Safecoin, why it’s safe and what it means for us all

Secure Access For Everyone coin

Is a coin that is generated and protected by the SAFE network and stays on the SAFE network (It of course can be copied as it is data, but off-network copies are of no value as a coin). Wallets will actually ask the network what their balance is and allow transactions to happen. The network can confirm and exchange coin ownership via a digitally signed authority from the coins last owner. This operation is ‘network atomic’ which basically means the network will make sure all copies update to show the transaction. This is a different approach to the ‘blockchain’ mechanism employed by bitcoin. The SAFE network allows many millions of transactions per second and the larger the network the more transactions per second can be executed.

Safecoin only holds the last and current owner. It does this to make sure the current owner has signed authority from the last owner to take ownership. This allows coins to be transferred between people very easily and without delay.  Safecoins use a proof of resource to create coins and this is a system that is waste free, so the proof is that a node or application is providing immediate value to society.

Currency or resource payment?

The answer is both, it is a currency and payment! Safecoin will perform in society as cash,  whether people call it currency, store of wealth or all the associated pigeonholing that is happening with bitcoin, it does not matter. Consider safecoin as cash, instantly transferable, secure and anonymous, except between the parties in the exchange. In this way safecoin is a transfer of wealth. It will be used inside project SAFE to pay for resources and enable many more features over time such as cpu sharing, bandwidth sharing and much more. Safecoin will be used external to this network as a currency.

Within project SAFE there is another hidden currency that will not be enabled initially and hopefully will never be. This is a proof of resource token. This token will prove a node has provided a resource and can be sold to another entity to use that resource. This is not now considered a need as long as there are enough incentives to offer resources for everyone. This is a fallback method if a ‘crisis of commons’ situation were to occur. I feel that is unlikely and I will give you one reason why.

I spoke to a Skype and Kazaa senior person recently. This person had been through these very interesting projects and noted something. Both Kazaa (like Bittorrent in vision) and Skype required people provided resources to the network. In terms of Kazaa, people has to continually give access to public files and in Skype’s case the super nodes has to be kept up and running. In both cases people did this and with no financial incentive. A worry for Skype as why would people do this and incredibly it completely dispels the ‘crisis of commons’ theory, people loved the networks and services like free calls, so they happily provided resources. I really like this as it’s working proof that the crisis of commons in many cases is an interesting theory that in practice may prove incorrect. I believe there are only very small amounts of people really greedy and a lesser amount that wish to do damage.  You can see greed and vandalism, you cannot see the negative of these, perhaps we hypothesis too much about how bad people are, based on false measurements and the human yearning that our knowledge is best. We do create our own paradox sometimes. In any case bad behaviour will be detected and acted upon rather easily as time goes by.

This means the SAFE network will launch and allow everyone to become part of the system free of charge. The farmers will provide resources and the builders will provide the tools to manage our data.  If there was a need to force payment then the proof of resource token could be easily introduced or an access cost of a safecoin may be introduced in several ways. This is unlikely though as rapid network adoption will be faster if its free and more nodes joining will provide more resources very quickly.  If safecoin were required to join these would be recycled for farmers and builders to earn, in this case a wider adoption of the network would be better for everyone prior to that event.

safecoin launch fundamentals

  • finite amount of 2^32  (4.3 billion)
  • Each coin may be later subdivided into a further 2^32 parts if required
  • crowd sale of 10% of safecoin (429,496,729)
  • safecoin website explaining crowd sale
  • safecoin initial value set via this sale and in initial trading
  • funds raised will be used to create remote development teams (essentially MaidSafe competitors for core improvements), fund MaidSafe for 3 years and provide accommodation (office space etc.) via the MaidSafe Foundation
  • funds will also allow the network to be seeded via many very small nodes that will not farm much, but will provide valuable routing information. Initial farmers will benefit from a stronger network to begin with.

This may seem strange that as a company MaidSafe raise funds to create competitors, but it is incredibly important. Open Source does not mean shared knowledge as can be seen in many projects. The core protocols used in project SAFE should and must be developed by a great many teams who can all develop and understand the code base. In this way the proposition is stronger and the network should be more powerful. More eyes do make better systems, but complex projects need many minds working in unison and co-operating and debating continually.

