The right focuses for the future of the grid

[scott]

I wanted to respond to a some concerns that Drew (@ParkerS) has raised in our chats, but do it here on the forum where the discussion won’t get lost. So, what’s in question? Let me do my best to summarize:

1. Implementing a feature to power down idle nodes is the wrong focus, and a short term solution. Instead, we should be focusing on driving utilization so there aren’t so many idle nodes.

2. Rewarding farmers for utilization on their nodes is a reactionary measure towards a low token price. Again, the focus should instead be on attracting utilization, to create demand for TFT and raise its value.

3. The token is a burden to the project. We’d be better off not associating with crypto in general.

Wake on LAN

Getting the grid to 100% utilization is neither feasible nor desirable. We’ll want to maintain a buffer that will no doubt include some entire machines in standby. The power saving feature ensures that we’re able to continue growing the grid in the most efficient way possible, whether utilization is 1% or 80%. Reducing costs for farmers has benefit, whether their electricity is cheap or expensive, and whether the token price is high or low.

There’s just no reason to have servers powered on while idle, and making this change now assures that we can build the future of the grid around the architectural shifts it necessitates.

Utilization payouts

Most farmers are surprised to learn that they don’t get paid when their node gets used. In fact, in v2 tokenomics, farmers received virtually all of the TFT paid by users of the grid. The flip side was that farming rewards for proof of capacity were time limited and ran out when all TFT were eventually minted.

For v3, the system has changed so that farming can continue in perpetuity, assuming of course that enough TFT are burned by grid utilization. Originally, farmers didn’t earn anything extra due to utilization, but instead were able to have their farmed TFT unlocked once a utilization threshold was met. This systems was designed particularly so TFT could be eligible for a “utility token” designation that we’ve since stopped pursuing.

Since we also never implemented the locking mechanism for farmed TFT, we have an inverted situation for incentives. Farmers want users buying TFT to run workloads, but ideally not on their own nodes, since nodes under load consume more electricity. While I applaud all of the farmers who have taken it upon themselves to provide high quality hardware and network connections, I think the long term viability of the grid depends on properly aligned incentives.

For many months, I’ve been struggling with tough questions like, how much bandwidth does a farmer need per CU and SU? Or, what’s an appropriate minimum CPU benchmark for nodes to receive full farming rewards? It finally hit me one day that these are precisely the kinds of questions that markets are really good at answering. I’m no stranger to critiques of capitalism, but attempting to make decisions in planned economics has brightened my appreciation for that “invisible hand”.

So, my theory is that by allowing market forces to be felt by the farmer, without taking the controversial step of locking up farming rewards, we can do a lot to increase the fitness of the grid and also give farmers a reason to encourage people to use their nodes. While this certainly has a stronger effect while the market price of the token is below the DAO set entry price for farmers, I still think it’s relevant when the prices are equal. Giving farmers 1/4 of the total utilization cost can still boost their earnings by 50% in dollar terms, when entry price and market price are equal.

Bear market blues

It’s true that the grid could operate without a token. We could use an existing cryptocurrency or stable coin for the payments. That said, I don’t think this project can accomplish its most audacious goals while relying on legacy payment rails like bank accounts and credit cards. Too many people lack access to this financial infrastructure, and it comes along with too many issues like gatekeepers and extractive taxation.

Crypto is having a rough time right now, but for people with hyperinflationary local currencies and no bank account, being able to self custody crypto and USD stable coins is still a potentially life changing fact. Likewise, managing payments in an independent and peer to peer manner on the grid is one of the core pieces that makes the tech we’re building at ThreeFold so powerful. Crypto is digital money that humans can own for themselves, but it’s also money that machines like our 3Nodes can use and independently verify without needing access to proprietary APIs.

Beyond payments, TFT also gives us the ability to issue credits redeemable against the capacity present in the grid. Without this ability, we either need to raise cash to pay farmers now, or only pay farmers from incoming money used to pay for deployments. Personally, I think the coolest thing about crypto is the power it gives groups of people to experiment with new economic models and ways of imagining money. Being in the shadow of crypto can certainly hurt sometimes, but we have the opportunity to come out on the other side as one example that stands the test of time.

