Business Strategy

MaidSafe and Yuanbao Forge Asset Trading Partnership

It is our pleasure to announce that one of China’s largest asset exchanges, Yuanbao, will soon support the trading of MaidSafeCoin in China. This agreement follows on from MaidSafe developer, Qi Ma, recently introducing MaidSafeCoin and the SAFE Network to Yuanbao’s customers at a recent roadshow in Bejing.

Founded in 2013 and with 250,000 users, Yuanbao is one of China’s largest digital asset exchanges. With a peak trading volume of $100 million USD in a 24 hour period, the exchange facilitates the trading of 27 different currencies on the Yuanbao platform. Yuanbao is MaidSafe’s recommended partner for the Chinese market.

MaidSafe’s CEO, David Irvine, confirmed: “We are delighted to be partnering with a secure and reliable exchange, such as Yuanbao. The Chinese market is one that MaidSafe are particularly interested in supporting and this partnership is a great way to introduce MaidSafeCoin and the SAFE Network to a new and very important audience”.

Jelena Strelnikova, Foreign Cooperation Officer at Yuanbao added: “By opening trading on the Yuanbao Exchange MaidSafeCoin is introduced to the broad Chinese market and to the welcoming Chinese community. It is our pleasure to be part of MaidSafeCoin’s success, and we are looking forward for further strategic and fruitful cooperation with the MaidSafe team.”

MaidSafeCoin deposits and trading will be available from the 24th of June on https://www.yuanbao.com/. To transfer MaidSafeCoin, users should use the Omni Web Wallet, which is available at https://www.omniwallet.org.

MaidSafeCoin Announcement

As those of you who follow MaidSafe’s progress will know, 2016 has been a very productive year so far. Further to the successful test of the SAFE Client in February, and the iterative series of network tests that have taken place since, progress has been visible to all close to the project. Making a stable droplet network available for app developers last week is another positive step and provides a platform for developers to start coding apps against. To increase the speed of momentum in development, and to ramp up network promotion the company needs more resources, and we now turn our attention to our short term funding.

To enable us to grow SAFE as aggressively as possible the decision has been made to make best use of  the 24 million MaidSafeCoins that the MaidSafe Foundation currently holds. The Foundation has these MaidSafeCoins as a result of a technical issue with the Master Protocol (now Omni protocol) that resulted in an over issuance during the crowdsale. These coins are, and have been, calculated as part of the safecoin market capitalisation, though they have not been put into circulation. The existence of these MaidSafeCoins has been known about since the crowdsale, and what to do with them has been discussed amongst the broader community on the SAFE Network forum. Various proposals have been made, including sending them to a burn address and thus destroying them, using them to seed the network, and so forth. Until now it was unclear how to deal with the situation to best effect for the project and the community.

The Plan

  • The MaidSafe Foundation will advance these 24million coins to MaidSafe.
  • The sale of 19 million of these will be conducted sensitively over a period of time to minimise the impact on price.
  • MaidSafe will use the proceeds to further invest in the SAFE Network, drive community engagement and support developers.
  • 5,000,000 of these coins will go directly to bounties, community projects related to launch, PR, branding, marketing and outreach programs.
  • After safecoin goes live, MaidSafe will prioritise paying back the the 24 million safecoins from MaidSafe’s own core development awards. MaidSafe will be able to prove this cryptographically.
  • For the avoidance of any doubt, 100% of the proceeds from this strategic sale will go toward furthering SAFE and will be reinvested entirely straight back into the community.

Why is this Needed?

Those that have been involved with the SAFE Network since the days of the crowdsale will know that while the sale was very successful from a community-participation perspective, it was less so from a funding standpoint and didn’t give MaidSafe the necessary resources to fully accelerate development. The anticipated $8 million (£5.5m) and 3 years of running costs actually equated to $2 million (£1.4m) with the crash in the mastercoin price and fall in bitcoin price taken into account since that time. This information is available in Maidsafe company accounts as filed at Companies House in Edinburgh. Some of the dynamics of all this were chronicled at the time in an article by Adam B. Levine, entitled MaidSafe: A Wildly Successful Cryptocoin Debacle, which is recommended reading for anyone who wishes to get a balanced picture of what happened and why it was problematic.

