Can I correct you here. The RFC currently has a balance remaining. That balance is not the # of puts, but the value available for PUTs. If PUT cost is 0.00001 then the balance is reduced by 0.00001 for each PUT. Actually balance is a fixed point integer but the effect is the same.
Yes very much so. It was an unfortunate term used very early on and only used because it takes a bit to explain it.
The algorithm is actually trying to average out the coin creation attempts to be the farming rate. Since each GET is basically a quanta it is not easy to make an average. So the algo uses another method to make coin creation attempts only occur an average of farming rate. The lottery term was used because it is not going to be exactly that rate but in the long run it evens out to be that rate.
With node aging this is not quite as simple as it sounds. It may take a while before you are able to start farming, especially if a lot of people are trying to join at the same time. There are some nice simulations in this thread: Data Chains - Deeper Dive - Routing - Safe Dev Forum. It has been mentioned that with parsec sections will be bigger, so I don’t think it is really known at this point how many people can start farming per day etc
I don’t disagree with you. I understand how supply and demand works. That’s not the problem, though. Yes, the network will self correct, the problem is how long the network will take to do that self correction. If the network has no idea of its external worth and everything is internal, it will likely at least take hours, and maybe even days or more to self correct to a level commissurate with it’s new value on external exchanges. That means the network’s primary function is essentially not functioning during any significant price hike.
We are all speculating, heck, even hoping for these big price hikes, but those hikes will be a detriment to adoption if people try to sign up and use the service when these price hikes have made resources inside the network too expensive, and before the network can self correct.
Doubt we will see huge spikes in actual $$$ amount of PUT costs. The algo uses human nature to smooth out the $$$ fluctuations.
It takes a while to realise that the safecoin algo actually counters the $$$ fluctuations and produces a more consistent pricing that may rise or drop slowly over time. If you look at one half of the equation then yes you can see wild fluctuations and worry about that.
And of course if you see the $$$ price of PUTs too high then wait a little while and watch the $$$ price of PUTs drop as more farmers come online
Again, I’m not denying that the network counters these fluctuations, and agree that I will just wait until the network adjusts before purchasing more PUTs.
My concern is the every man. How are new adopters just looking for this new fangled “cloud drive” going to feel when they log in and see costs that seem way out of whack to put their data up? The network will adjust to price fluctuations, but it can’t immediately adjust, and people aren’t going to understand that. I seriously doubt most people have even a basic understanding of economics, enough to understand how that would apply to an autonomous network.
Thanks, @neo. That is a more code-level explanation of what the concept I think I was putting across, effectively, though much better in practice, I think.
It may be worth considering how safecoin may be valued in itself as a currency, aside from having its value anchored by its function in the network. As a scalable, fast, flexible currency that can be as anonymous or accountable (per transaction) as one desired, backed by secure storage and communication of data worldwide, with other network attributes that should be astounding in the mid-term, I can see lots and lots of people contributing resources, regardless of a glut of available storage.
I tend to agree that the price should be stabilized by the network-resource aspect, but at a high price. In effect that should cause the use of the network to be very cheap for everyone (which in turn should support the price, which should, in turn, stabilize resource contribution, etc.). I envision it to work out to a very stable, virtuous loop.
I think it’s possible that it will be able to adjust very quickly to Safecoin price fluctuations.
For example, assuming the network had a stable supply of resources coming online, and stable demand, if the price of Safecoin randomly doubled overnight, the network will try to balance supply & demand throughout, keeping $ price of uploading data pretty constant.
Because it hasn’t all been coded yet, it’s hard to say this will definitely be the case, but I think the aim is for the network to be responsive in keeping supply & demand in check… a sudden drop in demand for uploads because of a Safecoin price hike would result in an immediate drop in demand for resources at a certain price level, which the network can detect & respond to not far off instantly.
So the network won’t need any external reference to balance supply and demand very effectively… it’ll just need a good way of sensing current supply and demand for network resources is so it can balance them with each other in a responsive way.
I do not think it’s a good idea. The original algorithm, based on sacrificial chunks, prevents someone, with great resources, from trying to manipulate the price of the put by turning off or on, in a short time, many vaults.
As there have been many changes, we will see how the new algorithms are implemented but it is necessary to prevent large farmers from manipulating prices.
