On this blog I’ve repeatedly stated that the biggest problem facing MaidSafe isn’t the network (even though they can’t seem to get anywhere close to completing it), but the coin.
First and foremost, because it’s damn difficult.
Second, as far as I can tell they’ve no cryptocurrency or economics experts, and the community is even more clueless.
While the current Safecoin design leaves a lot to be desired, I’ll mention just one, pretty laughable issue: it is not divisible. At launch (if they ever get there), there’s supposed to be around 400 million of them and if we express that in “satoshis”, that’s like 4.3 BTC.
Now if you look at the (meaningless) market cap of MAID (which is supposed to be converted to Safecoin when the latter becomes available), it’s close to 43 million dollars.
Think about it: 43 million for 4.3 BTC.
Now they may say “but eventually there will be 4 billion Safecoins and Safecoin is not divisible in the first place”. I don’t think Safecoin will ever be launched, but let’s say I’m wrong: at first there will be around 400 million Safecoins valued at the present 40 million dollars.
That means the minimum price for anything would be 10 cents. Do you see the problem now?
To make matters worse:
- “Anything” includes storage space, such as 1 MB. How do you fancy storing your data on a small P2P network at the price of 10 dollars per gigabyte?
- Various experts from the MaidSafe community forum claim MAID is “way undervalued”. In other words, they think the minimum price of anything in Safecoin should and will become even higher without impacting this coin’s “value”
So what do you think: how useful and valuable would Safecoin be?
This rather hopeless situation, however, certainly isn’t discouraging the more ambitious community members from coming up with their own solutions: one such idea can be seen right here.
Check this out:
Let’s have a series of denominations, following the powers of 2, each with a fixed supply of coins. With properly chosen parameters, this can result in a supply of coins and market cap that approximate real-life requirements.
Later in the comments someone asked what happens if somebody acquires all small denominations (since there would be no price difference between 1 Safecoin and 100 “Safecents”, but the supply of Safecents would be smaller).
Another funny idea that appeared is SAFE Wallet App and a custom meta-Safecoin called ThanksCoin. Here’s the gist of it:
An altcoin named ‘ThanksCoin‘ was defined as an unversioned StructuredData, which XorName is based on a random number.
Since I’m using the safe-js library, I don’t have access to the StructureData’s owner, previous owner, and tag type fields, thus this information is kept in the StructuredData’s data field.
After several weeks of development and now finally testing, the community discovered it’s not possible to transfer the coin from one SAFE Network account to another.
In prior testing testers created multiple wallets and were able to successfully transfer the coin between the wallets in the same SAFE network account because the wallet uses symmetric encryption.
I won’t bother to argue about other obvious issues here: this “wallet” application is basically a SAFE network equivalent of Bitcoin Core’s wallet.dat stored in TrueCrypt that lies on top of your filesystem. That means you can’t use it unless it’s running on your client, which also means that wallet data must be cached copied back-and-forth between your devices and the network. Then each time you transact (for example, receive 0.001 BTC), you need to save this wallet file back to the SAFE network and eventually you’d have to spend Safecoin to do that. What’s the point of doing that?
And consider this: if you have a deterministic wallet (in which you could keep all main coins), there’s no need to have your wallet file “saved” anywhere, but wherever you save it (your phone, laptop, USB key) it’s okay as long as it’s encrypted.
As it was later pointed out in a comment, MaidSafe has a plan to add ownership transfer support to structured data (which is a SAFE network data storage format this wallet uses), but these two examples illustrate the problem I mentioned earlier: the platform isn’t suitable for cryptocurrencies and the community is pretty clueless.
(There’s a also a third idea for a Safecoin meta-currency (more on that here) but you should get the picture by now.)
Safecoin has no divisibility (it should crash to next to nothing to be useful), no transaction costs (if it was cheap and useful, it’d bring the network down) and no globally shared ledger so nothing can be audited.
If these people had any clue, they would leave. Instead they’re trying to layer additional currencies on top of that mess.