Finally, I’ll point out that much of our community has a crypto background and crypto too is largely about building a better internet, in its brightest manifestation. Many of the individuals and projects who are most motivated to launch deployments have at least one foot in the crypto world. I’m personally excited to build more bridges there and hope we can harness more of the energy that comes with the next bull cycle.

Driving demand

I’ve written a lot here about why I think some decisions in our strategic direction make sense. I want to also close by saying that, yes, I think bringing utilization to the grid is important, as is increasing demand for the token. However, grid utilization is not the only, or even the fastest way to create demand for TFT.

ThreeFold was founded by veterans of the cloud industry, and I believed them when I heard them say that growing cloud businesses is a slow affair. It’s a game of incrementally building a recurring revenue stream in a very competitive market. That said, demand for cloud capacity is growing rapidly, and we are well poised to meet that demand in a way that incumbent providers simply can’t scale. It’ll happen.

In the meantime, we are also pursuing the internet of internets strategy, to seed new autonomous grids that will allow the ThreeFold concept to expand beyond the limits of a single network. These new internets require a lot of TFT to kick start, and we actually expect this to be the biggest driver of demand for TFT in the near future.

[Mik]

Interesting post with many great insights @scott!

The bulk of what I get from this is:

1. WOL, wake on lan, will help to reduce energy, electricity and cost for the TF Grid. This is good in any kind of situation, good or bad market, with many or few grid utilization. Farmers can decide whether or not they want to use WOL.

2. Having TFT compensation for a farmer when their 3nodes are being used on the TF Grid can incite farmers to seek high-quality hardware. This gives an additional incentive for farmers to have their farms attractive to the market. It also helps to cover the additional electricity cost that utilization requires. Also, by the “market” thinking, demand will in a way guide the choices for parameters such as hardware, bandwidth, CPU benchmark, etc.

3. Crypto has many advantages compared to fiat when it comes to building and expanding the TF Grid.
   3.1 Per Scott’s words: “managing payments in an independent and peer to peer manner on the grid is one of the core pieces that makes the tech we’re building at ThreeFold so powerful. Crypto is digital money that humans can own for themselves, but it’s also money that machines like our 3Nodes can use and independently verify without needing access to proprietary APIs.”
   3.2 “TFT also gives us the ability to issue credits redeemable against the capacity present in the grid”

4. Driving demand for TFT happens in many ways.
   4.1 First, we have the vision that cloud businesses take time to grow, but also we have the Threefold advantage that our cloud business can expand exponentially thanks to its decentralized nature.
   4.2 The Internet of internets will require a great quantity of TFT and this will drive demand in itself.
   4.3 Developing ways to monetize weblets can attrack developers, and their output (weblets) can attract users.

---

I think many of Threefold’s big projects are game changer, such as the Internet of internets and the Digital Twin.

I also think that having farming rewards for grid utilization and developing ways to monetize weblets can help the Threefold Grid to grow organically while also improving the offer/demand balance. Those two points incite farmers and developers to grow and build high-quality projects on the TF Grid.

[ParkerS]

You are pretty spot in except my intent with point 3, I don’t think we should change the structure of the project to remove crypto, but focus on my growing our image in a way that separates us from the crypto reputation and general overall crypto enviroment. Loss of all crypto would break a lot of things related to contracts and such, didn’t mean we should necessarily abandon the coin so much as make our mission, vision, values and technology our brand, and the coin be a foot note about how it all works.

I will write up a better representation of my thoughts in the the coming days, but importantly, it should bed noted aswell, I support Wol as a worthwhile feature, my thoughts were never to not have Wol, I have hesitancy to think now is the time for it if it pulled devs away from projects that has potential to grow the grid economies, for instance, could we have had the mastadon deployable before that first interest wave lost its initial momentum

[FLnelson]

Seconded.

I too still feel the sting of that guy on Mastadon calling us a shitcoin shiller and then blocking our instance.

[randynho]

That mastadon guy was really tough to read.

Sooner or later an easy to use fiat pay method for VMs might help.
At the moment it is a bit confusing, someone has to pay different TFT amounts depending on the fiat exchange costs for TFT.
If I rent a vserver on any hoster I pay my fixed amount in euros every month.