Depends on what level you look at it. Humans are involved anyway, who turns the computer off or on? Who decides to farm? How much hdd space is shared? All humans. In my example the human is just setting a condition for joining the network. The network could use this extra info, it will be much more predictable when a node will leave or not. You could also signal bad actors early because they will join massively (trojan horse botnets) at reduced price and could act against. Just some things I think about
I suppose we may now be discussing at a semantic/philosophy level, and it’s good to have these discussions. The way I see it, the current design does in fact involve humans, and does in fact use the market information… just not ‘inside’ the network. Humans will decide to buy/sell SAFE and under what conditions, Humans will decide whether or not to join, upload, etc… The difference between what you are saying and what SAFE is aiming at is that the SAFE network will only react to things it can measure directly and that can’t really be spoofed for any length of time. Either nodes stick around long enough to earn trust and serve resources or not… and if they serve fairly for a while then leave, the network is built for that… Humans interact with the network at the edge… In many important senses it doesn’t matter to the network whether spare capacity joins on the margin, just that there is much or little spare capacity… if not, the price of safe will rise until there is a new equilibrium between new supply and demand, engaging the crowd wisdom of human suppliers and consumers along the way. This at a certain level of abstraction is the same as the network having a list of ‘join conditions’, but requires much less internal logic and lower attack surface. Bids could be withdrawn or spoofed, then what would exactly would the network have measured? Could it be gamed? Could a malicious actor submit a bunch of low bids, get allocated a large chunk of the storage, then quit en masse? There is a reason that venerable feedback controllers are still used in critical applications, and a deep wisdom in SAFE’s design based on natural systems/emergent complexity that I have come to appreciate over the years.
Yes but humans are not telling the network what to charge. It is a real difference when humans start telling the network what to charge in “real time”.
That is not a truly autonomous since you have taken away from it one of the things that makes one independence. Your know you are truly a independent merchant when you set your prices. To do as you suggest then its a puppet following your orders and not independent and uniquely autonomous. There are other storage projects where the storage providers set the prices and they are suffering severely compared to what they could be if their network was not profit making and worked out the best pricing instead of letting human greed control the network.
In SAFE humans only get to decide what resources they provide and what data they upload. The network will be its own entity, albeit not an AI, but still its own master. You want to make humans master again and again we have other similar projects to show how well that works.
Node ageing is likely to prevent people from benefiting from switching vaults on/off to game the network in that way. (I also think I read that sacrificial chunks are no longer going to be used, but could be wrong on that one)
Given this, I don’t see a reason that the network needs to be unresponsive to market conditions if it’s capable of sensing sudden drops / surges in demand & supply.
But also it helps them since they will not be starting from 0 but a yet to be determined value based on their previous age (suggested at half). But consider an elder that has age 99 and half is 49 which is still an elder. I have yet to see the how it will be finally implemented and maybe no one has yet.
I have learned a lot from the recent discussions on Safe pricing mechanisms built into the network and external to it. Given my current understanding, I believe that the following statement is not quite correct.
If there is too little storage capacity in the network, it is not the “price of safe” that will rise, but rather the cost of puts (priced in units of safecoin) and the value of farming rewards (again, priced in units of safecoin). This is a separate pricing mechanism from that governing the value of safecoin relative to fiat. If my understanding is wrong, please correct me.
At least that would stop anyone repeating this method in the short term; repeating would keep the node age halving until they were no longer elders & couldn’t try the manipulation.
So even if there were a way to game the put price, it could either be done very rarely, or over a long timeframe, which means it’s not relevant to whether the network is able to quickly adjust to market conditions.
What strategies are there for this manipulation concept?
With needing to gain sufficient node age, any success in suppressing price will likely correspond with a reduction in rewards for their resource contribution, making the likelihood of gaining from this very low, as long as PUT price & Farming rewards are fairly well synchronised (if they are not, and PUT price drops while farming rewards don’t, there is potential for gaming it occasionally if you’re big enough).
I think that the price will be in a long scale pinned to price of hardware and running cost for farmers. If they will have bigger profit more vaults will join if not they will turn off vaults.
Some big pump and dump we will have, but should not be that big as other cryptocurrencies.
it is not the “price of safe” that will rise, but rather the cost of puts
You’re not wrong and I stand corrected I think… In defense of my statement, there is a double feedback loop: if there is little spare capacity, then you have a situation where (1) SAFE is being paid for reads, while (2) people may be holding off on uploads because of the deteriorating put/safe ratio, i.e. less burn. If farmers sell their excess supply relative to demand, SAFE will drop. If they don’t the high price will incentivize farmers to add extra capacity, lowering puts/safe. I guess that I would reformulate the statement to say that the mechanism would be effective at adding extra capacity and maybe not at increasing the SAFE/fiat ratio.
Safecoin its self may see big fluctuations in value like other crypto currencies, but the cost of putting data onto the network should remain relatively constant due to the network balancing supply & demand between farmers and users.