Price difference between public and private data

Public data upload price is planned to be 25% of private data upload price. After thinking about it for some time, I don’t think charging differently is a good idea for the following reasons:

Ideological
One of SAFE’s main goals is providing us with digital privacy. More expensive private data prices gives people on a tight budget the incentive to upload their personal data as public data. We’ll essentially be in the same situation as we are right now, where people use services that destroy privacy because they are cheaper (free).

Economical
In the end, the network has to make sure that it’s expenditures are equal to it’s income. A 75% discount on public data is essentially a subsidy which has to be paid for by something else. Since expenditures (farming rewards) are a given due to SAFE’s independent farming rate algorithm, the subsidy on public data will be paid for with a higher private data price.

Imagine the network needs to have an income of 1 million SafeCoins over a certain period of time to be able to sustain it’s farming rewards. In other words, the network will set the upload prices in such a way that:

Public data income + Private data income = 1 million SafeCoins.

Let’s assume that an equal amount of private and public data is uploaded, which together equals (for simplicity) 1 terabyte (a million megabytes). So 0.5 TB + 0.5 TB results in an income of 1 million SafeCoins. If prices are the same for both types of data, this means 1 SafeCoin per MB. If however public data prices are 25% of private data prices, this results in 0.4 SafeCoins per MB for public data, and 1.6 SafeCoins per MB for private data:

(500K * 0.4) + (500K * 1.6) = 1 million SafeCoins

However, I think it’s likely there’ll be a lot more public than private data on SAFE, because most people create data to share it with others. If for example people upload nine times as much public data as private data to SAFE, we get this:

(900K * 0.77) + (100K * 3.08) = 1 million SafeCoins

Compared to the situation where there is no price difference, we now only get a discount of 23% on public data, and we pay more than 3 times as much for private data! This would be quite bad for SAFE’s competitiveness on private data.

Technical
In addition to the above, people may try to game this rule by asymetrically encrypting their chunks with their private key before symetric self-encryption is applied, after which they upload it as public data (un-encrypted datamap). This undermines the goal of the price difference between private and public data, and destroys the network’s ability to de-duplicate this data. In addition, this public-private data is less secure than real private data.

I doubt there is a way for vaults to detect this*, but even if there is, it means a bigger workload for vaults and additional code and complexity. If there isn’t, people will use this exploit (honestly, I would make an app for this myself), so a larger percentage of the network’s data will be “public”, which will aggravate the Economical effect described earlier.

*I assume that the vauls normally recognise data as public if a valid (matching hashes) datamap is provided by the uploader.

Solution
If we want to encourage people to share data to foster public knowledge and resources, I think it’s a better idea to intensify the GET-popularity reward scheme than to give a discount on public data uploads. It doesn’t have the bad side effects described above, and as a plus it only rewards data that is actually popular, which is probably the best metric we have for usefulness of data.

Regardless, different prices for uploading public and private data seems like a bad idea to me. I hope that we either scratch that plan or that someone can prove the arguments in this post wrong.

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But they can encrypt their data before they public-upload them, and since public space is cheaper, that’s what they’ll do.
(Edit: I noticed you mentioned that below).

They’ll encrypt. That’s of course is yet another problem - why should encrypted private data be subsidized by the network?

Yep and let’s not forget how certain individuals also wanted to give away freebies to “motivate” people to make private data an order of magnitude more expensive.

Remember that “Gmail Drive” thing from 10 years ago, which allowed you to use Gmail as a free online drive?
That was before Dropbox and so on, when 3 GB of online space was a lot.

Can you elaborate?

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Can someone tell me what was the reason to offer 75% discount on public data (or point me to a document)?

No I don’t. What’s your point?

Currently there is a plan to use percentage (5 or 10, can’t remember right now) of the SafeCoin supply to reward uploaders of popular public data. A wallet address of the uploader is stored (with the datamap I assume). For every GET of that data, there is a (very) small chance that the uploader will be rewarded by the network with some SafeCoins. Caching should make exploiting (GETting it again and again yourself) impossible.

