Price difference between public and private data

That’s assuming that safecoins will predominantly be used for buying storage space. I have my doubts about that. Compare with Bitcoin which has managed to create real value even when it’s just digital money out of thin air. Bitcoins are only backed by the service the system provides in the form of transactions. In the SAFE network safecoins will be backed in a similar way by the services the system provides including data storage.

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So let’s just take away the bulk of Safecoin’s services? In fact the most fundamental aspect of safecoin? Sorry, I don’t buy it.

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The ability to use safecoins for buying data storage is a minor use case imo. Think of the potential of bitcoin. Safecoin has an even larger potential by offering the same security with much faster transaction times, true anonymity, secure coin wallet without the hassle of separate manual paper wallets and things like that for security, zero transaction fees and is farmed in a way that promotes decentralization instead of the energy-wasting and centralization-prone mining of bitcoins.

I think safecoin has an enormous potential that goes far beyond merely as a token for buying data storage. In fact, I have started to believe that data storage on SAFE (even private data) can be made completely free. Farming will become so popular that there will be an overabundance of resources in the SAFE network. So the bottleneck will be usage, not resources.

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I can see that. I, again, disagree. From the Safecoin whitepaper:

The requirement of users to contribute is an unmistakable part of any P2P network and the implementation of incentives is essential to ensure its health.
[…snip…]
…safecoins which are paid to the network in exchange for network resources, will be recycled and made newly available to Farmers as an incentive to continue storing new data. This will create a virtuous cycle of exchange in both directions between use and maintenance of the network.

Without paying safecoins for data storage, there are no farmer rewards. ← This is very important to understand.

Consider this: with Bitcoin, miners will still get dividends even when there are no more Bitcoins to be mined. They will receive the transaction fees from the users when they process the users’ transactions. Those transaction fees are paid to the miners for the service that the miners are providing to the network. That service is the verification of the transactions.

To complete the analogy: farmers will get dividends even when the safecoins have reached the balance point. They will receive the reward from the network when they successfully farm a data chunk. Safecoins are paid to the network for the service that the farmers are providing to the network. That service is data storage and retrieval.

Once again:

The requirement of users to contribute is an unmistakable part of any P2P network and the implementation of incentives is essential to ensure its health.

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I can recommend a fix for that: Simply remove the lines of code that withdraw safecoins from the users’ wallets. :wink:

###That which is seen…

Smacz, note that you could reward farmers for GETs while still offering free storage, and that is what the network does by design (it is so incredible, it took me a year to realize that).

Anders’ contribution to this “economy of abundance” approach is to “improve” it by doing away with the unnecessary and discriminating charge for private data (after all, if public data are cheaper and people hoard in that space, why not eliminate the problem by discounting all prices to zero). The network could still pay farmers for GETs. Nice, huh?

Also note that this is the same approach that socialists apply in real life: resources are limited, but needs aren’t, so rather than deal with the scarcity, let’s just make the scarce resource “free for all”.

For example, let’s print money and give it away to stimulate the economy. What’s the big deal? Invoices get paid and workers get their pay checks as usual, right? In case of the gratis SAFE, Anders says farmers could still get paid, so what’s the big deal?

What’s the trick? There is no trick, says Anders. We just eliminated artificial scarcity! What especially worries me is that the current design is not that far from what Anders argues for.

###Free Market Economics

@anders you are seriously misguided, young man. As someone said earlier today you’re so wrong on so many levels that one doesn’t know where to begin.

You should spend few weeks on mises.org forums and then come back. (Just a friendly suggestion.) Of course you’re also welcome to continue with wishful thinking.

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We can start with the following question: Will there be more or less usage of SAFE with free data resources?

@anders’ proposal would lead to endless inflation, probably even hyper inflation and then a subsequent collapse of the network.

There should be a maximum of SafeCoins that will ever exist, or else they aren’t a store of value and a SAFE clone that does implement a maximum will overtake the original SAFE. None is interested in holding a crypto-currency that suffers from constant and endless debasement.

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The increase of the safecoin supply will be determined by how much the system is used. And the more the system is used, the more the total value of the SAFE network which will increase the market cap of safecoin. The market value of safecoin will be the total value of the SAFE network divided by the amount of safecoins in the system. The safecoin supply will increase along with an increase of the total value of the system, leading to a dampening of the inflation.

To add to Seneca’s (mid/long term) hyperinflation comment, initially there would be more usage in case of free PUTs for all, because you would be artificially underpricing a scarce resource.

Your theories how that would make the network popular and busy are meaningless. You seem to think that free PUTs mean more data on SAFE, which means more reads, and so the combined effect is that there is not much difference to the network whether uploader pays for PUTs and (private) downloader for GETs, or just the latter: in either case the farmer gets the same amount of SAFE coins.

But there is a difference. If PUTs are paid, you cannot store close to an unlimited amount of useless garbage on the network. PUTs are limited because resources required to accommodate them are limited. So by removing this real constraint (available storage) from the equation, you motivate uploaders to completely uneconomically use available storage resources, and it’s very predictable how this story ends: farmers end up with vaults full of garbage data which gets very few reads, the network reacts to that by increasing the price of each GET (because that’s the only way to pay farmers) which in turn chases away “honest” GET users (and probably some farmers too), which further increases the price of each GET, etc.
At that time you’d also start witnessing hyperinflation.

In the current official model there is at least a small barrier (PUTs aren’t free) to complete tragedy of the (uploading) commons. I am not completely sure it will be enough (don’t let me discourage you - 4 out of 5 forum experts agree that the current model is workable).

I wanted to paste few relevant Mises Institute links for you here, but I can tell from the speed of your response how confident you are of your knowledge of economics, so I figure it’d be pointless to try.