[ParkerS]

       In continuation of bringing the discussion from Telegram here I wanted to fully explain my thoughts on what scott quoted above and also a big picture view of how I, Just as a farmer, think that we can accomplish all of our shared goals of seeing the grid and all of us as users and farmers thrive. ultimately this will be my contribution to Thursdays call as I will unfortunately be at work and were in the middle of a flu outbreak :(,

      On wake on lan, I love the concept of Wake of Lan, and I do think it should be a important feature and im glad its sounding like its nearly complete. The message I want to convey is not necessarily about the feature specifically but where we are focusing our efforts, WOL will reduce operating cost for farmers, which is definitely a problem right now, that is true, but, I do not feel that it is the solution to our current coin price and that it we will likely not see a reduced sell pressure after its release. This is because the coin price we are seeing right now is exactly what we should expect. the tokenomics are such that the price of token is directly linked to the use of the grid, Our token is a digital representation of a unit of compute, networking or storage on the grid, and when there is a massive supply of those resources available for purchase without a demand for their services the “vouchers” for those services are going to become less valuable. While this has led us into an unfortunate situation combined with electricity cost, inflation and the crypto winter, none of those things are ultimately responsible for the current price of the coin, We as a community and as a project are. our project has a INCREDIBLE amount of technology readily available for use today, but we have not got it in front of the right customers. WOL is an amazing band-aid, but were still putting a band-aid on a gun-shot wound and we cannot afford to lose focus on fixing the primary problems.

      Now, I am not a CEO or A Tech Developer, so take my assessment as you will, But I think we are massively overcomplicating the problem and failing to utilize our most efficient avenues due to a mis represented sub set of problems. In the big picture most farmers are not currently voicing frustration with running the cost of their nodes, this sounds wrong, because of what were looking at that’s directly in front us and not the overall picture. The farmers that are currently voicing frustration’s are not a majority, but what they are, are most of the farmers who are present in the telegram and on the forums working to contribute to the grid in a much deeper fashion. these are people with at time 100s of nodes that are making up the spine of our grid, some of them are building software for the grid, some of them are helping other farmers expand and learn. some of them, are driving the engineers nuts by breaking things constantly and punching holes in their grid (me). But we have some problems that are simply embarassing and are low hanging fruit that are dragging us down and being ignored, regardless of what new technologies we add on to the grid atop these problems they will continue to prevent us being able to create a healthy coin price supported naturally by the eco system.

• We do not have a technology problem

  • The people who are active and present have created a robust, helpful community, that is dedicated to the dream of creating a new internet. This community at the time of this writing has created a network Computers with 2,893 bare metal devices in 63 countries, Those devices have full access to the internet, and are able to freely communicate between each other in a fully encrypted, decentralized, fast communication network you can choose under what laws and in what countries your traffic is exposed to the internet if at all. This network has the ability to provide storage on that network with encryption capable defeating a quantum super computer. The technology is not the problem, we have a product that no one else has or can readily replicate. did you know that Polaroid invented the digital camera nearly 10 years before the product was brought to market successfully by a different competitor, They were unwilling to change with the times and choose not to focus on the new technologies because they could do better with their older technology. They went bankrupt. What makes our situation worse is that we are far ahead of the curve in developing and releasing this technology, and were simply not utilizing the incredible products that we have and placing our focus on attracting the right audiences to the grid that will provide the natural growth our eco system is designed to thrive on.

    • An example of this in practice, is the way that we interact with users in our Telegram and when providing support, quite frankly its sub par and I will provide the following exchange as an example
      
      

    this was a new user, that came to us with an idea for a tool that could be deployed on the grid, while a community call was in progress and theoretically, we would have quite a few hands on deck, WE CANT LET THIS HAPPEN! this person likely has experience running btcpay servers, how they integrate, how they could benefit us, this one interaction could bring an entire business organization, to the grid. it took me 30 seconds to google what this was, and clairify what this peson was asking, no reply came so after awhile, I spend another 30 seconds, and clicked how to deploy, saw it was deployable in the 18.04 image, and was able to provide this individual with the solution to his problems. I never heard back. Did we follow-up on if this persons concerns were adddressed? doubtful. We failed, now lets fix it.

