That is the problem: Once launched it is decentralised market forces that set the rates depending on the utility of each alt-Safecoin per my previous example. If we are all trading between them (and now I have thought it through more) your open to market forces regardless of one or two way exchange between them, it makes no difference. Fiat uses legal tender laws to enforce the fixed market rate between dollars and cents (although many shops usually hate accepting many low denomination coins, in most countries it is still illegal for them to refuse or ask for a extra fee, and the criminal underworld is known to exchange more for their 500 Euro notes than their 50 Euro notes I have read - it has more utility for them)
This is not correct because you cannot guarantee a rate between separately traded alt-Safecoins either up nor down on the “division” scale. If any one or more of the alt-safecoins becomes rare for any reason, e.g. has more utility for use by popular killer app(s), on average is bought up by speculators and hoarded slightly more etc etc then all the other alt-Safecoins above and below it on the pseudo division scale cannot have a guaranteed exchange rate. This could come about in a perfectly bottom-up decentralised way as the invisible market hand - many people saying: I am not willing to trade my 100 SafeCents for 1000 SafeMilliCents because most of my current apps only use SafeCents. If I receive any other Alt/Safecoin then I am going to try and trade it for SafeCents ASAP where I can use it (or it appreciates in value more - a self fulfilling prophesy). Certainly hoarders and maybe even certain App makers will prefer this market “distortion” as it increases the profits generated by their App and decreases the incentive to accept other Alt-Safecoin types in a kind of feedback loop.
[quote=“happybeing, post:235, topic:4799, full:true”]
So I don’t see how your flags get waving in this scenario! Demand for one becomes demand for the other.[/quote]
Red Flag: How are we going to peg the exchange rate in a decentralised way to guarantee exchange between the Alt-Safecoins - assuming they all have fixed supply and can be owned by individuals?
Maybe Maidsafe foundation plans to setup a deep pocket slush fund that monitors the alt-Safecoin exchange market and increases/decreases supply of each alt-Safecoin using a hopefully large enough reserve fund so that the peg holds and a illusion of division is maintained.
Bitcoin and all other alt-coins that I am aware of avoid the complexity of this system altogether. When you own 1 Bitcoin you also already own all the possible divisions, so there is no market forces in play to distort valuations. Simple, elegant, no slush funds or legal tender laws required. At the end of the day this whole system of using alt-Safecoins to simulate division really needs to be grilled extra thoroughly and then some, because it a totally unproven concept. AFAIK there is no similar digital market economy/alt-coin that uses this kind of system, and the World of Warcraft type games that do use it are very limited digital markets with very narrow choice of good and services, shadows of real economies.
Because that is the currently favoured proposal. 32 bit approx 4 billion undividable Safecoins. Divisions are simulated by adding other lower valued “Alt-Safecoins” that can be traded for Safecoins. However head over to the the Safecoin Divisibility thread to better get up to speed and discuss more about that there.