My understanding is that the MAID COIN is a unit of measurement built into the network in order to give a comparative value of computing resources needed by the network.
The “value” of the coin in terms of something else like bitcoin, fiat currency (like the USD or British pound), or gold or whatever is determined by the exchange of MAID for that other item.
That valuation is called a market. Same as the farmers market, etc. Also applies to bartering. What is a person willing to trade in exchange for something else.
What is known as an exchange is a place (company/website for example) where they facilitate the trade of one coin for another or perhaps a coin (digital) for fiat.
So value of a MAID coin is dependent on what of amount money(value) someone is willing sell at vs what value someone else is willing to buy at.
Something else I have learned this week. “mining” is really a bunch of computers auditing a transaction and trying to all agree that the transaction is legitimate. A better term would be “auditing”. In bitcoin, the first to do so wins a fee.
Sort of. Miners arrange a bunch of transactions into a block. Yes, all transactions are validated during this process. After picking out the transactions to be included, the next step is to apply a bunch of random numbers until a calculation (hash of the block) meets the conditions required by the network for the block to be valid. This condition is called the difficulty and it’s purpose is to control the rate at which blocks are found. This in turn controls the rate of emission of new coins so that a target emission curve can be followed.
Every full node running on the network will validate all transactions, even if they are not mining.
I would also add the caveat that the value of MAID is backed in part by the perceived price per Gigabyte of storage on the network, since, realistically, the only thing you can do with MAID is spend it on storage or exchange it.
Similarly for bitcoin, I would say the value of the coin is not only what people believe the coin is worth on the exchange, but also how much people believe the compute resources, energy, CPU cycles are worth that went into “auditing” the transactions, as you put it.
The value of all stored data on the network will support future SNT value like a commodity.
But price per GB is not the way to compare with price of Future SNT as there are no direct relationship between them.
For example,
price per GB * all amount of stored data = total network value.
Total network value / Total supply of SNT = Some part of value of SNT price
So the value of the total network would contribute to the price of future SNT.
Similarly for bitcoin, I would say the value of the coin is not only what people believe the coin is worth on the exchange, but also how much people believe the compute resources, energy, CPU cycles are worth that went into “auditing” the transactions, as you put it.
Very true, I think. And this is why I think blockchain has always been set up to fail in the long-term. What happens when a competitor (say Safe Network) comes along and can perform the same function without the underlying energy/computational waste? Game over…
Why do you think so? For you as an individual, all the information on Safe can be totally useless, and for me it can be more valuable than life?
In my opinion, the fiat value will depend like everything else - how many people are ready to sell their tokens and how many people are ready to buy them. If there is demand and there is no supply, the fiat price will go up to tens of thousands of dollars…
If you have a bigger audience for your data, its value increases. For example, video storage space on YouTube is more valuable than elsewhere, because people know where to find it.
Moreover, if data is shared and reused between apps, it also compounds and increases the value. The more data dependencies there are on the network, the more valuable it will become.
In many ways, the safe network is actually a platform. It provides libraries to write apps, along with the infrastructure to support them. Each app that binds with this platform increases the underlying value of the platform.
If people buy data for a certain total amount of $, then the Network will have value that in some part is reflected in price.
Here you make error between big and small, macro vs micro. No investor will use your subjective valuation of your own data, there will be a general value\GB, applied to all data.
Here you make error between inclusion and exclusion, I did not exclude other factors that affects price, example supply/demand, buying services and more.
Just to be on one page, you understand that the price moves up and down only from buying and selling tokens, right?
The fact that someone buys storage in the network does not move the price up. The price only goes up when someone buys a token with fiat money.
Similarly, the fact that someone pays for using an app does not lower the price - the price is lowered only when tokens are sold for fiat money.
The price of Bitcoin hits 50k without being used for anything - the same is 100% possible for the Safe Token, because its price depends only on buying and selling. If people exchange the token immediately and no one holds it, it will have a low price in $. And if no one sells it, it will cost millions of dollars to have 1 safe…
Yes, I think that is understood. That is the only mechanism setting price directly. However, BTC is backed by “nothing” whereas SNT will be “backed” by the data, users, and services on the network. This should ultimately drive a much higher market cap in the long-term vs. any of today’s blockchain crypto.
That’s a good point. BTC in particular has a “reserve currency” status that does provide some backing, which is I think your point on the US dollar. It’s still all blockchain, though. Once blockchain is found obsolete then BTC’s special role (and premium) goes away.
I asked this elsewhere and didn’t get a reply, will blockchain actually become obsolete? Or will it have some purpose within a dominant and well functioning SAFE Network?
It would still be useful for a secure transaction history and smart contracts. Perhaps sometime down the line the Safe Network would develop features to make those uses obsolete as well, but blockchains will still be useful for the foreseeable future.
Blockchains have their place for transactional data. Maybe they are sometimes crude and inefficient, but bitcoin is doing a decent job of defining gold 2.0.
Proof of work does feel like a sledgehammer to crack a nut though. How much hashing power is ‘enough’ to be secure? Proof of stake is certainly asking that question too. Safe network will ask it again in a different way too.
There is no problem with having different technologies and approaches. Some may become more or less popular though.
I expect all the functions of Blockchain to be replicated on Safe without proof of work, and when that happens Blockchain will no longer be developed and while it may still exist, nobody familiar with Safe will try to build new things in it.
What will slow its demise is existing investment and inertia, monetary and psychological. Think fossil fuels. Even the imminent destruction of the biosphere hasn’t been enough to make them obsolete, and has lead to pushback in the form of propaganda, lobbying, bribery etc as we see from any business when it’s existence is threatened.
I think it will take years for safe network to prove it is as resistant to disruption as bitcoin / proof of work though.
Imo, smaller transactions will flourish on safe network, leaving bitcoin to be gold 2.0 initially. Maybe in a decade, safe network could be gold 3.0, along with cash 2.0 too! I think it will all take a long time to prove out either way.
Blockchain is, at its core, a data structure. A distributed one, but a data structure nonetheless. Just like lists, maps, sets, and others. These are just tools like any other hammer or screwdriver. So while the implementation and design may change over time, perhaps to the point of being unrecognizable at some point in the future, I don’t see its unique function (distributed, trustless, strict concensus on validity and ordering of events) to be usurped anytime too soon. Even certain aspects of Safe resemble block chain (e.g. data section chains, although those don’t rely on proof of work).
I would concede that proof of work, as an implementation of block chain, may go away one day along with BTC. But I doubt that’s anytime soon (although that’s speculation), considering the strength of inertia in tech (There are plenty examples of this. There are still systems in government running on COBOL, IPV4 is still floating around, etc.).
I think it will all take a long time to prove out either way.