• The Solution is a Human Solution

  • We have a habit of answering peoples questions with “that would be great, but we cant help” and that is not okay. Yes, people have to be willing to build ontop of the grid, but we have to be there to attract, support, enable and encourage them to do so. This is where my frustration came with WOL, we have one extremly finitie and valuable resource, and thats the people that can answer questions about how someone can actually create a meaningful bespoke solution to serve their purpose on the grid or contribute to expanding the capabilities of the grid beyond just plugging in nodes. To be clear im not saying we have the wrong people, we have a ton of really great people, but at the end of the day, we are attempting support, document and promote an international cloud service that operates differently then any other service out there, by choosing our service any deployer is adding an additional layer of complexity to their deployments, and losing what is likely thorough documentation being provided by out competitors, admittedly most of my tutorials, are the product of reading multiple tutorials and finding one that works for Threefold. we cant provide anything less than our competitors while trying to encourage movement to a new untested technology, its simply not realistic and the only solution we have to fix the shortcoming is to come at it head on.

• That’s great, How do we do that

  • Targeting the right audiences- gathering the support of 1000’s of individual to provide their resources to a single cause perpetually is no small feat and the developers and team should be recognized for the fact that their work has created what I believe to be one of the largest networks in the world, and definitely the largest decentralized network capable of both data transmission and computation autonomously. We have now reached the point where our network provides real capabilities that can serve the purposes of businesses and users alike, you can host your name server, your website, your game server, you can choose to store your data in a country on the side of the earth and process it locally, all in a completely autonomous system. We now have to show people that it can do that and how to do that. We need people for this, we dont need million dollar ad campaigns, we dont need new features or applets, we need more humans. We have to start presenting our grid for what it is, and what it can do today for web hosts, how it can provide multinational point of presence deployments in front of your critical infrastructure, I think for too long we have survived on the buy and support of the crypto industry soley landing us in this position today. We are a tech community, We provide networks, compute and storage while creating applications the improves users ability to live a more autonomous and secure life. Our customers are the tech industry, we need to be attracting the customers of aws, and other cloud hosts aswell as those looking for refuge for their crypto project if we ever want to not be addresses as just another crypto project. we have plenty of examples of ways to deploy pretty complex applications, but we have failed to supply a play ground deployment that just gives someone a drag and drop browser interface to a hdd storage on a node. nothing fancy, a tab that says storage, you add drives, it generates a web interface, you drop files on drives. The lack of the most basic functions of the internet, which are availbe, but are not being presented along side our more bespoke solutions is creating a massive rift in the understanding of what the grid is and how its works. If we are looking to attract those that will create their own solutions ontop of the grid we have to focus on demonstrating that the grid is capable of performing all the basic building blocks of their applications in way that they understand free of hype words and marketing. The tech industry has been majorly damaged by many crypto companies coming with wild claims of what they can bring to their company, we will not be given any free passes or free respect in this industry. We have to demonstrate to these people not only why they would want to host something here, but also why they would want to contribute to the growth of this project with their time and skills. This takes us beyond the seller customer-relationship to a point that we have to focus our efforts are attracting the right growth not just growth.

  • Break Down Every Barrier, No excuses- We do not have room for gate keeping or trying to follow any one agenda if we truly want to create an internet that can serve everyone equally, this is has to be our position on every proposal, every interaction, we are bringing people together that more combined skills then most large organization, and experience thats based in literally every corner of the world. many of these people have built incredible tools that far outstrip those available on the grid yet we fail to mention them when our customers ask for help. We have to be willing to be the organization that finds ways to let everyone contribute.

    • To Development- It has long frustrated me that the farming community has created multiple tools and resources that were needed so badly that the community self produced them, but they are largely ignored by the support staff when answering questions. We are not creating an environment of inclusivity surrounding the development of the project, despite the development being extremely open-soure in nature. I once saw a post saying “The forums aren’t the place for a time sensitive question” our forums average less than 10 posts a day. I read every post, every time we take a troubleshooting conversation to the chat, every conversation that has to be done by email, prevents the community from providing any contribution to the workload. Every conversation becomes a post that can be found later on the forums, an issue that someone can readily find a documented solution for. we have to expose the “workload” of the grids maintenance and support to the community if we want a realistic structure for providing real time support to our customers. This has to be a decentralized function and it has to be readily accessible. Weve recently had two forums post on terraform and creating a flist that have been incredibly helpful to many people building solutions, but more and more I find all of this information has been there all along, but I cant google it, and through many interactions it was never mentioned. If were going to support the construction of a new internet we have to be everyone elses force multipliers and ensure we give them every chance to succeed. If someone makes something that is better then what we have, we need to talk to those people and ask them how they did it and we need to welcome them to leading the charge on bringing their work into being a part of the official grid. I can assure you if someone from the team approached me and asked if they could use my work with cockpit to create an official version. I would pour out every piece of information I have to be able to provide a GUI managed workload on the grid today, instead ive found that the actual developers hadn’t even known of its existence months into it being released, there has been entire discussions in telegram on how we could fix bugs or improve the dashboard, but we don’t have a system in place that allows or rewards people for contributing their efforts to the grid without designing a solution all of their own.

