What gives Safecoin value and differentiates it from altcoins?


#24

That is a great reply. An even better reply would be to point out that bitcoin’s value is backed by the blockchain, so the blockchain is the “gold standard” behind a bitcoin.

I did mean it as a very short explanation for technical types to get an instant handle on the difference in 30 seconds, and I meant it in terms of explaining the mechanism rather than actual practice or reality. Normal people or investors have very different viewpoints, just as most normal people get upset at the idea of cash not having a fixed value over time.

And of course, as I just proved by contradicting myself, my explanation isn’t particularly accurate either :smile:

Niall


#25

The US dollar broke from the gold standard under Nixon yes, but the gold standard was merely a range of exchange rates between the dollar and gold deemed as acceptable - or, to put it another way, it was guaranteed that tax payers money had to be spent to prop up the value if the exchange rate deviated from that range. Nixon gambled that the markets i.e. the world’s creditor nations wouldn’t mind lending their savings to Americans for longer than he could be in office, so he could skip spending taxpayer’s money. On that he was proved correct. With the need to spend taxpayer’s money on the gold standard removed (and needing to keep a float to hedge volatility), that allowed Reagan to cut taxes below the replacement rate at which they have since stayed except for a very brief spell under Clinton. This is why infrastructure which the private sector won’t fund (schools, roads etc) in the US crumbles, and it’s the only Western (and increasingly any developing) country to do this.

The US military infrastructure is actually social welfare in disguise - look at where the expenditure goes, and almost all of it is on social programmes of one kind or other - all those fancy weapon systems are really subsidies to the mid west middle class professions if you break down where the spending goes. The US actually spends slightly more than an average Continental European country on welfare when you include the military welfare component. This is of course horribly inefficient, and has huge bias in its outcomes, and is highly regressive and has created the worst child poverty anywhere in the OECD including Mexico, but each society chooses its weird pathologies. What always surprises me and most economists is why more people in the US don’t talk about them being more socialist in spending practice than most European nations.

Regarding the USD being backed by threats of violence, I think this nothing as important as the convenience of use. USD is accepted everywhere in the world, even more so than gold. Currencies can be anything - if you think about it, gold is a stupid choice as it’s heavy and rare, and large chunks of Africa used seashells for centuries with no ill effect. All you need is convenience of use and enough people buying into a set of rules governing usage.

Oh, and it helps hugely if it’s easy to collect taxes on it. Fiat currency lets governments tax you the rate of inflation without needing tax collectors. No wonder it was so eagerly accepted.

(If you want sources on all the above, look up a book called “Economists and the Powerful”. Disclaimer: I cowrote it in 2012)

Niall


#26

Or you buy with Bitcoin and replenish. Seems to be the common practice.


#27

I’m very much enjoying your input Niall :slight_smile:


#28

Thanks! I have a dual track career, one in software and another in economics (I have two undergrad degrees). My economics is considered very radical by even the critics of the profession, too much to be allowed to teach anywhere. So back to software I am currently at, I’m sure I’ll swing back to Economics at some future point, especially if SAFE takes off and then suddenly the Economics profession will want to listen to me, though probably not to what I’ll want to talk about :smile: .

Niall


#29

Sounds fascinating - have you posted an intro yet? If not I hope you will, and I look forward to your radical economics ideas. Its not something I know a lot about but it is something I track and comment on (regardless of my ignorance) because it is so pervasive. Its nice to just relax on my boat too tho! :slight_smile: See you around!


#30

No intro as I am not employed by Maidsafe, rather I am hired help. This isn’t probably the right forum for radical economics believe it or not. I’m more interested in successfully launching a new software platform which really adds something to information technology, something Europeans tend to be really poor at compared to the Americans.

Maidsafe have done things unusually right at a technical, process and funding level even by the best of Silicon Valley standards. If they were actually in Silicon Valley they’d be the fashion du jour with everything that brings with it, but I suspect that being outside and European will actually be a long term advantage - Silicon Valley is going to collapse soon, and with that the pendulum will swing back to European tech as it always has done.

Niall


#31

Fair enough, though intros are nothing to do with employment or affiliations, just voluntary sharing at introduce yourself Also there is an off-topic category where anything goes.

I wonder if you said any of that to those senior Googlers? :wink:


#32

Ah I see. Well, writing one of those intros is time consuming, and I don’t have many hours left in the day after work and family. I’m also really only here as part of my Maidsafe duties - don’t get me wrong, I am interested in the topics here, but they aren’t as high on my priority list as other topics and you only have so many hours in the day.

