I invested in Maidsafe’s crowdsale in early 2014.

Between then and now I have sold over 70% of my holdings.

Why have I sold over 70% of my holdings?

Well, partly for the gains. Prices have always been at least 8x more than purchase price. But, primarily I have sold for these reasons:

Economics

  • See this post.
  • GET requests are proposed to be free, despite the fact that a node incurs cost when responding to GETs.

Latency

Due to the outrageous number of hops needed to traverse the XOR address space when requesting and returning data, network latency will likely always be inferior to competing systems.

Yes, I understand caching plays a part here, at least for frequently requested chunks of data. What about infrequently requested chunks?

Number of hops and sybil resistance

Have a read of ‘On Bitcoin and Red Balloons

You didn’t read it did you? Lazy! Here is the main take-away:

This suggests that greater than three hops cannot be secured.
Yes, I understand that PARSEC along with disjoint sections (sharding) and node ageing are the proposed solutions to this. I am not yet convinced these measures will be adequate.

Law

The Safe Network is proposed to be fully anonymous. As a node operator there will be no way to know if you are storing and/or delivering illegal content on behalf of other users.

Do you think governments (and society) will tolerate this?

Governments could shut this down if they wanted to.

The first thing you should ask yourself is: how do you propose to get value in and out of the system? If running a node is deemed illegal and all on and off ramps have been killed, how do the economic incentives come into play?

Network updates & protocol governance

Over the years, I’ve had the displeasure of watching BTC be slowly crippled by the core developers. See video:

Not a popular opinion, but I believe BTC is way off path, severely limited and ultimately destined for complete failure.

Its limiting alterations wouldn’t have come to pass had there been resistance to arbitrarily tweaks of the protocol, and if there had been no realistic avenue to push these changes.

In order to remove the power to control the direction of a protocol, there needs to be a commitment that the protocol remains untouched.

Maidsafe the company is the gatekeeper of the Safe Network protocol, and will remain so into the future. They represent a single point of failure. How much power they will voluntarily relinquish in the future remains to be seen.

Socialist sentiment

It’s a shame to see that the proponents of the Safe Network are so philosophically aligned with the BTC mentality.

By this I mean having immense distrust in corporations and the notion that every user should run a node (or be able to).

I’ve seen discussions in the forum advocating penalising nodes that are earning above the average farm rate (responding to GET requests the fastest). Why should we want to penalise efficiency and competition?

Recent funding issues

David Irvine’s recent post on office closures, redundancies and funding issues.

Maidsafe have run out of money (they were holding their funds in crypto?!). They will keep operating with a much reduced work force.

Well, shit happens I guess. I’m happy they are able to refocus on engineering and have been able to discard superfluous spend such as marketing and communication with exchanges.

What actually concerns me is the ‘MaidSafeCoin Loan Scheme’

Maidsafe are doubling down and taking loans from the community (in their own token, which itself was a fundraising ICO in 2014).

Maidsafe comfortably raised the requested loan amount of 10,000,000 MaidSafeCoins from the community within 24 hours.

What you’ve just seen is a transfer of 10,000,000 MaidSafeCoins from die-hard believers (hodlers) to an entity that is committed to paying salaries in fiat.

Looks like a few more coins will be chewing into those buy walls chaps!

On top of this, the scheme looks rushed, informal and quite possibly illegal. Combine this with the heating up global crack down on ICOs and the fact that Maidsafe trail blazed the ICO space and things start to look a little sketchy.

David, please be careful out there. This is all fun and games for the rest of us, but you could be setting yourself up to have some legal issues. I hope you have given it thought.

Final thoughts

I have reduced my position considerably and I will continue to reduce my position.

I will hold a ‘Hail Mary’ position until Fleming is released, upon which time I will reassess.

Stay Safe out there.