David Irvine initially wanted to make public uploading free for ideological reasons. Others were concerned about a potential tragedy of the commons situation, so, as far as I know, the 25% was a compromise. The 25% is mentioned here.

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Hm, ok, I need to read more into that, but I see the same problems that you see and not a lot of reason not to charge the regular fee. If it was for the network factor one could subsidise the network over a certain period/sum to reward early birds.

Hmm, most people who’s into online storage knew about it (http://filehippo.com/download_gmail_drive/).

But the point should have been clear: as soon as under-priced storage capacity became available people quickly coded apps that could exploit that capacity. Similarly to Gmail Drive, one could run something like a TrueCrypt locally and save that to public shares.

Whoa. I was ranting against freebies in all discussions where I noticed the idea, but this passed under my radar.
To avoid a potential tragedy, let’s create a certain tragedy!

Edit:

Scenario 1: Private Data on SAFE Network is more expensive than prevailing rate on other projects

In this case, people will tend to use SAFE for public data, which will make private data even more expensive, etc.

Scenario 2: Public Data on SAFE Network is cheaper than prevailing rate (for private data) on other projects

It makes sense to farm on other networks and post data to public SAFE Network shares (since data are already encrypted by the other network). As I mentioned elsewhere, it will make sense to sell long term contracts for storage on other networks, park them on SAFE, and retrieve them periodically for validation (if required).

This is quite clever! People will use this trick if they can. To be honest, I think that all data should be just treated as data. So public, private, structured and unstructured data should all cost the same to PUT. And I think I know @dirvine his weak spot, he’s looking for simplicity where he can ;-). All Vaults will have data in all categories, so as a Vault you wouldn’t feel any difference in payment.

Structured data is heavier in network load (forgot the exact reason why, I think it was related to churn mechanisms), so then I think it’s fine to make it proportionally more expensive.

As a Vault, you’ll serve say 20% structured data, and 80% public data. Let’s say the 20% structured rewards you 60% of the Safecoin when Farming and the public data 40%. What does it pay for? For you providing the Chunks, electricity etc. and some profit-margin. Now, let’s say we’ll make everything cost the same, would you get less? I don’t think so, and if so, people will only run Vaults when they get payed the fair price and some extra profit. So ALL actions the Vaults do will be in the price of Safecoin anyway. The network will balance this out IMHO.

On the other hand, when people need to pay (burn) more Safecoin to PUT structured data, there will be less Safecoin around, so the price goes up :relaxed: But after that, more people start to Farm so price should go down a bit when FR goes down. So at the end, all costs are equaled out to some Safecoin price all Vaults and PUTters are happy with. I think is doesn’t really matter.

Like I was saying on the other thread – Not so fast! People host Bittorent, Skype, TOR etc without payment at all. The rewards of the network are ample. Assuming that monetary compensation is the only fuel for economic activity is incorrect. The SAFE network has ample merit for the public to want to host it just because they want it and want to use it. SAFEcoin can be used to enhance it even better, but it is not wise to believe that SAFEcoin is the only motivator for supporting the network.

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I agree, but let’s say that someone comes up with a new Bittorrent, is uses the same torrent files as we have today, but when you upload more than you download, you’ll get payed some altcoin. Would people jump on it? You bet. Just like Bitcoin, people did some CPU-mining, than they jumped on the GPU’s and all gathered in pools just to make some BTC. When SAFE get’s a million users I’ll bet that a lot of people are running Vault to make some money, although I agree a lot will just run it to “get what they give” or just for the fun of it, and to help the network. I’ll run Vaults as well in the beginning, even if I already have enough Safecoin. But when economics kick in, I’ll bet the network will balance to a way that people actually make some money when they run a Vault.