Regarding the forthcoming Silicon Valley collapse, I don’t believe any of the senior engineers from any of tech multinationals at the conference think it isn’t coming soon. After all, they’re the ones getting pelted with rotten fruit each day. There are mitigation plans ready to go for when it happens, I know Google at least has detailed scenario plans for a dozen or so eventualities. They enacted one of those when the recent downturn came and successfully didn’t lose capacity as most of their competitors did which is one of the reasons they are doing so well now. The only strategy hiccup I’m aware of at Google was one resulting in them cancelling all contractors, so Google no longer hires contractors for core dev work.

Niall


#33

Economic systems are descriptions of how people interact with each other and this is documented and accounted using a time of transaction and an amount. This amount is abstract in nature and could have been seashells or tulips. Today we’ve established a vast internetwork which is built on silicon and copper, of course other materials, though it is genuinely humbling to realize that despite all of this technological advance that is being claimed, the bottom line is that we Humans are the technological anomaly and the fact that we can count electrical signals and derive some information from them as they traverse the conductive surfaces which the society has laid out is simply One facet of our ingenuity and desire to be creative and to marvel at our creations.
This environment which we’ve produced overcomes the boundaries that mountains once formed for transactions to occur and therefore, we can achieve consensus in real time from all participants. This fact proves that each person is within some reach to populate their vote, or their validation to anything on the planet today should a sufficient network exist for the consensual consideration.
Through the use of algorithm We achieve total equity. Sound computations set the rate of allocation to the Network’s participants and therefore, the process of accumulating wealth becomes free to start, and also rewards quality, and only a innovative participant or wasteful user would ever have a need to accumulate exorbitant sums of interactive units; unless they are altruists and are hoarding only to distribute freely a later time, in the form of outright donation, or sponsoring a developer for the network. This is amazing because the sponsor will net be rewarded for sponsoring quality content and applications for the Network.

					On average it costs 25 dollars to host a website and there are approximate 861 million websites existing on the internet today. This means that if SafeCoins were to receive an initial valuation to host the whole internet today would require the use of the recycling of a SafeCoin or also dividing it to its lower decimals. 
					
					25dollars * 12months * 3years = 900USD - the cost to host a medium traffic website for 3 years
					900USD per website for the 3 year period would sum to 774,900,000,000USD to host each of the 861 million websites for 3 years.
					774,900,000,000USD divided by 452,000,000 SafeCoins the number of SafeCoins currently circulating results in a valuation of 1714.380530973451USD per SafeCoin
					
					It is obviously incredibly expensive to host the network, taking into account the MASSIVE infrastructure that had been generated in order to sustain and expand the internet as we know it today. The calculations above will demonstrate quite soundly the value that owning a piece of Network resources entails.
					
					The SafeCoin supply is to expand 8 times more out to 4.3 billion coins. Additionally, the cycling algorithms and destruction and recreation of the SafeCoins will allow for a broader range of participation and an intense automated commerce to take place on a continuous basis and this is the way to reduce the actual cost of utilizing the internet. Using this system the price of a SafeCoin is allowed to be stable while the network increases its capacity on continuous basis. This is amazing because it will literally freeze the additional sunken costs of participating in Network Internetwork economic models.
					
					Solving this through the use of sophisticated algorithms will achieve true economic neutrality and allow those who choose to participate in the paradigm to prosper in such a way that All on a global level will be capable of independently generating a value that is useful to the population of the planet by and large. Those who are participants in the progression of economic neutrality strive towards achieving control of their own Human as opposed to simply submitting one's self to the development of another person. The strongest example is communism where each person is born and must fulfil some kind of role no matter how small. This is absurd because perhaps some genius or some very thorogh worker will be inhibited by the fact that there isn't any suitable work for this individual. Through the SAFE Network one can achieve absolute independence from any foreign body. One can exist as a genuine sovereign entity.

How much do you value your (Maid)SafeCoin?
Safecoin Market Cap Potential
Is MaidSafe then end for copyright laws?
#34

$25 a month for web hosting to high, I think maidsafe will also have a much lower average than this.


#35

$25.00 is current prices of course SAFE Network will make this price point most reasonable.


#36

I’m a newbie to the MaidSafe forum and I’d like to pose a question that seems not to have been fully addressed in any of the posts on “what-gives-safecoin-value-and-differentiates-it-from-altcoins/411/34”. First some background:

We’re living in most unusual times, nothing is normal: not the economy, not the financial system, not the financial markets and not the political system. Financial crises in USA, Europe and elsewhere have already spilled over into the wider global community and threaten to intensify. Many are questioning whether the economic model of the Western World may be irreparably broken. Governments and central banks seem to be unable to reverse or mitigate the imminent advance of a global financial contagion, and some are accused of aiding and abetting the problem. The drums of WW III are increasingly audible and governments’ propaganda machines are running hot.

So against that backdrop we ask ‘what gives SafeCoin value and differentiates it from altcoins’?