Farming for coins

Imagine if we incentivise people to give resources and do so financially as well as ethically!

Every desktop PC user who downloads and runs a project SAFE application ‘should’ automatically be running a farmer. These farmers will offer unused resources to the network. The network will pay for this resource via safecoins. The user then has free applications, free access and receives a financial reward for doing so.

Many users will install farmers to simply help the system, others may install farmers to earn revenue. Both of these cases are good. Almost all users will install farmers automatically and may not even know they are providing services, until their wallet shows revenue. This is also terrific.

As the network improves efficiencies, then it is likely all devices will farm as well as use resources. This will become the ultimate mechanism in the future in terms of self sustaining the network. This is likely to be a few years in the future, possibly around a decade.

Building for coins

As I alluded to in a recent post this is perhaps one of the most exciting things about safecoin and project SAFE. As Application Developers (Builders) provide the resources to produce and consume data then they are also rewarded. The rate of reward is smaller than the farmers, but the fact it is there is amazing. There will be many millions, perhaps hundreds of millions of farmers, but there will be a lot less Builders. This is a simple matter of fact, however the network requires both, humanity requires both and therefore both are rewarded.

I intend to put up a public share with many open source programs for people to use and I hope this becomes very popular. Instead of me putting in my wallet address I will actually create a wallet for each software project. As these are used and rewards come in I will be contacting each project and let them know to create a wallet so I can transfer the funds to them and transfer the wallet I have set up for them.  Of course they will want me to replace this wallet address with one they create. I will be delighted when that happens. Then we will reward all the efforts of these projects and increase the popularity of this project SAFE by doing the right thing. Imagine Apache, Boost, OpenSSL etc. all receiving cash to help their project, whether to pay for test machines or pay developers and contributors.

Cash is dangerous though, isn’t it?

Prior to the 80’s a huge proportion of the workforce had no bank accounts. So how did they operate? Well cash is how they got paid and how they paid bills. Then along came the finance industry, driven by a human greed to get something for nothing. It was good for the normal person who could use automation to pay bills, so it seemed great. We all then were paid in numbers and the cash was centralised. This centralised cash created enormous institutions who using fractional reserve mechanisms made the numbers bigger and lent them back to us.  This was the start of the financial goliath we now have.

Then came regulators and regulations, to protect it all. As the industry created even more complex number manipulations (derivatives, futures, bonds, triple A securities etc.) the regulators played catch up. The system became parasitic and dangerous, with huge amounts of people earning a living manipulating numbers. Many numbers like the Libor rates were actually lies and people made fortunes from telling lies. This is indicative of a broken system.

This change in society is reminiscent of the server-based Internet, pre project SAFE. As we centralised our cash, the organisations were not only able to just manipulate numbers for wealth they actually started to manipulate society. With all the regulations and regulators and laws etc. these institutions have, lent money badly, funded terrorism, laundered money for drug cartels (all of this is public record and factual, it is not a story) on a scale unimaginable.

If we go back to cash and the pre intense greed era, then we did not have this corruption on such a massive scale. People earned their cash and lived on that cash. There was corruption, but local and limited. Sam from the corner could not crash the world economy and prevent innovation while funding terrorism on a global scale. We needed a whole new economy for that and that is the regulated financial industry.

So now imagine a new cash, simple, electronic and vastly distributed among us all. Cash with the ability to buy goods across the world instantly, or pay at the local shop with the same ease. Imagine this cash with zero transaction costs no matter what amount.

Corruption and crime

One of the most important elements about the Internet so far has been the chasing down and reporting of corruption. This is of course hampered by Internet spying etc. We know project SAFE will make sure everyone can be a whistleblower with complete safety now.

So safecoin is a digital asset on a network that ensures whistleblowing is completely safe and more importantly simple. This is a network of equals and these people can police themselves to a great extent. A person could report a crime be investigated without fear of being exposed. This is how natural systems work and how humanity must work. We can allow people worldwide to uncover corruption and harm to others on project SAFE.

So now we have very convenient digital cash and more than that, it is on a network that will find and expose corruption, stopping it dead in its tracks. This is how we regulate money and how money is used, not by creating complex financial instruments and playing a board game with humanity, but by fast, simple and effective rules on a system where all society is in control of themselves.

Is it only safecoin?

