The Hidden Value Of The Hive Token

in LeoFinance4 years ago

It is easy to sour on Hive. After all, seeing all kinds of projects catapult passed this token and rise up the market cap rankings is depressing. However, it is vital to keep a broad perspective of what is taking place.

There is a lot of experimentation going on. This means that a number of newer projects are always popping up. People have a love affair with "shiny new things". Thus, the tendency is to run to them as the next great thing.

Certainly, a lot of what we are seeing take place will be enormously successful. Nevertheless, there will also be a lot that fails. Anyone who knows business understands there are a lot of pieces that need to come together. Having the right personnel is crucial as well as the financial resources, timing, and proper market.

After all, how many great ideas did we see during the ICO craze that are nothing today? In fact, that is just an extension of what was witnessed in the DotCom bubble. Millions were giving to college drop outs with an idea of an application only to have it all lost.


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Hive is an ongoing entity. Many point to the Lindy Effect as the concept to follow. With each passing day, the end point actually gets further away. While I understand the theory, I am not sure I buy into it 100%. What I can say is that, on Hive, we see expansion happening on a consistent basis. Things are growing and development is taking place. Thus, the mortality rate keeps being pushed out due to that. This is not a stagnant organism.

When it comes to tokenization, we are rapidly moving into the next phase where we are going to see "a token for all seasons". What this means is each major aspect of a platform or community will have its own token. The plan that @threespeak laid out shows this perfectly. There are three different tokens, all intertwined yet applying to particular aspects of the platform.

Hive does not have that. It is one token that covers a few purposes. To start, it is distributed, in part, through the Proof-of-Brain (PoB) mechanism. Secondly, it acts as an access token, providing people the ability to utilize the blockchain. Finally, it is used for voting on witnesses and proposals.

The last part is major. It is also something that is severely overlooked.

We just went through a rocky election in the United States. No matter what anyone believes, this was a massive grab for power. In fact, we witnessed this throughout the world. The idea of governance cannot be discounted. Throughout history, hundreds of millions have died in this quest.

On Hive, which is a Proof of Stake (PoS) system, governance is done according to the stake each person is holding. The value of the vote is tied to the amount that one has. Thus, influence is determined by how much people are involving themselves with the system from a token standpoint.

As stated, we are moving towards different tokens fulfilling each purpose. If Hive was being done from scratch today, there might be a different model that is followed. However, when it was put together, the accepted idea was to have it all as one.

We are starting to see how valuable governance can be even within the token world. There are a couple of tokens that truly exemplify this.

Here are a couple tokens that exist solely for the governance of platforms.

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governance.png

Notice the market cap of these two tokens is over $1.2 billion. Naturally, they relate to DeFi on Ethereum and are involved in billions of dollars worth of transactions. This make controlling those platforms very intriguing.

We could add more to the list such as SUSHI, but the point is evident.

On Hive, the token itself allows for determining where the system goes. This can be difficult to see since most people are focused simply upon the token value and little else.

However, it became evident before the fork when everyone was on Steem. Having control of the witness pool was crucial during that time. As most were aware, the community's stake was overwhelmed by the amount of holdings Steemit Inc had along with the powering up of the exchanges.

Anyone who was involved knows there was a lot of money involved in that conflict. In fact, the token price shot up as people were buying to improve their position to assist in their quest. The appreciation in price had nothing to do with future development, users, or prospects for the blockchain.

Instead, it all was about governance and who was in control of the Witness pool.

If memory serves me, the token price about tripled in a relatively short period of time. This generated tens of millions of dollars in market cap simply through this dispute.

As the Hive ecosystem grows, there will be a compounding effect in the token since governance is tied to it. This cannot be separated out. Anyone who is building something successful on Hive will not want to have things proceeding without any say in what is taking place. This is common sense and, again, talk to any business owner about this. Economies collapse when people lose confidence what is taking place.

Therefore, the more successful anything is on Hive, the greater the need for the Hive token. Compare that with Ethereum where governance is done through a combination of the miners and the foundation. Each has a separate role with neither being able to be removed.