While very careful financial management, through limiting expenditures and growth, has enabled the team to squeeze over 2 years from the funds, the lack of sufficient financing has restricted our ability to scale the team and consequently has extended the anticipated development timescales. This is an area we now hope to build quickly as we have developer job applications at an advanced stage and we feel the technology now needs to be accelerated. The recent tests allow us to begin creating a plethora of demo apps and increase API awareness for third party developers. We do anticipate spending time with developers in outreach programs and developer awareness events.  This is also the time to increase substantially marketing and PR activities.

With development progress now plain to see, we have been turning our attention to raising additional funding in recent months. We have explored and continue to proceed with a couple of avenues that include EU Research funding and both institutional (.i.e. venture capital) and crowd equity investment . While we do see the potential value of finding the right institutional partner who can also bring technology partners to the table, economic uncertainty is reaching the venture capital markets resulting in lower company valuations and slower deal cycles.

With all this taken into account we believe it makes better sense for the community as a whole for MaidSafe to use a funding source that is close at hand, and one that keeps MaidSafe completely independent, with the ability to freely negotiate with the correct partners as we progress the launch of the network.

Use and Repayment

The funds will be used to:

  • Accelerate the ongoing development of the network.
  • Support the development of third party applications.
  • Raise awareness of the network amongst potential end users.

MaidSafe will repay these coins directly by reducing our core development reward. In essence, MaidSafe are proposing an advance against the core developer reward, which will be used exclusively to further the network.       

Through hard work as well as prudent, public and conservative financial handling, and support of an incredible community, the SAFE Network’s functionality has been demonstrated through the public tests and we remain very excited about the potential of the technology. The funding raised by this solution will allow the fastest, most effective means of fully launching the network, while retaining full administration of the project in the hands of those who have proven their dedication to carry it through.

Thank you once again.

David Irvine

This and other topics were discussed on the SAFE Crossroads podcast hosted by John Ferguson. The podcast is available on Soundcloud. 

Rebrand safecoin, the digital currency of the decentralised network

MaidSafe are seeking talented designers to take part in a competition to design a logo for safecoin, the crypto currency of the SAFE Network. Potentially seen by millions, safecoin is the oil in the engine of the network, encouraging end users to provide their spare computing resource while incentivising developers to create great applications.

Safecoins will be used to access the network and use any of the services on it, such as messaging, VOIP, storage, exchange platforms, media streaming…etc…

Announced by Coin Telegraph, the competition went live today on design platform 99 Designs and in addition to the site prize, the winner will also receive 5000 safecoins, once the network is publicly launched later this year.

Safecoin differs from many other currencies as it does not use the block chain, instead running on the SAFE network transaction manager, which enables millions of transactions per second with transaction confirmations occurring at network speed (in seconds). On SAFE, the transactions are not chained, only retaining the existing and previous owner, and therefore providing each users with complete anonymity.

The winner will be chosen by both MaidSafe and the SAFE Network community members. MaidSafe will judge the opening round, reducing all entrants to a short list of no more than six. The SAFE community members will then judge the final round, picking the winner by voting on the community forum.

Using Tokens on the MaidSafe Network

Bitcoin is a hot topic these days. The crypto currencies ability to disrupt the status quo and its price volatility has attracted admirers and critics in equal measure. Bitcoin proposed and executed a very innovative idea, coupled with a well-considered system design based on the block-chain and proof-of-work concepts. In essence, Bitcoin is a decentralised digital currency on centralised network. In this article, I am going to propose a token based system on the MaidSafe network. In effect, a decentralised digital currency system on decentralised network.

Part I Proof Of Resource

Section I.1 Proof of work for Bitcoin

There are many thousands of articles that have explained what Bitcoin is and how it works and it is not my intention here to get too deep into specifics. However, I do want to explain and highlight some key points:

It is possible to obtain Bitcoin by a process called mining. Mining involves adding transaction records to a virtual currencies public ledger of past transactions and it is the mechanism used to introduce bitcoins into the system. Miners solve computationally difficult problems in order to allow Bitcoin nodes to reach a secure, tamper-resistant consensus about all the transactions that have taken place and miners are rewarded by the network in the shape of bitcoins.This proof, call it ‘Proof of Work’ is recognized by all the members of Bitcoin network. As the Bitcoin network has grown and become popular, people are willing to pay to acquire coins (which is actually the proof). This has led to exchange rates being established, assuring bitcoin of it’s digital currency status.

