Where does the value of Hive come from?

in OCD6 months ago (edited)

With every Hive post you view on Hiveblog or PeakD, you will see the current value of that post displayed in 'Hive Rewards' - this is the value in Hive that will be split 50-50 between the post creator and the curators (the people who voted on that post.)

value of hive 2.JPG

Where does the value of hive come from?

The value awarded to any Hive post derives from several sources:

Weight of upvotes and downvotes

The main in-Hive variable which determines the value of a post is the amount of Vested Stake which votes on any given post. The more vested stake, the higher the value of an upvote.

You can work out the value of a vote for any amount of stake by visiting BeeMe and using the 'vote simulator tool'.

For example, at time of writing, a 10 000 Hive Vest will give a 100% upvote value of around '1.7 Hive Rewards', or just under $.40 at current Hive Prices ($0.24 June 19, 2020).

You can see from the above screenshot that there is quite a variation in post-payouts, because of variation in the total number of Vests voting on each post.

Why do people Upvote (or Downvote) content?

There are several reasons people upvote content on Hive:

  • Firstly, because they like the content, they think it is of a quality worthy of an upvote. There are several curation initiatives which actively seek out quality content.
  • Secondly, people may be voting on content because they know the person is doing development work behind the scenes on Hive. This can explain why some people get consistently high rewards for mediocre content.
  • Thirdly, someone may just vote because they like the person.
  • Fourthly, behind all of the above is the motivation for curation rewards - the more a post gets paid out, the more the curators (voters) share between them - many users make >10% curation return on their Vested Hive power.

Unfortunately there can be issues with vote-trading, 'circle-jerking' and just straight up abuse, where groups of people milk the rewards pool by posting low-quality content.

However, it also possible to Downvote on Hive to reduce rewards, and there are dedicated accounts which focus on Downvoting such abuse, so this is kept to a minimum.

Relative Value to Other Posts

All posts rewarded over a seven day period are paid out from the 'rewards fund', which currently stands at around 830 000 Hive (you can check the live amount at HiveBlocks), and the value of any one post is rewarded relative the stake weighted votes of all other posts. Your post might be worth $10 on Saturday, but if @blocktrades decides to go on a voting spree on other posts on Sunday, it could well be worth a lot less on Sunday, because he has shifted the value to those other posts.

The Market Value of Hive and potential future value

Hive is traded on exchanges, and its value can fluctuate considerably depending on demand for the Hive token, this will have an impact on the value of your rewards.

When it was announced that Hive was to be listed on Huobi, the value increased by 10 times in just a few short days, however, it slowly came back down again.

It's widely anticipated by users of Hive that this blockchain has good fundamentals (useability, scaleability, immutability) and so demand should increase in the future.

This means that while the payouts on your post are $1 today, that pay-out may be worth $10 or more in the future.

There's more to Hive's value than just the money

There are plenty of other factors which give Hive underlying value:

  • The anti-censorship ethos - meaning this is a home for diverse people who have lost their right to freedom of expression through being deplatformed by centralised social media.
  • Immutability - once content is locked in the chain, it cannot be altered.
  • Community - there's a great set of communities here on Hive, engaging with content on a daily basis.

The later especially makes Hive Priceless!

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Nice one on the layman's explanation mate!

But I think you could have just said "it's all magic internet money" and saved yourself the trouble of all this 😜

I'm joking of course - I'm sure a lot of people will find it useful when they read it!

It's really tough trying to explain these things!

Magic Internet Money will do me!

Haha, yeah I know, that was the challenge I had with the Bluffer's Guide but thinking of revamping it and giving it a face lift although if it can all be explained with "Magic Internet Money" then might as well put an end to that idea right now 🤣

Well ultimately Hive is just printed at a certain rate, so it is magic internet money!

Lol! Yep, will shut down the Bluffer's Guide right now 😃

!Engage 25

Especially informative post✊️!
Thank you.

Hey thank you and thanks so much for the tip!

Posted Using LeoFinance

Pleasure! Added you to my Twitter Account. Keep Adding Great Content Bro!