With Hive, every application can have a say in what is taking place. The only requirement is to add to one's stake so that is has enough influence.

If Hive becomes a system with hundreds of millions of dollars in value tied to it, bet the ranch people will want to have a part in the direction of where things are going.

We have a long history of knowing how valuable governance is and what people will do to be in that position.


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I feel like I’ve been talking to the air for three years but one more time for the cheap seats:

EXPECTING RETAIL TO COME TO HIVE WITH 1998’s SEARCH FUNCTIONALITY WILL NEVER HAPPEN, EVER.

Expecting the public to grasp employing multiple front ends to search for content they care about is far fetched. I literally cannot comprehend how this is not priority one. How many potential user investors like myself have clicked that magnifying glass and gone NOPE. It blows my mind it still hasn’t been fixed as it’s literally the first thing an unfamiliar user will click. I just searched “Synth” and the top posts in what looks like an Ask Jeeves query are three years old.

There is an interesting point you bring up. Many still are not used to or don't care about participating in the governance and don't really understand how Hive works.
I'm not fighting to be part of the governance but keeping my Hive stake as it's still very important and using it to vote witnesses I think are important for the platform. And curating with it obviously as that's important too.

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Hive is hard to understand. The website doesn't explain the different visions.

Hive is a community hardfork. A lot of Justin Sun lovers dump their tokens to buy a centralized one instead. Forks usually get 10-15% of the "original" coin in marketcap.

Hive tends to pump when retail gets into blockchain, and retail didn't really kick in until this week (google search stats).

Hive has negative feedback loops with HBD. (which becomes a positive feedback loop as soon as hive starts rising).

Hive has lots of selling pressure due to people cashing out post rewards and witnesses paying for nodes/financing projects through the DAO. This sell pressure also becomes weaker in a bull market as HBDs are insignificant compared to hive's market cap.

Hive has not seen demand shocks yet as RCs are still abundant (will not last long)

Hive has lost the "official team" behind the coin (Steemit devs and marketing people)

Despite all of this hive has been trading sideways for the last two months, since its 10 cents bottom on the 1st of November. It is even up 30% if we take the current price of 13 cents. Development has never been faster without the old dev team.

Developments are appearing everywhere, and succeeding (Splinterlands, Leo, dbuzz, rabona). Nodes are cheaper than ever to run. Retail is coming. I've never been more bullish than now.

Edit - Hive also lost the SEO steemit provided, which was important for a lot of content creators.

Edit - Hive also lost the SEO steemit provided, which was important for a lot of content creators.

this is true, but it looks like hive frontends slowly getting closer. few months ago when i looked for some older blogs it was all steemit, now i get some hive frontends there too.

That is a positive sign. Hopefully some are moving up the list as more information is placed on them.

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I think retail is not coming otherwise you would see more power ups to maximize earnings. For steem also. People like to shill what they hold, Hive only gets shilled by hivers on crypto twitter.

Retail only knows Bitcoin and Ethereum. They don't browse coinmarketcap. They use popular financial sites yahoo, bloomberg. They buy crypto on Coinbase, Gemini. Hive is not advertised to them. They are not on crypto twitter, they are on bitcoin twitter. Retail earn more than alt-enthusiasts for this reason.

Financial assets usually underperform during legal tie ups. Crypto hasn't been any different. Even the bots are set to "fuck that". All that Hive from the hardfork is sitting there because it is to risky to 🔥 and to risky to use.

Those projects develop for themselves and create an economy surrounding themselves. Hive is just a gateway. They are not assets they are liabilities, and I wouldn't be surprised if they thought the same about Hive.

Good points, but as a 22 year old, I see my friends warming up to crypto again. And believe me all they want to do is buy shitcoins. The don't even want to know the fundamentals. They know it's gambling but want the 100X.

TronSteem will find a way to monetize rowdy gentleman. The more they party, the bigger the pump.