Safecoin is a cryptographically secured digital asset. This sounds like a small issue, but in fact it is far from a small thing. One thing bitcoin was able to do was to find ways around the Byzantine Generals problem. This same problem is solved in the SAFE network. Unlike bitcoin though this is not a ledger type single piece of information copied multiple times for safety. This is a fully decentralised approach. This has several advantages.

Many of the bitcoin technologies rely on adding to the blockchain and using it as proof of something or evidence of an event. These things in SAFE are non transferable digital assets. There can be billions of these systems at very little cost, certainly not bloat. This gets interesting now. We can have transferable assets and non transferable assets. So we can have auditable events locked in the network and transactions locked in the network with ‘network atomicity’. This means that with some clever work by app developers we can emulate almost every system imaginable, including contracts and laws etc. Add this to the capabilities of SAFE already and we can see what the future holds!

Creation of assets

Safecoin is farmed, this means farmers get safecoin for looking after data. In a similar way Builders get safecoin for supplying tools to manage and manipulate data (producer and consumer devices).  A coin type structure is a special type of digital asset. These require a mechanism to allow creation of the asset, otherwise anyone could create coins and become rich (well they would not become rich they would simply destroy the eco-system).  After creation then these coins are network types and can be handled with several very small and concise rules, all of which are cryptographically secured.

A safecoin is only able to be created under certain circumstances. It is a little complex and requires some knowledge of vaults basically though it happens like this:

A person Gets data from the network. This happens via the MaidManager group through the DataManager group and eventually to the PmidManager group.  The storing node (that is giving the data) takes the address of the data, the message ID and the address of it’s close nodes (the PmidManagers). It then hashes all of these into a mining request. The mining request is sent to the network to store a coin. If there is space in the safecoin address space (2^32) then the storing nodes there (Transaction Managers) can check the hash is correct. They can check the address of the requestors close group and the messageid of the Get request (this is intact and comes from the MaidManagers of the requesting node).  This means there is a lot of checking a request is valid and is still valid (if any nodes change the request is dropped as a failure).

mining request == Hash(messageid + Get Request message + coin owner (pmid Node) + pmid Managers + Data Managers of the requested chunk)

This happens every X Get attempts and this X is calculated by an algorithm that slows or speeds up mining requests based on network data stored and free space available. A hack attempt would be computationally infeasible and require an attack group possibly larger than the networks size (something like network_size*3 + 17%). So a safecoin mine attempt is a secure PUT of a transferable digital asset. These rules can be applied in similar systems, but is possibly only required here. A very similar approach allows Builders to receive rewards, but at a reduced rate of X.

Other assets merely need to be signed contracts and can be stored as such, either as digitally signed documents or in specialised systems similar to the types an Ethereum like script may create. The possibilities are very wide and varied.

Enthusiastic human :-)

Posted in bitcoin, MaidSafe, Personal Opinion, safecoin
34 comments on “Safecoin, why it’s safe and what it means for us all
  1. I’m not even mad that Scotland beat Croatia in the middle of Zagreb anymore…

    Thanks for doing this article, it’s a little bit clearer now.

    I agree with your decision on having POR tokens only as a last stand but I’m also convinced that we will never even be close to the point that we need them. The network is going to be very health because of the incredible incentives that the SAFE network has.

    I was also wondering what do you think would be the issuance time-frame?

    For Bitcoin we know it’s decreasing by half every 3-4 years so is there an underlying rule for Safecoins or is it completely dependent on the free space/data stored ratio?

    • David Irvine says:

      Good point Bob, this is an area I think we will need to control. It would be nice for this to take at least 10 years to issue. It is very dependent on how popular the network is though and if it is too popular then we may need to slow it down, or perhaps speed it up.

      I prefer algorithmic mechanisms, but if the currency takes off then the balance needs to be handled. I think this can be achieved via the community though rather than guessing. As the mining is filling up a hashmap (almost) it will get exponentially harder to mine, which in itself may just be good enough.

      Sorry for long comment, bottom line is make this guess and measure. I would have no problem speeding up or slowing down the process if the community agree and we agree we have a good voting mechanism to do that.

      • The only thing that worries me is that if the Safecoin issuance is completely algorithmic then the farmers have a huge incentive to game the system.

