In Bitcoin, the mining reward halves every 4 years. The upcoming halving event in BTC will result in mining reward getting reduced to 6.25 BTC per block which is currently 12.5 BTC per block.
In Hive, there is Block producer reward for witnesses(as Hive is a DPoS blockchain). But in Hive, there is a number of actors along with witnesses who are rewarded for their respective roles from the defined reward pool.
The inflationary reward pool has a defined inflation rate(which reduces at the rate of 0.01% per 250000 blocks) and the new HIVE that are minted per Hive Block are allocated to the Reward pool and then distributed among the various actors.
Distribution of Reward Pool
- Content creator & curator- (65%)
- DHF- (10%)
- HP Holders- (15%)
- Witnesses- (10%)
The current inflation in Hive is 8.05% and it decreases at the rate of 0.01% per 250000 blocks until it reaches 0.95%. After reaching a 0.95% inflation rate, there will not be any further reduction and it will become constant.
The new HIVE that is minted per Block can be calculated from the following formula:
new_hive = ( ( virtual_supply * current_inflation_rate ) / ( 10000 * BLOCKS_PER_YEAR ) )
Virtual supply= Total supply of HIVE including the HBD in the equivalent of HIVE at the current rate, as HBD is backed by HIVE. This figure can be obtained from Hiveblocks.com.
Blocks per year- One block is created every 3 seconds, so per year it will be 10,512,000 blocks.
Every 3 seconds= 1 block
Every 1 minute= 20 blocks
Every day= 20 * 60 * 24= 28800 blocks
Every year= 28800 * 365= 10,512,000 blocks
So with the current inflation rate of 8.05% and virtual supply as 369.736 million, the new HIVE being minted per Block= ((369,736,000 * 805)/(10000 * 10,512,000))= 2.831 HIVE
As the Block producer reward(witness reward) is 10% of the reward pool, per Hive Block it rewards 0.283 HIVE(10% of 2.831) to witness.
Virtual supply, on a year-to-year basis, will definitely increase from the previous year as a result of inflation. However, the increase in virtual supply will slightly offset by the high price of HIVE.
New HIVE per block is a function of both virtual supply and inflation rate. The inflation rate is on a falling gradient whereas virtual supply is on a rising gradient.
So if we take the current HIVE price as a reference and project the virtual supply for the next 20 years, then the projected virtual supply will be somewhat like this.
Please note that with high price of HIVE this curve will be lower than what is shown here. That means the virtual supply will be slightly less than what is projected here.
Based on the projected virtual supply and inflation rate, the estimated new HIVE per block on a year-to-year basis is given below.
- From the year 2020-2029, the Block reward will be in the range of 2.9-2.3 HIVE per Block.
- From the year 2030-2036, there will be a drop in Block reward from 2.365 to 0.941 HIVE per Block.
- After the year 2036, the Block reward will remain almost constant at around 0.69 HIVE per Block.
So be it a content creator, curator, vested token holder, Block producer, etc they all can make the most from the Hive ecosystem in the next 9 years or so. After 2029 it is going to be very difficult as the Block reward will reduce substantially as evident from the graph.
Furthermore, the new HIVE minted per Block will also reduce by some amount than as projected here, if HIVE will rally and trade higher. Because that will offset the virtual supply by some amount as the ratio of HBD to HIVE falls as a result of the high price of HIVE. To know more, please click here.
Put simply, the early adopters of the Hive will always be at an advantageous position. The Hive DAO(DHF) is something that offers a unique opportunity for all(Developers, Marketers, etc) to make this Hive ecosystem better and earn high rewards. Some are even making six-digit figures from Hive DAO. There are authors who are making more than 2000 USD a month even at this low price of HIVE(0.34 USD). Just imagine what could be the potential when HIVE trades higher. Being a decentralized community-driven ecosystem Hive is all set to usher an era for Web 3 applications. Hive not just pioneers as a Blockchain technology but also as a community.
Thank you.
Hive Frontends:
Hive Block Explorer
Hive Projects Directory
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