Section I.2 What is proof of resource?

To further expand the concept of Proof of Work, you can think about Proof of Resource as; validation that the specific amount of resource you have committed has been accepted by the community. The resource here can be anything, such as; man power, knowledge, CPU power, electric power…etc…

Take our monetary system for example, banknotes represent the certification (proof) you received payment for your resource (manpower, knowledge, food…etc…). Within BitCoin, the coin (which is a digital transaction to your account) is the proof of your computation work (mainly CPU power).

Section I.3 What features make a proof a currency?

Proof of Resource has two aspects, proof itself and the resource that proof refers to.

Proof of Resource has the potential to be a currency when the resource it references is of value. Everyone trusts banknotes as the resource it references is valued by the majority of people. The computation power fulfills this need in the Bitcoin network to validate transactions.The ‘guarantee of uniqueness’ is one of the features that enables that Proof of Resource to be considered a currency. Banknotes are backed by government and governments limit the amount of currency issued (printing too much causes inflation to occur). It is hard to produce fake banknotes and once they are spotted they will be removed immediately. The Bitcoin algorithm ensures there is a limit to the amount that can be issued, while the Bitcoin block chain makes it near impossible to fake transactions.

A further feature of currency is its acceptance from the public. When a government issues a banknote, it gains acceptance from that country’s people immediately. However, it takes time for legal tender to be accepted as a global currency as it has to gain acceptance from foreign governments. When bitcoin was first issued, not many people accepted it, so it was not considered to be legitimate at that time. Only after years of evolution, and ultimately acceptance, will it be considered a valid currency.

Part II The MaidSafe Network

Section II.1 The decentralised network

The Internet has been described using the 7-layer ISO model, a concept initially introduced years ago. The lower three layers are mainly hardware infrastructure. It is hierarchical and centralised, based on the masking of IP addresses and centralised ownership, describing the centralised Internet that we have today. Centralised architecture was implemented for many reasons, mainly because of the limitation of technology (especially average connection speed) at that time.

The MaidSafe network proposes an upper layer network solution, utilising a mathematically complete Public Key Infrastructure (PKI) authorisation, secured key-value storage and reliable Kademlia based routing. The network is designed to be decentralised and has the ability to get rid of Domain Name System (DNS), which is not part of the hardware infrastructure. The peer-to-peer routing layer can be embedded into hardware and easily updated, provided manufactures support it. Once that’s done, the Internet can be totally decentralised. However, this will involve a significant amount of reorganisation amongst corporations and governments.

The PKI solution deployed within the MaidSafe network, validates with mathematical certainty a users identity. Bitcoin uses the block-chain to secure the transaction, creating a validated proof of work. In the MaidSafe network, the account itself is self authorised, by combining key-chain verification with nearby group authorisation.

Section II.2 Generate proof of resource on the MaidSafe network

The MaidSafe network deploys a de-centralised key-value store mechanism. This mechanism is focused on data, managing the way it is stored. Any upper layer application can be counted as ‘data’ to network. Every functional node in the MaidSafe network is referred to as a vault. Each vault is provided by users and is responsible for the storage of data on the network. When users create an account, a vault is created, providing a commitment of resource to the network. At this point, the user claims that they can store X amount of data in their vault. However, it doesn’t become proof yet, as the claim cannot yet be verified.

In order to be validated, this vault needs to successfully store data to prove its resource. When the network is required to store chunks of data, it randomly picks a number of vaults in which to store it. When the vault claiming X amount of available space is chosen, the network asks a series of challenge questions. Correct answers enable the chunks to be successfully stored and the proof of resource validated, while the user account records how much space the network has used. It is interesting to note that the proof of resource is not only the committed disk space, the network also takes into account the users CPU power and bandwidth.

