Since I’ve started this blog I wrote about why one shouldn’t invest in either MAID or MaidSafe the company.
One factor that can help you decide – although if you need help to see the obvious, you’re probably at risk – is the incompetence of the average investor who did buy in. Like this MaidSafe community member.
Going back to the Safecoin vs equity debate, one thing that Nick said really stuck out: the Alpha network in its current form could be used to automate a standalone data centre. So, to play Cassandra again for a second and imagine a worst case scenario in which for whatever reason ensuring vault connectivity doesn’t work or the full version of the SAFE network doesn’t (clearly not what we want or expect), what’s the maximum downside to investing in shares? Given the current evaluation of around €37M and that operating costs for the current team are low, you’d have to think selling licenses for the Alpha network would itself generate more than €37M of profit in the relatively short time-frame.
This one data point gives me a lot of confidence that even in a worst case scenario the equity is probably significantly undervalued.
A lot could be said about this level of cluelessness, but I’ll address only the silliest parts:
- There is nothing – and I mean absolutely nothing – that SafeNet can “automate” in the data center. There’s even no way to access SafeNet data from the Internet. So what can it automate and for who? Nothing, for no one.
- What SafeNet can do is use a proprietary protocol to inefficiently distribute data. There’s zero chance any commercial customer would want to use this feature. It’s absolutely useless to them. They don’t want multiple copies (even two, let alone three or four) because it’s terribly expensive and consumes network and disk (and power, etc.) resources at a level that’s hundreds of percent higher than acceptable to any commercial user.
- The maximum downside in MaidSafe (the company) isn’t that the company would make some money from code and patent licensing, but that it ends up getting sued for screwing over the fools who “invested” in MAID.
Commercial users have no use for the current code and features of the SAFE network, even if they could use it for free.
The software (if they ever make it work) solves the following problems:
- Anonymous data sharing
- Data protection on unreliable commodity storage
- Edge caching of popular content
No significant commercial customer would ever put their or their customer data on the SAFE network because in addition to the ridiculously expensive (unless MAID (or Safecoin, in the future) crashes to a small fraction of its current price) cost of such storage, they would also have to pay various fees to MaidSafe (the company) if they wanted to protect their intellectual property.
An alternative is to pay MaidSafe for a license to run a private SAFE network (likely without a coin). But this is would be ridiculously expensive as explained above.
Another gem from the same user (in the same topic):
One thing I hadn’t realised, and if I’ve understood correctly, was that we won’t be actually buying equity in MaidSafe, but in aN SPV created by BTTF that will be investing in MaidSafe. Perhaps I’m being a little paranoid, but can anybody confirm that the SPV is a separate legal entity from BanktotheFuture? Just imagining a somewhat extreme scenario where if the SPV is actually consolidated on the balance sheet of BTTF and for whatever reason this company gets into financial difficulty, there won’t be some lien on the MaidSafe SPV.
With this approach, how are investor rights exercised? Quora has a bit on that here.
They receive notices, investor updates, and the like, unless they’ve waived that privilege, and basically sit on them under a duty of confidentiality, without further distributing them. Individual holders of the SPV, by contrast, have few if any rights of information or control.
Never mind! The same MAID fanboys who constantly bitch about the risk of using crypto-exchanges, regulated wallet providers, Windows OS and the Internet in general, are suddenly okay with the SPV approach which not only adds a counterparty risk to the equation but in all likelihood makes it significantly more difficult to exercise one’s shareholder rights.
Another foolish fantasy is that someone like Kim Dotcom would use SafeNet. Why in the world would they do that? Kim already stated the payments will be in Bitcoin and there are many reasons against paying the MaidSafe tax (one of which is the ridiculously high cost of 1 PUT (1 MB) which would equal the bloated price of 1 MAID). The MAID currently trades at USD 0.08 (8 cents). For the same amount of money you can store much more data on Amazon S3. If this sounds impossible, visit CoinMarketCap to check the price of MAID and the Amazon S3 pricing page and see how much it costs to store 1 MB on S3. There are some rare edge scenarios in which MaidSafe could come close (if it actually worked), but for all practical purposes it’s a no brainer to use S3 or similar storage.
Another not-so-bright comment by a top forum member posted earlier today can be found here:
How will SAFEnetwork handle DDoS attacks of such large proportions!!! …….. Oh wait, DDoS can’t exist on SAFE.
First, SAFE doesn’t even work (that is, it is totally DDoS-able because the vaults are few and run on Digital Ocean). Second, even when and if MaidSafe makes it possible to run vaults in a distributed fashion, SAFE network’s seed/bootstrap nodes will be few and have known, hard-coded hostnames or IP addresses. The claim about DDoS resistance is therefore completely bogus!
Then there are completely nonsensical projections such as this one by a clueless forum moderator.
So let’s say $20 million worth of Safecoin is Farmed in 2018. That way Maidsafe get’s $1 million worth of coins to be spend on development.
The minimum unit of MAID (and therefore Safecoin) consumption is 1 unit (that is, Safecoin by design isn’t divisible at this time) and currently 1 MAID can be bought for $0.08. With that the above assumption means that 250 million MAID would be mined in 2018 and that would make it possible to PUT (post) 250 million MB of data. That’s 250 TB. With the latest 10TB disks, that’s less than $20,000 worth of disks protected with RAID6. How on earth can this $20,000 worth of of disk drive space be sold for $2,000,000? It can’t. And what to say about the $1 trillion Safecoin or MaidSafe (the company) valuation estimates that fanboys posted on the community forum earlier this week?
As a side note, just look at this 30% crash in MAID exchange rate (vs. BTC) since the peak from the pre-funding craze.
Since MaidSafe kicked off the current fundraiser, MAID has lost close to 30% of its market cap (down to $37 million now). Think about that. They are unlikely to raise a single penny in this fundraiser, but they will have lost close to $0.5 million due to the ongoing MAID slide (they are still holding onto approximately 19 million of the counterfeit MAID with the current market value of $1.5 million).
Yes, something is wrong here and (as of now) the 135 MaidSafe backers probably aren’t smarter than the rest of us.
I think it’s safe to say they have no idea about investing, datacenters or cloud storage, so do not be fooled by the nonsense you read on the moderated community forum.