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My idea is that there will be so much overcapacity in the system that it will be able to swallow attacks like that, and therefore the incentive for such attacks becomes eliminated.

Yes, that’s what I said too: socialists believe that resource constraints are artificial and can be ignored.
But ultimately you run out of other people’s money.

In any case I haven’t seen any comments in support of your idea, which means it’s probably not getting a lot of traction (and I think for obvious reason: everyone would be quickly ruined by it, from investors to app vendors to farmers). Time to build a better mouse trap?

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So, how many petabytes of extra storage capacity will the system have some year after launch? I predict many. And in the beginning, when the network is small, Maidsafe can set up some really big farms just as a buffer until the network has grown big enough.

Related to the free PUTs idea, it doesn’t matter how many there will be. It only matters whether the number will be unlimited or not.

My own prediction is 4-5 PB usable (assuming launch happens in Q1 2016; otherwise HDDs will get larger, etc.).

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Does that estimate take into account that farming could get like crazy popular? Everybody and their grandma will start farming. Like immediately! Well, farming will get very popular at least.

  • 200 farmers x 20 TB usable = 4,000 TB online. Or 100 farmers * 20 TB + 1,000 farmers * 2 TB.
  • I am most likely wrong.

Any chance you could elaborate on this? This whole freakin’ thread has me totally confused.

Where does the farming reward/PUT cost ratio come into play? (self-adjusting algorithm of the network…)

I read that there is a random reward given to farmers. Is the randomness needed as a part of the security of the system?

I had in mind that the farmers can be rewarded with micropayments for exactly what they contribute. A PUT will reward the farmer X safecoins, and a GET rewards the farmer Y safecoins. The values of X and Y are automatically and dynamically calculated by the system.

In my scenario both the PUT and the GET are free for users. In this way safecoins are generated in a manner similar to bitcoins. In Bitcoin the transactions are free for the users (with an optional transaction fee) and it’s the system that itself rewards the miners with bitcoins.

Look at the current market cap of bitcoin: $3,600,000,000. That’s a decent amount of dollars for something virtual. Similarly, safecoin will become worth a lot of money. That value alone, the value of the cryptocurrency itself, is enough to fuel the whole SAFE network. It’s unnecessary to have users pay for using SAFE data resources. Not only that; having a cost for using the network will hamper its growth. That will increase the risk of a another decentralized network outcompeting the SAFE network by providing free usage.

Farmers will benefit from free SAFE data resources, because that will increase the use of the system, and the farmers will be rewarded more safecoins and the value of safecoin can become higher because of the increased user engagement (making safecoin more popular and attractive).

The SAFE network with free data resources will easily be able to handle spam and data storage attacks. It takes for example 24 hours for an attacker to upload a single 1 TB file with an upload speed of 100 Mbit/s. And the SAFE network will have a lot of excessive data storage available. So spammers can pump all the crap they want into the system without affecting its function. The spammers and attackers will only waste their own bandwidth and time.

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So are you saying that a typical attacker who has his/her botnet, can only achieve 1TB / day and only 100MBits/sec?

That is like the early nineties.

[EDIT: to be clear I am alluding to an attacker who use botnets of 10’s to 100’s thousands of computers. And imagine a few of them for days/months]

Free uploads will see the storage always used up. Forget attackers. Ordinary people will upload their media libraries in their private data areas and seeing as they will have different copies because of the way they rip their media, dedup will only save so much. Then you have the 5TB/day of NNTP porn that will transfer to cheap [free] MAID storage. Then you have the PBytes/day of ordinary people’s pictures/filming/etc being saved to the SAFE Net without regard for where the actual storage is or how much is actually available. [Why buy disk drives when you get “unlimited” storage for free]

[EDIT: to be clear this will number in the millions of users uploading at least a TB or more per year]

Then farmers get coins that have nowhere to be spent, no resources need to be bought. People will not take safecoin because all they have to do is add disk space, they get paid in your model for just storing data. So each day they trash their disk and start again getting paid for the new data being stored on their disk. Hell buy 1000TB of disk and trash each day and get 1000’s of worthless safecoins.

Get the point farmers would be a dying breed, no value in the coin. The coins are free for most since its spare capacity used, coins have no value, because resources are free. Only hoarders will buy coin, but even they would only have a worthless stash.

[EDIT: to be clear forget inflation this is not even illustrated by wheelbarrows of cash to buy a loaf of bread. This is valueless coin. The crypto world is littered with them now]

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Yeah it’s both incredible and not very well explained, IMO.

The network looks how much available/unused storage there are, and if things are getting tight, it pays farmers more for GET requests, the idea being because data is ideally spread around the network and you can’t decide what you want to host, increased price of GET basically tells prospective SAFE farmers “it’s good time to get in”.
When there’s too much empty space in relation to demand (which can be expressed as the rate at which free space is being filled up), the opposite happens (fewer coins are being generated to pay farmers for GET requests).

Safecoin circulation starts from the network which generates them based on available storage space, distributes them to the farmers (and part will likely go to app owners, too), who then sell coins to the users and uploaders. Basically the coin supply and demand are determined on the margin and the constant printing (slower or faster) doesn’t matter because data that’s online stays online (so printed money has coverage in real storage services).

People whose vaults end up filled with crappy inactive data won’t delete their full vaults (so the theory goes) to try their luck to get more active data, because the network rewards reputation and your fresh vault won’t necessarily get any data and a chance go respond to GETs soon, unless it’s aged and has a decent uptime record. So in most cases it’ll pay to stick around and not recycle vaults.

Clear as mud?

I think I got this right, but even if I haven’t at least someone will correct me and we might finally have this explained in a non-whitepaperish way.

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