Agree, but I truly believe the higher Steem goes, the higher hive will go. It is extremely easy for the narrative to be "Steem is centralized, Hive is the decentralized Steem".

And this narrative will be much stronger than a premine or something, or the DAO hack for ETH, because it 100% provable and covered in stories, and there's no debate to have there. Justin stole funds, censored posts on a censorship proof platform, and has the ability to vote the witnesses as he wishes.

First of all, Hive doesn't decide if they are decentralized. The SEC does. Second of all I seriously doubt people will care or even know about the pre-existing conditions.

And also, Steem and Hive decoupling have began and every month become more and more uncorrelated.

I'm not saying investing in Hive was bad. I'm saying the circumstances has made it a tough hold. I even sold my Steem so I wouldn't be rekt. Screw the asshats that suggested otherwise.

What I'm confident in is that there is more innovation that will be coming out of TronSteem. Hive is the ok boomer chain.

SEC decides? SEC will decide that every coin they can sue is centralized. I'd like to see them sue hive. Who would it be?

However, it is very easy to sue Justin Sun and destroy steem.

All great points. Not sure about the upcoming week for a hive pump but we will see how that fares.

The fact that development is taking place faster than ever is something that I find to be the really gem of what we are building. There is a lot of development which is always increasing the offerings to users who show up. Plus the tentacles are reaching into many different areas, not just into one target market. The community idea really can expand things to the point where there are hundreds of different target markets, each pulled in by their "own" people.

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do you think it would be useful on HIVE to have a token only for governance, which is not HIVE itself? Kind of how @ 3speak plans or how Leofinance will introduce

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Not at all. No reason to do that. It would just further to complicate an already complicated platform.

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What an education I am getting from your posts.

100 percent upvote, reblogged and tweeted.

Bradley

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This is a wonderful summary of reasons why (in my opinion) Spinvest should actually more thinking about to buy HIVE than to sell it.

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Yep, that is my view of things. It is imperative that we have our finger in what is taking place. People seem not to care about governance until things do not go their way, then it is important.

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It is a little funny how easy it is to forget where we came from. I know I am guilty of that from time to time. You get in your daily routine and you get focused on just one aspect of the Hive token, or whatever token you happen to be talking about. The same can be said for LEO. You start to forget all of the other things that it applies to and all of the potential applications it can have in the future.

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We need to keep stepping back to see much of what is going on. It is easy to fall victim to what we perceive just before us.

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Thanks for underlying the value of Hive again. It is true that there is a need of direct governance, no matter the stake. Of course stake is here decisive, but what use of millions of HP if they are not taking part into the ecosystem.

On a personal wish, like you said, I want to see the leaders of the successful projects taking a stronger foothold in the Hive governance. We might need a faster change of top witnesses so that the status quo is not guaranteed.

I have in mind a proposal that the witnesses shall be paid in bonded Hive, like Hive that it is directly powered up, can't be used for witness voting but can be used for curation. Here the votes system might need to change to avoid abuse. This will stop the massive bleeding of Hive to exchanges and will create some incentive for the witnesses to be active on the chain.

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So long as the people in charge don't get corrupted everything should be fine. In the end, it depends on who is in control. Personally, I just like growing my own account so I have no plans of powering down or selling HIVE for real money. As I do not plan to put external money inside, I haven't really cared about the governance part too much.

Well the corruption is easy cast aside since votes can be undone at any moment. Of course, there needs to be enough MVests to make that effective.

Thus far, that is the problem.

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We have a long history of knowing how valuable governance is and what people will do to be in that position.

People who get involved in governments should not be self serving.

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I have a love-hate relationship with HIVE.

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There's so much truth in this, despite the token value, maybe compared to other sub tokens created upon the blockchain, Hive is much more required for a hundred reasons. There's certainly no where one could possibly sell off all his Hive holdings because that would bridge him from performing any activities on the blockchain. Hive will have it's time to soar.

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There's certainly no where one could possibly sell off all his Hive holdings because that would bridge him from performing any activities on the blockchain. Hive will have it's time to soar.

