What gives Safecoin value and differentiates it from altcoins?


#1

What Gives Safecoin Value?

Safecoin will be useful because:

  • people can use it to buy extra stuff (extra storage, premium services, premium apps)
  • people can earn it to pay for stuff
  • people can buy it from exchanges, set up to exchange it for fiat and vice versa
  • it will be attractive to people who need features bitcoin can’t support (very high transaction rate, very low transaction latency)
  • it will be attractive to users compared to other coin (including bitcoin) because the wallet is simple and built in (just look how hard it still is to figure out which bitcoin wallets to use for what, and how to avoid losing your whole stash - with Safecoin this is handled with a single FAQ)
  • in time merchants will want to offer it because so many people have it and are used to purchasing with it

All these things give people are reason to value Safecoin, and if it is reasonably stable (or they need to hold some for usage), an incentive to hold some quantity of it rather than cash it all in.

This is completely different to Mastercoin (and almost every other altcoin) because they have little or negligable utility in themselves. No reason to value, no reason to hold.

How Is Safecoin Valued?

While the number of users is increasing there is a virtuous circle: more and more Safecoin held in new wallets - because most users will be farmers by default - meaning that all users will tend to have at least a few Safecoin in their wallets until they cash out, at which point new Safecoin will slowly be redeposited through further farming. The ratio of Safecoin being saved (left in new wallets) versus the ratio being issued to farmers, will produce a value point.

So on the demand side for Safecoin, initially we have growth in new users (attracted by the massive free storage and other free apps) - even without services to buy, every new user is a potential farmer, who ends up with a few Safecoin lying in their wallet. The amount lying around in each wallet will tend to increase, as more services and apps that require Safecoin become available.

On the supply side, if the price goes up, farming becomes more lucrative, more people farm and more Safecoin is issued. This pushes the value down.

The volume of supply and demand both grow with the network, which tends to create an increasingly stable currency that grows in value over time. Value grows because it is linked to its usefulness (incentive to hold, which also increases over time), and the increasing number of users of the network (people wanting to hold it).

Over time the virtuous circle becomes stronger (volume increases) because the number of users is growing, and the incentive to hold Safecoin is growing due to the addition of premium apps and services, and later if adopted by merchants, for purchase of off-network goods and services.

Speculation will disrupt this of course, but there is a real value anchor here that helps dampen the impact of speculator trading.

How Does Safecoin Differ From Bitcoin?

David Irvine explains… “User Defined data” of a SafeCoin can hold a file/directory (no blockchain bloat issues cos SafeCoin confess with its own storage, accessible to everyone, free, all the time - nothing to pre-download as in bitcoin-QT).

SafeCoin can be used for anything, such as bets, shares, trades, smart contracts etc." ----> SAFE is bitcoin/Ethereum on steroids!
See my post and David’s reply here

Safecoin are held differently to immutable data chunks (to be documented):

“Coins are held as group data and maintained by that group, so not distributed like immutable chunks, but managed more like structured_data_versions.” ~ David Irvine (forum post)

Safecoin Differentiators

Safecoin is a secure decentralised currency secured by cryptography and a decentralised network, with similar characteristics, but wholly different technology

  • Secure (Safecoin is at least as secure as bitcoin. For example, the famous bitcoin “51% attack”, would require at least 75%, and even then have only limited vulnerability.)
  • Truly Anonymous (No blockchain - only anonymous ids are recorded, and only the current and immediately preceding owners ids are retained.)
  • Massively Scalable (Instant transactions regardless of transaction volume - no blockchain bottleneck.)
  • Accessible (Anyone with a computing device can obtain Safecoin simply by joining the network and farming by sharing bandwidth and disk space with the network, whereas this was only feasible with bitcoin during the early days and now a small number specialised “miners” earn almost all the bitcoin available. On SAFE network, farming capability will remain much more evenly distributed even as the network matures and farming rates decline. See @fergishpost).

These factors have very significant implications for the widespread adoption, application and longevity of Safecoin as opposed to other crypto currencies which are, in the case of bitcoin and other blockchain based currencies for example, severely hamstrung by deficiences in several of the above areas.


The Price of Safecoin & The Economics Behind It
The value of safecoin farmed
#2

Really good, clear, simple explanation, thanks Happybeing Each time I notice price going down and I’m out of trading position I’ll link to posts like this…Mwuh ha haa


#3

Let’s not post them yet - I have some low buy orders in :wink:


#4

Oh No, the slippery slope to trolldom…lol


#5

Future Crowdsales launched on the master protocol will be able to accept Maidsafecoins if they choose to, this gives another use for them and gives them more value, which may be why the price has gone up a little bit since this was announced:


#6

If you were doing a crowdsale on the Mastercoin protocol and you had the choice of bitcoin and or Maidsafecoin and or Mastercoin umm, let me see… I think you’d choose bitcoin. Well I would. Why would anyone want anything else?

