Is the Safecoin Economy Deflationary and would it be better with Inflation built in?

See the heading safecoin launch fundamentals

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My idea is that there will be over-paying to the farmers all the time. The farmers are the engine of the network. And the safecoin value will increase so much that it’s possible to over-pay the farmers. And doing so ensures that the network keeps having enough (and growing) farming resources.

Remember, the actual value of safecoin will be what the SAFE network provides as a service for all kinds of things. When the safecoin market cap has grown really big (to the moon), then the value of the physical data storage will only be a fraction of the total safecoin market cap.

ok i see your point and i agree that you can argue this way …

…i still think there is a problem with the long-term-stability … I like the idea of free storage - i really like free storage solutions :wink: … but I don’t trust free solutions because always someone has to pay for it … and in your system it is like a tax … everybody pays for the few people using massive amounts of storage … yes it might help mass adoption because people are stupid and don’t realize they pay … but it is not fair, an invite for abusing it and no debatable point

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It says finite amount 4.3 billion. But David Irvine wrote in a comment further down:

“We discussed these issues for a long time on the dev list. safecoins will always be farmed. Initially the cap is 4.3Billion, it is not likely to increase, but that is not impossible in ten years or so.”

Hmm… How about 4.3 billion flat rate over ten years? That’s 430 million per year increase of the safecoin supply. The IPO participants have 430 million safecoins. After ten years the flat rate of 430 million per year can continue. That would be consistent with what David wrote, and the IPO participants will be able to receive more return on their investment than when using some Bitcoin-like model for the increase of the safecoin supply.

At some point the network will grow to x amount of users and Safecoin will have to either dived or inflate in order to remain usable. I vote for the one that does not steal value.

This becomes a question of simple math.

I would say once x = 100k is when the community will have to seriously start to think about either dividing or inflating Safecoin. Because once the SAFE Network reachs a million plus user, it will start to lose its oil like properties and eventually the engine well seize.

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hmhmm - i’d say as soon as 1 SC is worth 20 cents you could think about a split … not being able to make smaller transactions than 20 cents could be pretty annoying (think about buying transistors in china or micropayments for music/film-streaming …)

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I wonder how many people/future users have Maidsafecoin right now?

Actually there would be more than one factor to consider. For example if it reached 20 cents before the coin was used/accepted anywhere then its rather mute, because you would have to exchange it anyhow.

The thread on divisibility was quite involved and discussed many things. From that thread I came away confident that the issue of divisibility would be addressed before it became a problem.

Of course if the idea of built in inflation floated earlier today was adopted (I doubt it :smile:) then divisibility would not be ever needed inflation of the coin would keep the value very low and thus usable, until that is you need 1,000,000 coins to buy that transistor, 4,000,000,000 to stream that movie once.

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You are absolutely right. Both, divisibility or inflation will solve this problem. But only one will solve it with out stealing value from users.

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hmhmmm - yes you are probably right :smiley: many factors to consider (but better being able to split slightly too early than too late ; ) … and not really the point i worry most about :wink: … first SC need to sustain for a while and prove that a local consensus can be good enough if implemented the right way =) … and before that we need a launcher and hole-punching :slight_smile:

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Key points:
Inflation is theft.
Divisibility is the only way to maintain value.

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Well the good thing is that once we get even close to the point where we gotta start dividing, we’ll have like 100,000x times as much money and as many people coding SAFE as we do today, so all sort of great ideas and inventions will appear

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My question is if 4.5 billion safe coin are held in accounts in the future and if people are manly using the safe network to download content, this would create a shortage of safe coin in the network and at times there maybe no safe coin being recycled in the network, we would see farmer winning awards but not being paid.

Is this possible?
would this increase the cost of storage so much that no one would want to upload content to the network?

As long as divisibility is possible then this is not a problem. Cost of storage will rise, but so will the value of Safecoin. Each dived coin will also have more purchasing power as storage cost rises. Even if there is only one Safecoin left and it can be divided, then that one Safecoin is all the SAFE Network needs to pay farmers and enable users to make transactions.

Edit: I would like to reiterate that the perfect amount of any currency is any amount as long as it can be divided.

The cost of storage would go up, but so would the farming reward. The network’s supply and demand algorithms will even this out before this becomes an issue. But, if for some reason it does not, divisibility will keep the network functioning.

This topic is freaking hilarious.

Something as obvious as this must be discussed ad nauseam although both the theory and practice clearly indicates that inflation is useless and that even the famous 2% “target” inflation rate has no basis in practice (or theory).
Despite all that there’s this 200 comment battle going on, just like in the fiat world.

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If everyone understood basic economics the world would be a better place.

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It’s not a question of whether division will be necessary, but when it will be necessary.

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