Section II.3 Advantages of MaidSafe network generated proof of resource

Regarding the ‘proof’ side, as MaidSafe network is designed as de-centralised, the authorization problem meanwhile keep anonymous on de-centralized network is already resolved. For the end-users, they can just think it as a traditional bank account (you have an account which is secure and unique. The account holds something what will be accepted by others and can be exchanged. Only you can access the account). This will be much easier for them to pick-up the concept as the similarity to normal life experience. (Bitcoin has to solve authorization problem, which is a barrier to end users to understand and trust the system.)

Regarding the ‘resource’ side, proof of resource on the MaidSafe network is mainly focused on storage space for data (call it proof of space if you like). As data can be anything, and used for any purpose, storage space is always desirable. The process for generating proof of resource is totally random and therefore could take an indeterminate length of time. It is not controlled by human beings but by the network using a pre-defined algorithm.

Part III Token on MaidSafe network

With the proof of resource being generated on the MaidSafe network, a token system can be setup relatively easily and there are many ways such a system can be implemented. Here, I will just illustrate one approach, serving as a demonstration of using MaidSafe proof of resource. To keep things simple you can think of this token system as a new digital currency, similar to Bitcoin. We can call it SpaceCoin (as this token system does use disk-space as main measurement).

Section III.1 SpaceCoin based on the MaidSafe network

On the MaidSafe network, a user’s MaidAccount will look like this:

maid_account(<pmid_account1(pmid_node1, claimed_space, stored_space), pmid_account1(pmid_node2, claimed_space, stored_space), …)

Bear in mind that as mentioned previously, the stored_space is a proof of resource generated by MaidSafe network. It has the key features of a digital currency system : approval (validation) by others, to be fairly distributed and no trace bundled to proof itself. With these attributes in place SpaceCoin can be easily introduced into the MaidSafe network.

Imagine there is another field called SpaceCoin in MaidAccount. By using MaidAccount, the tokens immediately become anonymous, requiring no central authorisation, while still retaining the many security features provided by the network. The SpaceCoinAccount will look like this:

spacecoin_account(available_coins, coins_can_receive)

There are two parameters: available_coins (coins the user has) and coins_can_receive (coins the user can receive). A user can credit their available_coins by either providing storage space, or by purchasing coins from others.

Furthermore, coins_can_receive is calculated based on the sum of stored_space across all pmid_accounts that a user holds (a user can have more than one account), multiplied by a global factor (which can be fixed or fetched dynamically from the network). The algorithm that generates the global factor will ensure the token system is immune from inflation. Bitcoin manages this problem by reducing the speed at which new coins are released (or mined); halving the number generated every four years and spacecoin could adopt similar logic.

In essence, available_coins reflects how many coins users own from their previous work, while coins_can_receive relates to how many coins users can obtain in future, based on current proof of resource.

Section III.2 Transactions for Different Scenario

1. Mining

Mining is a relatively simple concept to introduce into a MaidSafe network token scheme, as the stored_space already carried out the mining part. When claimed space is randomly picked by the network to store data, the spacecoin_account gets credited. When mining bitcoin, miners run hardware hoping that their computer solves the hashing algorithm which subsequently earns them coins. Similarly, when mining spacecoin, users will hope that their available storage space will be randomly picked by the network to store data, enabling spacecoins to be earned.

2. Ranking

SpaceCoin can also provide an additional feature that other digital currency can’t, that is, ranking the reputation of the user automatically. When a MaidAccount’s pmid_node gets de-ranked or marked down (through undesireable behavior), it will be reflected in the pmid_account’s stored space. This allows SpaceCoin to update coins_can_receive. This can be seen as some kind of ranking in that higher coins_can_receive value indicates a more stable and reliable commitment to the network. Furthermore, this reputation can only be gained over time, similar to a personal credit score, for example.

3, Exchanging

When user A wants to give some coins to user B, the network check against user B : coins_can_receive > (available_coins + coins_to_sent)

If user B can receive coins, the transaction is agreed and available_coins of A is deducted, while B’s account is credited. If user B cannot receive coins, the network rejects the transaction.