I posted a response on the blog announcing that change, and it has not been published. Maybe they don’t work weekends :wink: or maybe they have no answer to the main point - how is Mastercoin going to acquire any value. You can read what I posted here on reddit.


#7

If you have a lot of Mastercoin or MaidSafecoin you wont be able to choose Bitcoin. Also if Bitcoin is going up you wont choose Bitcoin.

You would choose the most stable currency for that because why would you want to lose money from volatility? That being said MaidSafecoin is extremely volatile and Bitcoin is probably more valuable than any altcoin being offered for sale in the crowd sale at this time.


#8

A priority for any young company/organisation is liquidity. I would choose the most liquid currency possible.


#9

They might want to maximise the amount of funds raised, and so allow a small portion to be funded via metacoins/altcons (whatever Maidsafecoin is).


#10

I think we missed one of the HUGE aspects as to why safecoin is much more valuable than other altcoins… it is actually anonymous. There is no global ledger in the safe network that tracks transactions like with blockchain technology.
Safecoin is LITERALLY digital cash… each safecoin holds a current owner and previous owner and nothing more.

Safecoin is what darkcoin wants to be except there’s no global ledger making everything transparent. :wink:


#11

Like mastercoin? :wink: I’ll get my coat… :slight_smile:


#12

Safecoin isn’t cash because cash isn’t actually anonymous.
But whatever Safecoin is, it can have cash like properties.


#13

How do you figure? The $20 I have in my wallet doesn’t have a recorded history that I know of. I got it from a person who was buying something from me and who knows where they got it from. Am I not understanding anonymous?


#14

Maybe they’re thinking because of physical fingerprints? But even knowing that someone once owned a bill doesn’t mean you know the order of where they got it from/where it went to.

Cash is certainly anonymous and especially if you use gloves. :wink:


#15

Actually it does. Just because you don’t know about it doesn’t mean it doesn’t exist. What do you think those serial numbers are?


#16

Knowing someone owned it, which location it originated from, leaves a paper trail. The investigators can then follow the money trail from the last person who touched the dollar all the way back.

And if you’re uncooperative they could charge you with conspiracy or anything else they want.

So most of the time money can be traced. It’s expensive and you’re right if a person wears gloves and is extremely paranoid it’s harder but look at how counterfeiting rings get busted and you’ll see that it is possible to trace cash.

I think if it’s electronic it’s probably even more traceable than cash so I caution anyone who believes anything is untraceable. Harder to trace than Bitcoin and credit cards would be more accurate.


#17

The way I explain it to my fellow engineers is this:

Gold is to the US dollar as Safecoin is to Bitcoin.

Extremely short explanation:
Bitcoin, like the US dollar, is whatever value people think it is just as with any fiat currency. Safecoin is different in that it is backed by real physical resources, just like a currency on a gold standard.

Niall


#18

I’d have to say that that is only a kinda-sorta accurate analogy. The resource that backs bitcoin is analygous, though different in aspect, to safecoin. Setting aside that safecoin’s value is future, because it is yet to exist, its main values will its limited quantity and its functionality of speed, anonymity, seemless tie to the SAFE network, etc. The fact that it is also tied to resources such as storage is a tremendous anchor and a plus, but it’s not directly tied to those as far as its value goes. It should continuely take less and less safecoin or bitcoin to purchase many of those resources.

Bitcoin, on the other hand, has some of the same features as well as others that safecoin doesn’t. It is limited. It can be possessed and transferred only at the choice of the owner (barring theft or carelessness). It can be sent to anyone across boarders. These and some other features are similar in both. Bitcoin has the disadvantage in transaction volume, energy wasteful, etc., less anonymous natively, etc.

It’s disadvantages also reflect its advantages, though. The blockchain makes anonymity difficult, but also provides a public record which has tremendous values. Also, the fact that it is “wasteful” in energy, etc., means that a lot of investment is tied up in it and thus a lot of vested interest in seeing it continue and prosper.

There’s probably a lot more that could be said, but because of those things above, I’m more inclined to see it as the reverse of what you say: Bitcoin is the heavier, less liquid asset that will serve as a less liquid store of value, whereas safecoin will be the more mercurial grease that lubricates the high-speed interaction of daily commerce in ways that Bitcoin can’t.

Anyway, that’s just a different way of approaching the analogy. They’ll both be of great value in different and largely complimentary ways.

But really, the value of each is only dictated by what people think it’s worth.


#19

You know that the USD isn’t on a gold standard, right? The USD is only backed by threats of violence.


#20

Proof of war :smile: