The (Crypto)World is not Enough: MaidSafe to raise money from self-proclaimed investment professionals

Nick Lambert yesterday announced their newest attempt at getting more money for the project. Some details can be found in this IBTimes article:

MaidSafe’s funding begins on 12th September and runs for 30 days. The target is £1.75m-£2m which will be received in sterling and bitcoin. Nick Lambert, chief operating officer, MaidSafe told IBTimes UK: “This is a raise for equity as opposed to a coin sale. It’s most certainly not crowdfunding.

Why would anyone want to buy equity in MaidSafe the company?

  1. There’s no product
  2. If they ever finish the network (read more on this blog on why that is unlikely to happen), the coin won’t work so forget about that side of their “business”
  3. The best case scenario is MaidSafe the company ends up providing a packaged solution for enterprise users.

MaidSafe’s development is supposedly focused on building a resilient, censorship-resistant P2P network, with multiple copies of data and proper handling of high drop-out and on-boarding rates. And to make everyone behave, there’s a layer of monetization (that they haven’t started working on yet, so good luck to MAID (the coin) investors).

The thing is: enterprise users don’t need any of those features, and MaidSafe the company can’t afford to develop anything else because they can’t finish their first product. Enterprise users’ needs for content distribution are already addressed with object storage and CDNs such as Akamai.

Incredibly, some MAID holders (see the announcement link at the very top of this post) see this as a positive development for Safecoin (by this I mean the SAFE network with Safecoin which would eventually make it possible to cash out; in earlier posts I said I don’t exclude the possibility of the SAFE network as poor man’s BitTorrent , but not with Safecoin).

What’s Really on Sale?

It’s unclear how much of MaidSafe the company is being sold and I don’t know where to find this information, but if it’s a minor stake it’s not worth it (why give them money and not have any say in how the company is run?), and if it’s a major stake then smart investors may ask the company to essentially give up on the silly Safecoin part of this sad story and by that I mean put 2 worst people on the SAFE Network and put the rest of the team on something that can actually be used by enterprise customers or licensed to 3rd parties.

Additionally, there are legal risks related to the various irregularities that have happened so far.

Let’s consider the value the SAFE network offers. Said Nick Lambert:

“Our belief at least is that you need to incentivise people to do this, because providing your resource to the network is not entirely free. Even if you have unused computing resource, you still need to pay for the electricity, and if you have got an internet cap where you live then you have got bandwidth considerations as well.

The cost of “free” is very important. That is why anyone who needs to get actual work done wouldn’t ever use such an inefficient approach. The SAFE network creates multiple replicas of each data chunk, which is hugely inefficient and costly in terms of both bandwidth and storage. Enterprise customers don’t care about government attacks, privacy, 3x data resilience, churn, and so on. It is SAFE to say that MaidSafe software in its current form doesn’t address any of their needs.

Even if the software was available for free, the TCO would be higher than Amazon S3 and similar alternatives.

This design makes sense only for consumers, today’s users of Vuze and similar software, but why would anyone pay for this when you can access https://popcorntime-online.io and similar services for free?

Whatever it is they’re going to sell next week, don’t buy.

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