      • How I think we could greatly benefit from formalizing and documenting a process for community members to contribute to the development of the grid both on the front of development and support, To have the support infrastructure we NEED to support and capture utilization we would need network engineers, programmers, and grid experts on staff all the the time, This isnt realistic, and wouldn’t be an effective use of finite funds, I propose we create a portal of sorts where both the devs and users can post an issues or a request for assistance, and attach with those a reward that is offered as bounty for providing a solution the requestors. right now we regular see people coming through telegram offering development work and they are directed to come up with a plan, create a solution and email it to someone with the hope that they might get a grant. we could have a bot that sends a message every time someone says “full-stack” and be just as effective at capturing these people and the only way to do is for us to make that process documented and readily available.

    • To Utilization- As it stands the only way to utilize the grid, outside of zonaris, is to also invest into a crypto currency coin and be willing to deal with it depreciating as you hold it while your deployment cost more and more coins each month, this is not optimal, and i think we should implement a solution without reinventing the wheel, most people are out on buying new coins right now, but what people do have is banks of coins sitting idle that they may be willing to use for a purpose instead of their fiat, which is in short supply. If we want our technology to support our coin, we have to sell the technology first and the coin second. the staking discount provides a huge incentive to hold in tft, but we should have a solution in place for those that dont want to buy and hold the coin directly, ultimately we dont need to make tft a stable coin, or accept fiat, but we also have to work towards providing the resources that allow ANYONE to participate, Most of the world has not lost confidence in cypto currency as a whole, but in investing into unproven projects, we are an unproven project, we need to be as accessible and transparent as humanly possible and we have to stop ignoring customer feedback based on where its given. I have seen it mentioned numerous times that the Threefold Youtube channel is completely dead, a offer was even brough up for community members to voluntarily run it, yet we still have an item in plain site, that makes it look like we stopped trying months ago.

      • How right now today, TFT exsist on the stellar chain, I can import my wallet into lobstr, and swap any stellar coin to xlm then to tft and send it to the chain, we dont need to re-invent the wheel, we agian have a resource capable providing a massive leap in functionality, that were simply not utilizing. We have to provide hosting to everyone, not just people willing to hold TFT. StellarX allows me to provide liquidity with my wallet that I imported into lobstr, I can buy, sell, cash in, cash out. I think we need a system that allows users to place even just stellar into their tfconnect wallet, and have the hourly billing of their node swapped and paid automatically. adoption of TFT and people holding is important, but it is more important that people being able to utilize the grid in a way they are comfortable with the terms of. If we could create a backend that handles swap similar to the way stellarx functions, and then generates a transfer of those funds to the bridge wallet. we could accept all stellar based coins for deployments being made at full market value.

       I truly believe the answer to the coin price, the answer to increasing utilization, the answer to fixing farming rewards, and the answer to creating a prosperous future for the grid doesn’t lie in new applets, mastadon, WOL, or any one feature, the only solution we have is to truly embrace the decentralization of the project and focus our efforts not on new features but on responding to the things that our customers are telling us. We have to capitalize on every person that wants to contribute to maximum of the projects abilities and we have to make it absolutely clear that the grid belongs to the world and if someone can create a way to give more people access to it, we want to take part in that and we welcome and encourage contribution from anyone that will improve the grids capability to accomplish our goal. We have to get the basics right before we can start doing the things that will change the internet forever and we cant just say, well that’s someone Elses job.

[ParkerS]

these two GEPS are relevant to my above post in regards to how to better reward farmers and developers.

[GEP] The Networking Farming Initiative

[GEP] Expanded Solution Provider Model