This is true. And to take it one step further, a successful application will consistently require more RCs for the users.

All of it will keep feeding onto itself.

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Yeah, the RC was one thing I had problems with when I first joined Hive. With all I was told, it's impossible to operate without it, and only but Hive can power that.

So everything are boils down to the Hive Token.

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It operates in lieu of transaction fees. This something completely foreign to the social media world but very common to finance. Hence, a DeFi on Hive would end up attracting people who are no unaccustomed to having to spend some money to transact.

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The Hidden Value Of The Hive Token

I apologize but in the end I did not understand what the hidden value is but I like that you think it exists and I go on your hand. Because I don't understand how Hive works and I wasn't interested, as I don't think most users are interested. Most are happy that there is a place where they can express themselves with the tools and skills they have. I thought Steemit/Hive was/is a ship floating on the ocean because the wind blows in its sails.
Now I understand that it is much more complicated but I wonder what it means centralized/decentralized in the management of a ship. Can it be centralized when the crew listens to the captain's command and decentralized when the passengers decide how to steer the ship?

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Hive is complicated, there is no doubt about it. That is why the layer 2 solutions are vital. People will not immediately be able to grasp, nor will they care, about issues such as governance.

However, the ones that will are the builders, the application producers. They will definitely have a vested interest in the governance of Hive and which witnesses are there.

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That would be my idea, that those who build, those who have great financial interests must first of all find the best methods of improvement and progress. Those like you understand, those like me are waiting...
Thank you!

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You are right on that and as new apps and games are getting into the Hive ecosystem as those are growing so Hive itself is growing. And the best of it with the second layer is that you can benefit both of them in terms of rewards.

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I also expect that Hive value increase as the hive network expands with new and better projects.

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@taskmaster4450, Sometimes other important Values get appreciated before Monetary one. In my opinion the Story of Hive is same, here different Universe is building up which is much bigger than other Visions. Stay blessed.

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Do not miss the last post from @hivebuzz:

Feedback from the January 1st Hive Power Up Day

Excellent post sensei. I spoke a bit about the importance of staking in my financial goals post. Staking is a share of action you get there, one that gives the right to distribute tokens as users see better fit. If people only see the power of staking. By staking you control distribution itself via upvoting or downvoting. What really caught my attention about this type of social media (back in the day steem) is how it is beautifully designed when it comes to governance. We had an example with the steemtakeover about why staking and power in the right set of people can do wonders or nightmares. Best regards sensei!

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It has its drawbacks. Like some witnesses can still be at the top 100 even when they are no longer active at producing blocks. Inactive users that have voted on these inactive witnesses have wasted their power and this can prevent other witnesses from replacing old witnesses in ranks. Ranking of witnesses matters a lot in governance. Our witness voting is broken because there is no decay in your votes if ever you become inactive or not interested in the platform anymore. Having the option to reset to default after a certain period will help cut the number of inactive witnesses from top 100.

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That Lindy Effect is super interesting... and it clearly applies to Hive in some form or another. Hive is a desert plant thriving on very little resources.

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Things are growing and development is taking place. Thus, the mortality rate keeps being pushed out due to that. This is not a stagnant organism.

This is something I played around when forecasting the future of the blockchain. Here in Leo I see roadmaps being fulfilled in their due time if not, even earlier than what most believed. There are projects being started that are slowly getting more attention as each day passes. While the price action of Hive has been a source of disappointment, I don't see it to be a negative thing in the long term.

I see the prices of Hive right now as bargain sales that would later take off in the future and leave those weak hands to regret. Leo is part of Hive and it showed what a well built community can do for the blockchain. Now imagine if more tribes came up with more innovations on top of the blockchain a few months from now. We're seeing small victories amidst falling prices and that only shows which authors are here to stay through thick and thin for the platform.

Most holders of the token don't even realize its full potential and only seek instant gratification. That sucks but there will always be weak hands in investing. We are in a time where things are being built that game changes the world and I'm glad I get to see this unfold.

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