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Right, but running the vault for the sake of running the vault isn’t terribly helpful unless lack of space or lack of bandwidth is the constraint holding SAFE network back. If SAFE is at 10-20% capacity, rewards ought not be terribly good, because there is no sense in the network paying for more stuff that it isn’t going to use anytime soon.

If most folks who join give 30-50 GB that they had laying around and where not using, they are not making a massive sacrifice that deserves profit… They are joining the network because they want Security, privacy and freedom. Giving them that is the value they are looking for. handing them more just because we can doesn’t make a ton of sense when that money can be routed to App builders and content providers etc that will make the network even more compelling.

If the network is at 80%- 100 percent capacity then yes, being able to provide payment becomes important…

I don’t think the 90-10% split is necessarily the right formula… It would be better to pay the farmers a market rate. When “free” is the going price on the other networks, I suspect 90% is a bit high of a starting point.

Certainly SAFEcoin is a necessary spam protection. One should not be able to infinitely use more than they give… But I don’t think it is the key component to making the network work by any means.

It seems some folks on the forum think that the community will always prevail over economics.
If MaidSafe grows to over 1 PB usable, it will become economically viable to write custom software that takes advantage of imperfect (artificial, non-free market pricing for storage services.

Gmail was like that and Gmail Drive appeared within a quarter or two (URL in my earlier comment above) and the same happened to Torrent software (http://www.greedytorrent.com/about.php) where there is no reward for seeding and uploading. @JReighley says people do it for free and that’s true, but usually only while they’re downloading. Once they’re done, they hit CTRL+C (or even create software like GreedyTorrent, so that they can lie about their “contribution” throughout their download time).

Bad economics isn’t always exploited, but if it’s large enough it makes sense to invest resources to take advantage of mispricing.

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It’s not about vault earnings, it’s about how people will use StructuredData. If it’s the same price as unstructured data, people will misuse StructuredData. It has to be more expensive to limit it’s usage.

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Every market is imperfect.

Farmers ought to be paid whatever it takes to have ample vault space…

I don’t think that is a ton. A lot of people assume it is, and I disagree.

My point is that it ought to be market driven, not some arbitrary percentage… If you are a buyer you don’t put your opening bid at the ceiling, you start towards the floor. SAFE network is the buyer, and ought to behave as a rational buyer.

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As we know @dirvine doesn’t like magic numbers, so I suspect they will all be looked at more closely over time.

I would like to see the network choosing the numbers based in supply vs demand, so that it is always affordable, for example. Of the data reward is getting exploited, it will need to fall to a rate where it isn’t. If structured data is being used for a large percentage of data, the cost should increase to discourage it.

We don’t and maybe can’t know what the best numbers should be. The best thing to do is to write an algorithm which continually adjusts to head towards the ideal, based on an ever changing environment.

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I don’t agree on this one. When people run a Vault they help others get their Chunks as well, so they’ll route a lot of Chunks to close nodes. They also cache, so when a file becomes popular (even not in their Vault) they’ll provide it like little ants passing grains of sand to build the house. Everyone who runs a Vault is supposed to do a lot more than just providing discspace.

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Yes.

Still. If my computer is on anyway, and I am not capped for bandwidth, chances are I will not notice. The larger the network is, the less and less likely my share will be significant at all.

Farmers deserve to be paid whatever the market decides, but it would be best if the market decided rather than the opening bid being 90% of everything…

My plan it to put a few terabytes on the SAFE network as a vault and leave it there. I am not going to turn it on or off due to much of anything. If I use more space than I have coin, I will add more storage. I suspect most people will behave like I do . There is little incentive to do otherwise. If my ISP starts sending me bandwidth bills, I better be earning enough to cover it, but if I don’t and SAFE is not anywhere near capacity, me turning my vault off will have little effect on the network’s operations.

What is this 90% thing you’re talking about? I’m not following.

My understanding was that 90% went to farmers and 10% went to app builders etc, correct?