        For instance they would stuff the network with data to get as much Safecoins as possible.. They would do that by increasing the point of entry high enough so that smaller miners don’t get any profit.

        Something similar is already is happening in Bitcoin minning where most of the miners are deliberately losing money 80% of the time to raise the barrier for small fish because they know that for the rest of the 20% of time their earnings multiple will be off the charts.

        I’m sure this will have to be a big point of discussion in the future but I’m also sure you guys will resolve it

      • David Irvine says:

        The design won’t allow this Bob, the data gets distributed evenly and the best farmers will stand the best chance. Large cpu etc, will not help. I think we will see a very distributed farming mechanism in place here. OF course large server farms may set up farmers, but it will cost them to do that. Normal consumers will use their PC that they already have, so will have no cost (hopefully).

        IF we can get some home NAS boxes switched over and maybe some set top box installs then it gets even better for people. I would love to see 4.3 billion people with a single coin each, that’s the target. We will never get there but should make sure we always aim for that.

  2. Armando says:

    What happens in this scenario?:
    (1) All the safecoins are mined.
    (2) I need 100x more resources than I can provide myself and there isn’t enough resources available on the maidsafe network.

    What incentive does a farmer have to provide me such large resources if there are no more safecoins to earn? Since maidsafe is free to use, what prevents one dominant user from gobbling up the available resources to say, mine bitcoins?

    And in general, could I use maidsafe to mine other cryptocoins like litecoins for free even if there are plenty of safecoins for farmers to earn? That would seem to negate the waste savings provided by maidsafe. Who would want to support someone else’s mining efforts?

    • David Irvine says:

      We discussed these issues for a long time on the dev list. safecoins will always be farmed. Initially the cap is 4.3Billion, it is not likely to increase, but that is not impossible in ten years or so. The community will decide to perhaps increase supply by the population growth or similar (1.5-2%). I cannot call that one.

      More likely is the recycling of safecoin for many reasons, people use these to access core services as an example. There will be many opportunities when safecoin is very widely used for these kinds of issues. If safecoin was not widely used then people would buy them, pay to access the system with them and farmers are selling them.

      There will be some bad behaviour, we know that. We feel it will be small, but importantly detectable. This is something all decentralised systems (even in nature) have to handle. So far we have made all attacks we can find more costly to perform than what they would pay. It’s a pretty complex area, but a really interesting and thought provoking one. If you like puzzles you would love working in those parts for sure.

  3. Armando says:

    Thanks for the quick response David. It’s appreciated. I found some good meat to digest on the maidsafe.net blog that will help clarify how all of this will work. You and your team are doing a great thing here. Congrats for pursuing such an awesome endeavor. Just the ideas in and of themselves are revolutionary.

  4. John F. says:

    Thank you, David.

    I’m very engaged and excited about this project, regardless of potential profitability for safecoin.

    That said, I must admit that your answer about the expected creation curve of safecoin makes me edgy. I would really like a bit more background on the factors that dictate the creation curve and mechanisms that control it, both regarding the existing software dynamics and the mechanisms for working the levers of control into the future.

    One factor about Bitcoin that is appealing to (I think) most people, is that the creation curve is embeded in the software, and those that can really read the code can verify it. I had assumed that there was something very similar in the Maidsafe structure, but your comment above makes it seem a bit loosey-goosey, especially about the Idea of possibly allowing more than 4.3 billion to be created (as opposed to allowing subdivision).

    Is this not nailed down?

    • David Irvine says:

      Hi, my fault. Like bitcoin this is an algorithm. What I meant was this may be changed (like bitcoin could in 30 years) if the community decided to allow that. safecoin can be subdivided all the way to 2^32 if required so again similar. I was (badly) making the point that this is all algorithmic and if we improve the algorithm over time then great. We need to bear in mind MaidSafe cannot make that decision on launch, it is the community choice.
      After bitcoin mining is complete the premise is transaction fees will keep miners up and running. I am not sure this will be the case, however with safecoin there are no transaction fees. The tx fee model is one I did not like. The SAFE community may decide to introduce those, recycle safecoin, increase amount via inflation etc. I do not think we need to solve this immediately as I do not believe bitcoin has. I do think the options are very wide to provide many solutions. I do not think we should do something and say this will still be the best way in 10 or 20 years.