The simple answer is that SafeCoin is: i) intended to be a restricted issue and that ultimately will introduce the concept of scarcity which will drive the value up; and ii) backed by a proven resource – that of computing facilities of the entire network; and iii) it runs on a truly decentralised anonymised network that has many appealing attributes.

The MaidSafe facility is not intended to incorporate an exchange for SafeCoin, fiat or altcoins and neither it should, but in the world of commerce there is a need for such and I assume that as soon as SafeCoin pushes into view on the ‘radar’ independently operated exchanges will appear as they have in Bitcoin’s case.

Now here is the fatal trap! Lurking in the shadows of these ‘independently’ run exchanges will be a mix of the ‘silk road’ traders and gun-runners to give the whole MaidSafe facility a bad name (don’t forget you’re also prodding the NSA hornets’ nest with a short stick). But worst of all, entrenched in these independent exchanges will also be the market makers and creators of ‘flash crashes’ led and funded by the US Fed and their Wall Street and London hedge funds and bullion bank vassals with derivative leveraged manipulation of SafeCoin up or down and each way taking a handsome arbitrage for their algorithmic dark pool trades. Under these circumstances I think it matters not whether SafeCoin is backed by a proved resource, hot air or the perfume of a tulip. As soon as it seems to have traction it will be controlled by the central banks of the world in an effort to maintain the present status quo.

And that is exactly what is happening NOW with regard to global market for gold and precious metals, key commodities, government bonds and currencies in a desperate effort by the Fed to maintain its exorbitant privilege as the reserve currency of the world. Brazil, Russia, India, China and South Africa (BRICS) are now well advanced in establishing a parallel IMF and World Bank and that will be enraging Washington. But it’s also important to remember that In 2009 Zhou Xiaochuan Governor of the People’s Bank of China warned against dual use of a national currency as a reserve currency for global trade citing the Triffin Dilemma principle.

WWIII is presently being desperately fought over currencies and trade and sooner or later there will be a “black swan” event that will trigger the greatest sell off (dump) of the major fiat currencies of the world, starting with the US dollar. But this time there is no safe haven to which the savings of the people can flee.

I see that our challenge and responsibility is to provide that safe haven and that will require either a rework of the SafeCoin or an alternative such as the TelelinkGlobal negotiable trade credit (NTC).


The Price of Safecoin & The Economics Behind It
#37

The value of SafeCoin is different from alt coins and fiat in that it directly denominates computational power and storage space digital stuff; and let’s you use the whole network. There isn’t anything else that allows for that. Plus transmission is not blockchain based -> faster, safer, stronger.


#38

I think current pricing for decent hosting is lower than this. Well, I know it is as I provide it! My price is £39.95/year which is currently $65/year or $6/month. I won’t post a link as I think that’s bound to be a breach of our yet to be written guidelines (at least I would advocate it was) so PM if you want me to back it up with a reference.


Https://safenetforum.org/guidelines *these were here since the beginning, before I was*
#39

Yes, I am basing this on the cost of a VPS to run your website; though it might not be the best measure. I wrote this portion while theorizing possibly why I would buy MaidSafeCoin for 0.02 USD using the ole’ risk reward analysis stuff; and then I started reading a little bit more and realized we’re dealing with something different than just buying stock in a company.

And so others still see things through the usual way, so I wrote this as it covers a valid theory of possible fiat denomination for something that does not really need to be denominated in fiat.

Though it’s easy to revise; instead of 1700 per coin, we’re at

25/6 = 4.17 times less
so
407 and at in usd value stored on the network if prices were constant and the entire internets’ webpage were stored on the safe network.


#40

Well a VPS is a different thing, not really a website, but something on which you can run a website.

It would be good to create a few benchmark comparisson points with SAFE, such as:

  • standard hosting service for a static website
  • similar for CMS/DB based website apps (non-VPS)
  • VPS based …?
  • CDN style extras for bandwidth, DDoS protection etc.

Also for different scales (storage, bandwidth etc.).


#41

We’ll be doing plenty of such tests, by We I mean all who choose to participate in the test nets, and We’ll be able to submit our findings and discuss and come up with the best rigs.
Best meaning the most efficient. So we don’t waste each others’ monies, the earth’s fossil fuels, and so that we can maximize usefulness.
MaidSafe a massive massive supercomputing network. Supernode Net!
Though exchanging for computation resources like you say is going to be available.

The website hosting stuff was just my first myopic glance at the value of the network, and thus my view has evolved substantially as I’ve accessed more of what MaidSafe Technology actually is, and what it is used for; so a revision to that post I made some months ago is certainly due.


#42

This topic is now closed. New replies are no longer allowed but feel free to update the OP of this FAQ.

Please continue discussions on this overlapping thread:

The Price of Safecoin & The Economics Behind It


#43

I just added a section to the OP explaining the features of Safecoin and how they differ from bitcoin.