The transaction can become immediately valid by using MaidAccount, as authorization is already completed. This avoids the delay that Bitcoin users currently experience with the block chain, where it takes the Bitcoin network 60 minutes to confirm transactions. In addition, the MaidSafe network provides a further advantage of not leaving any trace of any transactions, ensuring user identities cannot be traced.

Section III.3 Pre-mining of Spacecoin?

Pre-mining is a term used to describe a process where a virtual currency is mined prior to public launch. Typically this is cause for concern as the portion that the initial stakeholders reserve for themselves is open to abuse and potentially reduces the reward for future participants.

Bitcoin had a very limited pre-mining stage with only 50 coins for the original seed. This low number ensured that pre-mining was never really an issue for the Bitcoin community. Interestingly, getting into mining early on is advantageous as the odds of solving the computational problems is initially very high, becoming less so as the difficulty of the problems increase and the number of miners grows.

Other proposed token systems have suggested a fixed portion share model where, for example, 10% is set aside for the original developers and investors. This encourages development and investment to speed the deployment of the currency. However, it raises similar concerns to those raised during a pre-mining process.

SpaceCoin intends to follow the model of BitCoin with a strategy that benefits both early developers and investors: provide seed storage space to form a seed network. This seed storage space can be awarded to early developers for their commits or to investors for their funding.

Owning The Network

As MaidSafe emerge from stealth mode and start to tell the world about our technology and its implications, we have observed comments from people with concerns about MaidSafe’s ‘ownership’ of the network.  An apprehension that one company will own, and therefore control, all data and communication.

These are absolutely logical and valid concerns. Internet users have seen all to often, companies that become too powerful, who try to exert control wherever possible and whose desire for profit eclipses the rights of their users.  We believe, as is the case with the Internet today, that the MaidSafe network cannot be owned or controlled by anyone.  It has never been our intention to do so.

MaidSafe is a network that has no central authority.  It is completely anonymous, secure and repels human intervention of any kind.  This is a network that has decentralisation at its core, it is inherent in the design that it cannot be controlled or ‘owned’.  It’s free and the property of the people forever.  Furthermore, MaidSafe are Open Source with all our code available under GPL3.  This means that we don’t own it, it is there for everyone to use (and always will be) and can be forked independently from MaidSafe.

However, this does not mean that MaidSafe is anti-profit.  Great products don’t exist without great people and investment backed companies.  Or, put another way, products/organisations have to provide services that others could commercialise in order to become mainstream, we have seen this with Bitcoin and Linux.

Our code is protected by a revenue clause that allows non-GPL codebases to be created completely at the behest of the developer, with only a very small 1% (of revenue) fee without any additional charges, such as developer programs or API keys.  The revenue generated here enables MaidSafe to maintain and improve the network for the vast majority of free users, while also repaying our brilliant and patient shareholders.

While on the subject of our shareholders, our founder gave his entire (80%) shareholding away to 2 entities, a block of shares for staff (30%) with the remainder (50% for those who weren’t paying attention!) being used to start a foundation for education and innovation.  A registered charity called the MaidSafe Foundation.  Both these entities will only receive funds via share dividends.

Now, going back to our 1% revenue charge, we believe that this is small enough that it encourages the businesses, entrepreneurs and innovators of the future, with much lower barriers to entry than they experience within today’s server centric architecture.  Compare our offering with the Apple app store, which takes 30% of the developers income while charging a yearly up front developer program fee.

MaidSafe will also not judge any developers app, banning those that either compete or don’t meet some quality standard.  We take a simpler approach, we let market forces decide.  If an app is of poor quality it will not be used.

We are confident that this approach will entice developers and companies to work with us.  Both the GPL and our Commercial license provides developers with the comfort of patent protection for their products.  The fact that we are Open Source will also encourage collaboration through transparency as developers can check the source code for themselves.

We leave you with a quote from author Bryant McGill who captures our sentiments nicely:

“There can never be any real freedom on earth as long as people try to exert ownership over the resources of the world.”

Openness

At MaidSafe our code is completely Open Source. We don’t do it for brownie points or box-ticking. We do it to give everyone the freedom to access our code, freely and without any restrictions, therefor allowing innovation to thrive.

At MaidSafe we realise without any understanding of how it has been developed and without the ability to see every commit, how can we expect the dev community to fully understand our code.