      I hope that explains it better. Thanks fro the comment though, good to know what concerns.

      • John F. says:

        Thanks. That really clarifies a lot.

        I have no doubt that this is history in the making. I really admire your efforts and your vision.

        The only other question that came up on thisfor me is whether, as time goes on, there will be an up-to-date, accurate figure available as to how many safecoin have been created, so that things such as market cap can be considered.

      • David Irvine says:

        Yes I believe this will be something that can be easily discovered, It is a matter of traversing 2^32 addresses though. It’s certainly possible for sure.

      • Mirelo says:

        David,

        I have a proposal to solve this problem (the absence of transaction fees when all safecoins have already been issued). It is based on a solution I proposed to blockchain-based cryptocurrencies in this article: http://bitcoinmagazine.com/12296/transaction-rights/. The proposal is this:

        1. Each node validating and propagating transactions is rewarded with transaction rights according to the volume of transactions it made possible.

        2. Nodes lacking transaction rights can buy the those rights from the nodes with excess transaction rights. Only then there are any transaction fees, which are merely the price of transaction rights.

        In this model, as proposed in my article, which price people pay for which volume of transaction rights indicates how much the transaction-right reward should surpass the volume of transactions made possible by the rewarded node.

      • Mirelo says:

        David,

        I have a proposal to solve this problem (the absence of transaction fees when all safecoins have already been issued). It is based on a solution I proposed to blockchain-based cryptocurrencies in this article: http://bitcoinmagazine.com/12296/transaction-rights/. The proposal is this:

        1. Each node validating and propagating transactions is rewarded with transaction rights according to the volume of transactions it made possible.

        2. Nodes lacking transaction rights can buy those rights from the nodes with excess transaction rights. Only then there are any transaction fees, which are merely the price of transaction rights.

        In this model, as proposed in my article, which price people pay for which volume of transaction rights indicates how much the transaction-right reward should surpass the volume of transactions made possible by the rewarded node.

  5. John F. says:

    Thanks. That would be a good service, even if done only every week or so. I can see that that would be something that can be dealt with later, though.

    If I were savy enough, I’d dig into the code and figure these things out. But a lot of us who want to be early adopters are so far from that, though, that we’re required to pester YOU to get the bigger picture.

    What you’re doing is new and strange . . . and wonderful. Thanks again.

  6. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” […]

  7. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” from […]

  8. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” […]

  9. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” […]

  10. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” […]

  11. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” […]

  12. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” […]

  13. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” […]

  14. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” from […]

  15. […] Metaquestions essay: https://metaquestions.me/2014/04/12/safecoin-why-its-safe-and-what-it-means-for-us-all/ […]

  16. […] Metaquestions essay: https://metaquestions.me/2014/04/12/safecoin-why-its-safe-and-what-it-means-for-us-all/ […]

  17. Mathew says:

    Hi david,

    Do you think safecoin will be used for day to day transactions outside the network? For instance buying a cup of coffee. Also bitcoin has the problem of taking 10min to confirm a transaction, what transaction speeds does safecoin have?

  18. […] Once safecoins value on the network is established, the value of the transaction mechanism within the network (the SAFE network’s version of the block chain) can be seen. Capable of processing millions of transactions per second and able to confirm transactions at network speed, the SAFE network utilises an unchained ledger. This means that only the previous and current owners of each coin are known and in this respect safecoin can be thought of as digital cash. Instantly redeemable, secure and with greater anonymity and because the safecoin transfer mechanism is also full distributed, like any other piece of data on the network, there are no scaling issues or block chain bloat. David wrote about this earlier:https://metaquestions.me/2014/04/12/safecoin-why-its-safe-and-what-it-means-for-us-all/ […]

  19. […] See Safecoin (a type of “AppCoin”), Safecoin, why it’s safe and what it means for us all and MaidSafe Prepares for Safecoin Crowd-Sale to Facilitate “Decentralized Internet” […]

  20. Tyler Jordan says:

    Hi David, I’ve been following MaidSafe for a few months now. I’m curious about the idea of recycling coins and in thinking about that, I’ve realized a more fundamental question – how is it that people can buy resources from farmers in the first place? Is there a marketplace built into the network? How is this achieved? Or is this going to left up to people to invent and build atop the network later?

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