Now let's analyze Hive (formerly Steem for you OGs out there) on its investment thesis.
Read this article for a little more info on how Hive's tokenomics work:
This one took me a while, because Hive is a very intricate, full ecosystem with lots of moving parts. Thanks to @alex-rourke and @starkerz for helping me fully understand the system. Read this article on Hive's tokenomics to understand how it works:
https://inleo.io/@alex-rourke/hive-understanding-the-currency-and-reward-system-312
Please read the below article if you haven't already! Just so you understand what I'm talking about here.
https://inleo.io/@thedessertlinux/stop-hoarding-gas-tokens-crypto-investing-for-the-modern-age-8ga
🪙GAS TOKEN: Hive Power
The gas token of the Hive ecosystem is Hive, or staked Hive. Unlike traditional gas tokens, however, you don't actually spend it to do things. Its capacity, which allows you a certain number of actions per day. Essentially a refundable deposit.
Instead of paying fees with capital, you're paying with capital opportunity cost.
You should buy and power up Hive as a gas token if you want to post content or upvote content for visibility or curation rewards.
🪙INVESTMENT TOKEN: Hive Power/Staked HBD
If you want to invest in the Hive ecosystem, i.e. earn from the network growing in users and usage, you'll either power up Hive to earn staking rewards, or stake Hive Dollars (HBD) in Savings.
Note: because Hive is a no-fee ecosystem, more users/usage does not directly contribute to this! It does, however, indirectly contribute if new users mean more people buying Hive. More on that later.
🪙PRODUCT TOKEN: HBD/content
The product token for Hive is either HBD for payments, or the capacity to post content and data to the Hive blockchain. You should acquire liquid (not staked) HBD if you want to use it as money, and post or consume content if you want to, quite simply.
Hive's investment thesis:
Hive is a content and data platform with built-in incentivization models for creating content, curating content, staking power, etc. etc.
In short, you would invest in the Hive ecosystem if you believe people will use it to create content, send money, and so on.
More precisely though: you should invest in the Hive ecosystem if you believe people will use it, and that will lead to people buying more Hive.
The "zero-sum problem"
Because it's a zero-fee ecosystem, Hive pays people exclusively from inflation (new coins created). This means that, all other things being equal, people are paid by non-staked Hive holders (or even staked Hive holders, if their rewards are less than the inflation rate).
Essentially, this means that everyone in the Hive ecosystem is competing over a piece of the same zero-sum pie. Creators in particular can get a piece of this while owning little to no Hive.
I heard a term I've not heard in crypto before: "extractive user." In fee-based cryptos, every user is a benefit, unless fees are artificially low. But Hive has to be wary of which users it attracts, since some will take from the ecosystem and not give back, due to its design.
I believe this design incentivizes competing for status within the ecosystem over growing it, particularly with the ability to downvote content.
Mitigating the zero-sum problem
The way around the zero-sum incentive problem is very simple, but tricky to get right: onboard users and businesses that use Hive but which get paid from OUTSIDE Hive.
If new users see Hive as a data storage blockchain primarily, they will buy Hive and drive up the price, benefiting everyone and offsetting the extra cost to node operators for storing their content. They should participate in earning from creator/curator rewards only as an added, but not primary, benefit.
In my opinion, the Hive ecosystem should prioritize projects which buy Hive as part of onboarding users, but which find external ways of profiting, both for themselves and their users.
Posted Using INLEO
Very good break down my friend!
Cheers!
I appreciate this post that has shown me some economic interiorities about Hive.I am relatively new within the hive and these issues are still difficult for me to understand.Thanks for these lights about it.
Thanks! It's a never-ending learning journey. I've been in crypto a very long time, it takes a while to learn everything.
I already believe it, it is a complex but fascinating world.I already follow you to try to learn a bit of what you share
Well written Joel. Key insights herein. I have been using Hive for almost two years and just now think I understand a little more on form and function from your observations. Thanks a million! !BBH !HBIT
Cheers! I aim not to be a "value extractor" but to help provide value to people here.
(4/1) You mined .9 🟧 HBIT and the user you replied to received .1 HBIT on your behalf. You can receive 100% of the HBIT by replying to one of your own posts or comments. When you mine HBIT, you're also playing the Wusang: Isle of Blaq game. 🏴☠️ | tools | wallet | discord | community | daily <><
What's more, you found a 🟡 Blaq gold coin (BLAQGOLD) as a bonus treasure token!
There is a treasure chest of bitcoin sats hidden in the game. Someone will find it. Happy hunting. 😃
You can see your random number generated in the Discordexplorer A, explorer B, or take a look at your wallet. Read about Hivebits (HBIT) or read the story of Wusang: Isle of Blaq.Success! @furstlight server, #hbit-wusang-log channel. Check for bonus treasure tokens by entering your username at a block explorer
Tje Hive ecosystem is complex enough to be quite intimidating to us, the newer users, an that is precisely why we need this kind of posts.
Cheers!
Sometimes I feel as I am only a value extractor, but that will change with time. The nice thing about Hive is that you can help to distribute the distributions so to speak by curation.
In my opinion, that's up to the individual to use the system in whatever way it benefits them.
It's up to builders, the DAO, community members, etc. to worry about building systems that remain a net positive for Hive.
Very true. I hope to work my way into building one day.
Interesting read :) Appreciate the effort!
That said, I have seen a lot of diferent takes on Hive and its purpose troughout the years, different people trying to put it in a box, but it seems that it just doent fit in one box.
Hive is a lot of things and it is diferent thing to difernt people and it keeps evolving with time. Slowly, but surely. Today it is diferent that it was one year ago and much diferent then two years ago. I bet the next year it will be slightly diferent as well.
I agree here. Even to a same user Hive has changed through the years. I started soonish, then left, then returned as a player, then enjoyed like one year very active in socials, then spent like 1 year just lurking, then Im using it less intense but as a perma-tab in my browser... It is a solid blockchain, more than 95% other projects can say. At this point I'm not even looking for moon, it has been part of my life for so long.
Well hopefully I inspire people to think a little more critically on what it does, and how to best help it grow.
I've been buying and selling Hive and HBD's using my Hive and HBDs for quite a while now... I have to keep a Hard Copy to keep track of my trades... I turned it into a Game...
Nice, what's the score?
It's been slowly building up... It's just one more way to obtain more Hive and HBD's... It can be confusing if you don't keep a hard copy...
Suppose that Hive blockchain can be used for data storage (which is true). Is it optimized for certain forms of data, so that some forms of data are better than others? Could Hive blockchain be used to create something like, for example, Baseball-Reference.com or Ballotpedia? I think the answer is "yes," but proof of concept needs to be demonstrated for something heavy on number crunching and tabular data representation.
If Hive can be used for developing games, surely it could be used to handle astronomically large data sets for presentation, processing, and consumption.
Yes, I agree. Now, what is indexing and querying like? I'm not super familiar.
This should give you an idea of the amount of indexing and querying that is possible. This is already built and operating on hive and pulls hundreds of thousands of podcasts to its index: https://tiles.podping.org/
I’m sure @brianoflondon can further clarify regarding hives ability to index and query at scale
I love this type of content that nurtures our knowledge about the platform.
Thanks! Appreciate the support.
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Thank you for sharing.
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Its always fascinating to read summaries of Hive from newcomers, but you are the OG crypto person to be a newcomer doing a summary of Hive and you add new twists and original insights in your summary of Hive from which old Hivers can learn.
I am reminded that our perception is always limited by our physical limitations to our point of view. And the value of someone elses point of view far exceeds the value of a simple second look. It is a view from an entirely different perspective, revealing new aspects or impressions.