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- Hacker News
- Region North or South?by effnorwood
- That’s pretty slick. These folks need to come to the Carolina Code Conference in a couple of weeks…by brightball
- Mentioning what SOFR is would be incredibly useful.
Gemini: The Secured Overnight Financing Rate (SOFR) is a broad measure and benchmark interest rate for U.S. dollar-denominated loans and derivatives, reflecting the cost of borrowing cash overnight backed by Treasury securities.
by teiferer - When LIBOR was killed, financial derivatives were forced to reference (compounded) SOFR, it's a trimmed average of all the overnight lending agreements.by mhh__
- The first sentence of the first section entitled "The Rate" reads as follows
> The rate tracks SOFR (the Secured Overnight Financing Rate), the benchmark overnight interest rate published every business day by the Federal Reserve Bank of New York.
See https://docs.carolinacloud.io/organizations/prepaid-interest...
by ihumanable - Cool! Dumb question, but do prepaid credits ever expire? Feels like the interest only matters if they don't.by manzt
- The only way CC credits will expire is if I (the founder) die and my beneficiaries liquidate the business
- They claim to be 1/3 the price of AWS, so I calculated for fun and it's 8x more expensive than my server auction machine I just got from Hetzner. Which itself is 6x cheaper than on-demand pricing at AWS, but only 3x cheaper than spot. Of course I get free egress. And my RAID1 perf can't be matched by the baseline EBS storage I've used in the comparison.
In any case, they don't seem to really have an edge on AWS unless you have huge egress. What did I miss?
- That's not a like-for-like comparison. You need to compare CC to the c8a range of AWS, on-demand only. That's where the 1/3 comes from. For example:
c8a.medium (1vCPU/2GiB RAM/no SSD) on-demand on AWS: 5.39 cents per hour plus egress Carolina Cloud equivalent: 2 cents per hour with zero egress
If you don't have egress then the price is closer to 40% that of AWS. If you do have egress, the price could be far, far below 1/3.
Hetzner server auction is great for many use-cases, but it's not a fair comparison with EPYC Turins.
- Carolina wins a Stanley Cup, now we have hyperscalers? Moving up in the world!by weakfish
- I wonder if they see any material differences in their customers’ usage or spending habits on the platform, receiving this interest? My perception of most businesses is that prepaid plans are typically disincentivized compared to subscriptions that auto-renew.by RNanoware
- I think this is pretty great, though I’m sure hyperscalers will find a way to make sure such a scheme becomes as shitty for customers as frequent flier programs are today.
Think of it from a small hobbyist perspective: I want to host a few small workloads, but I don’t want to deal with reoccurring billing. Maybe I have money now, but can’t guarantee it later. With this scheme, I frontload with a substantial amount of prepaid credits - say, $150 - while only using $5 or $10 a month. In theory, if the interest rate is correct, I could earn more on interest faster than the prepaid credits get drawn down - thus having a perpetual instance for a one-time charge.
Personally? I think that’s a fair and reasonable arbitrage opportunity, because it also means the vendor can take that excess Capital and invest it themselves to create a return greater than the credits paid out. In practice, some greedy jerk C-Suite inevitably places caps on payouts or time limits on credits to ensure they capture more for themselves and leave less for their customers.
I guess what I’m saying is that I dig the idea, I’d love to see it implemented by more vendors, but I also know it’ll get rules-lawyered to death in nanoseconds under the current market incentives.
by stego-tech - Yes - presuming the funds can’t earn SOFR+. The opportunity cost is the interest being earned elsewhere (minus interest earned taxes)by dcchuck
- This is correct, if you put in $1000 you could basically run a small dedicated VM in perpetuity.
- How many small hobbyists really want to front load $150, instead of paying $5 a month, and would only be swayed if they got interest/credits?
At 5% simple interest, your $150 would give you 62.5c per month. So you'd need closer to ~~$1200 to have a perpetual hosting machine; for a $5/month VPS or whatever.
You also now have an additional problem: $1200 of committed spend on a cloud provider; which could go out of business one day; for a $5/month workload.
I think for most people, the second problem is much bigger than "I don't wanna set up recurring billing".
by dannyw - "I think this is pretty great, though I’m sure hyperscalers will find a way to make sure such a scheme becomes as shitty for customers as frequent flier programs are today."
Oh, that's not even a challenge. The reason to offer a scheme like this is basically to abuse the fact that a human customer will value this disproportionally to the cost of providing it. But if the customer perceives that value, that means you can take that surplus, which isn't real, and then extract that surplus from almost anything else that comes in the form of real money, and create something that humans value as much as the original service, but now with more money to the service provider. Converting the customer irrationality into money means you don't even need anything as obvious as a cap, which sounds scary. You just raise your other prices.
by jerf - I've looked at doing this in Europe before, interest-bearing completely changes the classification of the prepayment. I didn't dig too deeply, but the general gist was that regulation-wise it really wasn't worth doing for a relatively gimmick-level featureby badatnames
- Which is a good thing. While it may seem strange to regulate these things for good faith actors, it's obvious why it's a great when thinking about bad faith actors.by linohh
- This is interest on credits, not on cash. Once you start paying interest on cash you need a banking license. I think you'd be fine even in Europe paying interest on credits.
- Very interesting I am curious how this is the case, could you share some more details/information about it?
Also, how does it compare to say, accepting gold or treating a gold based ledger instead treating gold as a currency and similar ideas?
Also could this re-classification be ever useful too? For examples bonds being treated in such way?
- In some regulations you can also be expected to declare and pay tax on the money you earned from the interest, which can be annoying to do for such small values.by jwrallie
- I think that is why Carolina Cloud pays the interest in credits (redeemable for their services), as opposed to cash. It is not much different how some business give you a discount if you pay the amount upfront or in a more convenient form of payment.by mynegation
- I've heard about similar regulatory barriers especially in finance so this does not surprise me.
A long time ago I remember reading about banks that want to provide incentives for saving that amount to basically lottery tickets. The idea is that people aren't thrilled about a savings account that pays 2%, but if instead they offered a monthly 1 in 50 chance to get 100% return (same expected value, ignore compounding), people would like that a lot more. But this amounted to essentially a lottery and that's a state monopoly.
by bko