Imagine, instead of taking part in a lecture with complicated whiteboard drawings throughout, we just gave you the final drawing; a mass of lines and shapes and scrawlings of text.  How would you be expected to decipher this and understand where the lecturer was coming from?

We strongly believe that the community should not just obtain access to our code; but should be actively encouraged to view its development, getting involved along the way.

At MaidSafe, openness is something that we truly embrace. We take pride in being an open company and believe in Open Development; giving users and developers the freedom and flexibility to contribute to and modify any of our products. We want to create a collaborative environment where anyone can obtain access to our code from the beginning and fully understand it as it is being developed.

Not content with having Open Source Software and Open Development, we then decided we should have ‘Open Business’. Our weekly staff briefing sessions are now recorded and uploaded to YouTube. This is an uncut, behind the scenes insight into the company and how we operate. We believe in total honestly, giving you everything… our code, our commits, our knowledge, our thoughts.  Anyone who wishes can see us discussing and making decisions that will allow us to turn our vision into reality and let people understand how we arrive at our decisions (rightly or wrongly) and watch as we discuss the weekly ongoings within the company. This means, that as with our code, people observe not just our achievements but also our mistakes and more importantly, see us acknowledge these diversions and take action to remedy them.

In time we hope to have people following these meetings and getting involved in video chats which we can stream on YouTube. This would enable others to get involved as deeply as they wish. We welcome suggestions, ideas or different points of view that may help us achieve our vision. Becoming so involved with the very people who will be using our products allows us to tune in to what the world is asking for… not just what we assume it needs.

Written by Justine McLevy

Legal Compliance

During the 3 years I have been involved with MaidSafe, the question of whether the government will shut the company has been discussed more than once. This may seem paranoid at first glance, however, for a company determined to ensure privacy, security and freedom for all at the expense of those who like to listen in it doesn’t seem that far fetched, particularly in light of recent events.

With companies such as encrypted email provider Lavabit closing their doors, closely followed by legal news website Groklaw, it’s worth asking the question; are companies that prioritise their users privacy and security going to face closure at the hands of the government?

In uncertain times like these it’s easy to get carried away, but what is the legal position?

In the UK, where MaidSafe is based, the government does close companies, but not for protecting their users. Businesses are shut over repeated failure to file accounts, think TweetDeck, or for making false advertising claims, as seen within the injury compensation industry. In fact, companies operating within the UK are legally obligated to protect the rights of their users. The UK Data Protection Act (1998) was enacted to bring UK law into line with the EU Data Protection Act of 1995. This legislation requires Member States to protect people’s fundamental rights and freedoms and in particular their right to privacy with regard to the processing of personal data.

In the US, where most of the large technology companies are based, it’s less clear. There seems to be no evidence that the government will close companies who closely guard user privacy, in fact the opposite seems to be true, they may try to recruit them. The infamous Foreign Intelligence Surveillance (FISA) Court warrants that companies assist in state sponsored surveillance programs. It has been reported that individuals within companies who don’t comply are pressurised or even threatened.

In contrast with Europe, which has a blanket regulatory system, the US has a patchwork quilt of legislation that is designed to protect citizens personal information. However, as pointed out by encryption communication experts Silent Circle in their excellent blog post:

“…the Communications Assistance for Law Enforcement Act, makes it clear that communications service providers can deliver products to their customers that use encryption to protect their communications without having the ability to decrypt those communications”.

Interestingly and despite how counter-intuitive it may seem, rather than attracting adverse attention from the Government, Silent Circle actually count 9 world Governments as clients.

They have also received no Law Enforcement requests for user information. They believe the reason for this is due to their policy of minimum data retention, they store as little information as possible about their customers.

So it would seem that, legally at least, the UK and US governments do not and cannot shut companies for protecting their customers privacy, in fact firms are obligated to protect it. Governments on both sides of the Atlantic need to overcome the conflict that exists between providing users with the basic freedoms that many fought so hard to achieve and mass state sponsored surveillance dressed up as protecting national security.

As George Orwell (1984) wrote; “Freedom is the freedom to say that two plus two make four. If that is granted, all else follows.”

Written by Nick Lambert