The PUT price is balanced with the farming rewards. So the cost to put is balanced with supply, oversupply makes puts cheap and under-supply more expensive. On the other side farmers get less when oversupply and more when under-supply.
So it is the bad part is that it is very hard to estimate, the good part is that it is hard to estimate. (good luck to ben bernankie and co-horts this is gonna be different )
For me this is the missing link in crypto (and economics in general), how does the supply of the engine oil happen, as the engine is getting dry we need to create some (safecoin costs to store are high, this makes the farmers provide that oil) and when the oil reservoir is nearing capacity non of us want to buy oil and the price goes down (safecoin buys a ton of space when the supply is excessive).
It feels more true to a market than the manipulated versions we currently have with excessive variables when money is printed or produced without consideration of anything except an algorithm and stopwatch or similar.
I find this better than linear inflation, fixed supply derived from time (10 minute blocks etc. even 12 second blocks) or proof of stake etc. I think these can all suffer from the rich centralising. I doubt the rich will be the only suppliers of the worlds data (information and knowledge) and as we spread education though access to all info this naturally decentralises the supply/demand across the planet (hopefully).
Then people say we are tying data to currency, but we are not, we are tying supply rate to demand for data services (storage initially and hopefully computation later, by computation I mean being able to ask the network questions (see opencyc for some ideas on where this could go)). I find this interesting we tie knowledge to supply rate and as we crave knowledge then it gets better for farmers (more expensive), Knowledge base will always grow and the thirst is not being satisfied today, I hope to help change that. No more burning libraries and killing scientists, this time it will be different.
Sounds weird, OK now dive further. We pay once for data to be stored forever, so nobody does not have access to everything, but they start adding to the pool and as that happens we need more space (get the farmers rewarded for their good deeds. So information becomes our yardstick for supply balancing the ‘economy’ if you like. As we move forward we will add to this data in massive amounts (historically we do) but with better and cheaper storage, so this balances as well. Computation will become very important as time goes by and this will add to the model so not only silly websites, but information hubs so not search but question, question the network for qualified answers not search and sift and certainly not tailored to your buying habits search.
If we get this right then much of this will all start to play out and explaining it will get easier. @nicklambert is writing some up now, which is no easy task at all, but he is the man for this one. I have some much further reaching ideas and observations on much of this, but not enough time to explain it with anything like the detail it deserves. Soon, though soon.
This is another reason we work very hard on churn (smaller account transfers, faster routing messages), I want farmers to be all of us and at no extra costs other than the current computers we have, then we amortise this wealth and with it the knowledge base.