Very good explanation.
As more users are onboarded and invest in Hive, Do you see the rewards leveling out and becoming more decentralized?
It would seem that as we more diverse audiences of content creators, and user level interaction, along with the native economy broadening that would create a more truly decentralized effect.
Open source is going to play into that from a developer aspect as well I think.
Hive use case is live, and growing exponentially on all fronts.
People are awakening to the facts of centralized legacy media, they want and need everything we already have and are building on. I think all of that gives Hive limitless value.
Thanks for all your efforts
Peace

I absolutely do expect to see more levelling out - I think the 50-50 curation split has led to fewer people just posting for the sake of it as now they earn so much just curating.

And with tribes and side tokens, that's several other ways for diversification.

I think the future's bright for this place, with gaming especially!

Posted Using LeoFinance

I know some people vote to optimise their own rewards, but we really have to think about the sustainability of the platform. If new users give up due to lack of support it loses credibility. If it actually grows then there's a better chance of the HIVE price going up and we all win. Selfishness could kill Hive. We both benefit from auto-votes, but I could happily live with less of them if it meant good, small accounts getting more. I may delegate more to @tenkminnows to help with that. Got a few people doing so, including yourself and others follow the trail. That's the only auto-voting I do.

We do need to emphasise the social side too. People are happy to use other platforms for no reward and Hive could be social too, although we have the 'wild west' issues of trolls etc. Just have to do what we can to make it a better place to be.

Thanks for these informative posts.

There’s lots of people like myself in the hive engagement league that are getting out there in the trenches of the newly created posts and trying to get people engaged and enjoying the place. It’s been a lot of fun but indeed I’m doing it to improve my and lots of others long term investment. Without the new users, hive would eventually die.

Jury is still deliberating on this one (if he’s a mooch or not) but this guy was appreciative of my initial interaction with him so he bought 100k hive.

x130o3.jpg

We do need people to buy into Hive. It could give them a nice return if they curate. Smaller accounts can help seek out cool content. We have great potential, but it will take work to get there.

I could have taken that post in a few directions, I actually wrote it on a note pad, then realised I'd answered a slightly different question to the one set, but just went with it!

I agree that we need to look more at newer and smaller accounts. I just doubled my delegation to 10K minnows to hold you to that! Not much, but it's something!

I think a sensible move for new users is to look to side-chains like LEO.

Posted Using LeoFinance

I think that was a good simple explanation that new users will find useful.

Hey cheers!

Good understanding here ... now, I understand why the value of a post wanders around a few pennies over the course of time ... I always thought it was just price fluctuations in Hive, but it is REALLY more like being graded on a curve ... which I always hated, but then again, if your stuff is at the top of the curve, you don't really suffer -- SO, I just keep doing as I have been doing!

If it's like being graded, then there's no universal standard!

There still is no where near enough of a correlation between quality and rewards on this platform!

True on both accounts ... it is, alas, what it is. We make the best of it.

I love this platform, I came from others with mediocre content and with groups, mainly whales, where newbies had no time. I hope HIVE doesn't let me down

It is still quite Whale and Orca centric around here, what crypto project isn't - but you do see smaller accounts getting some traction too.

The communities are good - with your content, or any content on crypto or investing, you should post through leofinance - it still posts to hive, but you also earn LEO, which I'm quite into myself!

This is informative

This is one of the best straight up to explanation I ever read since the beginning of this blockchain era.
A decentralized governance assets value determined by the community and the community alone!
As long as there are good people in the community, nobody can shake this belief on HIVE as decentralized platform, a true home for every content creators.

Hey cheers, and yes the more people actively staking and voting, with integrity, the more reliable the system is!

We seem to have got our head around combating abuse pretty nicely as of late.

  • Immutability - once content is locked in the chain, it cannot be altered.

Does this mean that I cannot edit my post later? I think this means something else, right? what is content getting locked in chain and cannot be altered here mean?

You can edit on the front end and it will change, after the seven day pay-out, but if you look at a block explorer it will record this as a 'new post', the old original version will stay the same, in whatever block it was recorded - here's the original version of the Justin Sun fucky post on the block explorer - the post has been changed fundamentally on the front ends, but the original remains here, forever.

https://hiveblocks.com/steem/@justinsunsteemit/justinsunsteemit-witness-voting-policy

I assume a consensus hard-fork could remove some blocks (I think, I'm not sure), but failing that, we have immutability in the sense above.

Thanks @revisesociology for educating me! :) That really makes sense now.

As the number of people who invest in articles using Hive increases, its value will increase.

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