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 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 @fergish’ post).
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.