no value and only the data have value.
The token has value because it protects the network. But this desire to deny that price matters is crippling to the discussion and to finding the best working solution…
Or you can have an autonomous data network with a reserve buffer that manages this automatically.
1 Like
Did you see David’s statements that section wallets would not hold a reserve? The foundation is a solution only if what David says is put into practice.
Maybe he will change his mind. If the network is secure, then section wallets shouldn’t be a problem. There are ways to reduce the chances or perhaps even eliminate the possibility that a section wallet could be compromised.
It would be nice to hear a rationale for why a section wallet protected by multisig would be likely to get compromised.
1 Like
Iirc, the idea was to minimise possible attack vectors , no more no less.
Edit.
But then someone came up with a plan for puzzles to unlock coins.
I thought at this point the idea to push out coins fast was dropped.
Hang on folks, there’s been a lot of discussions regarding farming rewards and many options. More recently we decided get a simple workable solution in place, make sure the whole network works and pulls together then focus on the rewards algorithms.
This is where we are and I should be clear we are implementing a sub optimal reward mechanism right now with the view to be able to spend time and focus on only that in the near future.
It’s a complex issue and there are many “solutions” but the one we go with will need to be incredibly clear, simple and hopefully never depend on humans 
21 Likes
I know we keep on going round on this, but I do think it is quite crucial. It’s not just a “desire to claim” that the token has no value, only the data… it is a statement of fact that:
- Without data, the Network—and therefore the token itself—cannot exist.
- Farmers only get paid when the Network is used for data.
- The more people that are using the network for storing their data, the more resilient it becomes.
- The token is a mechanism that allows farmers to exchange data storage resources with people who want to store and use data.
6 Likes
Although both are involved in Safe’s value, it’s neither actually. What has value is write operations [of data] to the network.
The token, as so-classified, has no intrinsic value. That’s why it’s not money. An easy way to see the difference between a token and money is a game arcade. You use money to purchase arcade tokens to use in playing games, but the tokens have no intrinsic value outside of the specific utility; Safe network utility write operations here.
I’m not so sure about how you are defining this.
Commodity money is still money, it just represents something that has intrinsic value like wheat or, say, data storage.
If there is a high demand for wheat, then ‘wheat tokens’ go up in price, because they can be exchanged for wheat. I might choose to use them as a way to pay for other things though, if I want, but ultimately their value is aligned with how desirable wheat is at a given time.
But if no-one wants to eat wheat anymore, or some disease kills it off entierly, then your wheat tokens are worthless no matter what you are using them for.
1 Like
Is there a network in the world where people burn huge amounts of energy and only use it to store value?
Obviously, the Safe Network can also be used in this way by humanity.
The printing of new money has value for humanity, even if it has no intrinsic value for the individual.
The Fiat system exists because, although it steals from individuals, it contributes to society as a whole. The Safe tokens will have value for our society because they move the printer for new money closer to the people.
It matters where you put the new money into the system. Currently the money are being pushed to the top and distributed inefficiently, the Safe network moves the printer for new money closer to more people, which will increase the efficiency of everything in society.
This will allow everything you say to come true as well. The result is a system in which we profit from the data and from the printing of new money.
It is obviously a contentious and continually debated point as to whether Bitcoin has intrinsic value. But the argument comes down down to it’s use as a medium of exchange. Which is certainly interesting, and not something that everyone agrees with.
Fiat money has value for society, but it has no intrinsic value as you point out.
But Safe Network Tokens literally have intrinsic value because they can be directly exchanged for data storage resources. Over the long term, what increases the value of a SNT, is demand for data storage.
The more useful the network is for people, the more it replaces the existing clearnet infrastructure, the more demand there is for farmers resources, the stronger the network becomes, and so on…
The fact that the tokens have many of the properties that are desirable currency, is a happy biproduct to the cake, but not the cake itself.
Could the Network survive if it was just used for payments and nothing else? I don’t know the answer to that probably one for someone like @mav to have a go at.
I’m not sure I follow your reasoning on the money printing thing.
You seem to be against money printing generally, in the Fiat / central bank sense.
But then a proposal to spend “inflation” on storing more data on the Network (which while I agree would be useful to those who wished to consume/utilise that data), well isn’t that a form of money printing? The ‘foundation’ becomes a central bank, with humans in control, releasing more data into the system as it see fit?
6 Likes
Dimitar prefers to use sensational terms like ‘money printing’ and ‘inflation’ instead of more mundane business terms like ‘creating value’ and ‘growth’. Iirc he believes that his language appeals to cryptonaughts more and is easier for them to understand so he continues to speak this way.
As I alluded to before, the community needs to be very clear with their language here and use economic/business terms as they are academically defined imo. It’s important for us to get this right and not be sloppy.
Dimitar does bring up a good point about the fact that Safe Network could have significant value as a payment system even if it wasn’t backed by chunked data as a commodity.
2 Likes
Bitcoin cannot and does not have intrinsic value for a biological individual. Only food, water and a partner have intrinsic value for biological individuals.
But people do not exist as individuals, they vexist as part of society. Money has an intrinsic value to a society of individuals because it allows them to grow above a certain size.
We humans function perfectly in small groups and without money, because of something called reciprocity, which is in our genes.
But in order to grow above a certain size, society needs a sorting mechanism that shows which individual has what benefit for society.
Thus, people who do not know each other can exchange goods and also, even if they do not exchange anything directly, allow individuals to know where an individual is in the hierarchy of society without aggression.
Printing new money allows this new money to be given to individuals as a loan with the idea that these individuals will use them to improve their lives and eventually the lives of everyone else in society.
When you deposit money in a bank, your money goes in the bank’s notebook not as an asset, but as a liability. But this gives the bank the opportunity to take new money from the state to distribute among the people.
Therefore, although new money reduces the value of old money, there is very little inflation - because new money creates new businesses that increase the benefits for society as a whole.
What is the problem with this system is that the printing of new money is centralized, and when individuals or rather corporations fail, states give them new money instead of letting them bear the consequences, and the damage from their failure is spread throughout society.
We call these corporations Too big to fail.
Cryptocurrencies promise to change this by decentralizing the printing of new money. In such a system, there can be no corporations that are too big to fail because there is no one to give them new money - the printer is decentralized and people will vote with their money.
The problem with bitcoin is that its new money printer is becoming more and more centralized.
That’s why Ethereum is growing faster in value, because its printer is more decentralized.
The Safe network will move the printer for new money even closer to the people because they can farm with devices that are more accessible to individuals.
The problem is that, like most new revolutionary technologies, enforcing the Safe Network is more likely to be a decades-long process than a revolution that takes several years.
Why? Because we know from history that most people feel extremely comfortable with the system in which they live. The struggle for women’s voting rights in the United States has lasted for 90 years, because in addition to men, women themselves have been against women’s voting. Women protested against women.
It is very likely that we will see the majority of humanity against the Safe Network. For example, someone will upload cartoons of Muhammad to the Safe Network and Muslim religious leaders will ban them from using or participating in it.
That is why it is very important to make the network economy as good as possible. And for that, we need simulations that predict how the network will grow in resilience to medium- and large-sized vampire attacks.
1 Like