Hive Ecosystem | Reasons To Buy Or Sell Hive ...
To start off, I want to say that I still love the Hive Platform after 8+ years on it despite all its flaws. It gives me a home on the internet, and I enjoy writing while at the same time the main reason for me to have a blog is because it helps me stay sharp in my betting & crypto activity. I don't rely in any of the earnings and just continue to compound everything into the ecosystem. It is nice to know though that if I wanted, it would be possible to power down and convert my stake or partially take profit even though I have no plans for that especially at the current price level.
The Hive Price...
Basically, November 7th 2022 marked the bottom of the Crypto Bear Market as BTC reached a low of around 16k $ befors it started to go 7x to now 110k$. At the same time, Hive started at a price of around 0.288$ at the start of the bull market and now is at 0.200$ which is -30% in value ever since. This needs to be taken with a grain of salt as purely passively when having it powered up you should be able to get 10% APY getting your part of the inflation so 100 Hive in let's say 3 years would turned into 133 Hive.
This still made Hive a Losing proposition even against the dollar and it got absolutely crushed against BTC losing 93% .
Even though things went down, it still kind of is impressive that Hive manages to somewhat keep up and not go toward zero as many of the other projects out there
| Project | Price Bear Bottom | Price Now | Difference |
|---|---|---|---|
| DESO | 11.7$ | 6.09$ | -48% |
| STEEM | 0.235$ | 0.131$ | -44% |
Why Is The Price Down?
Fundamentally, there is more Hive for which the Sell button is pressed compared Hive for which the Buy button is pressed, it's that simple. There fact that more Hive was created as a dynamic to keep HBD at peg by HBD Stabalizer also has been a big factor as it made inflation run much higher than projected in the past years.
Reasons To Buy Hive!
Speculation Price Pump: In the end, everyone is in crypto not only for the decentralization aspect, but because they want to make money and see number go up. It is not unthinkable that there will be an altseason which Hive is part of, and where the price going up creates a positive feedback loop spiral. If the demand for HBD would increase as it has proven to maintain peg, this could create a flywheel effect where Hive gets burned to keep the HBD price from going above 1$.
Dapps Needing Resources: Hive has shown to be a blockchain that is reliable for dapps or games to run on even though their is the downside that it's not really connected to the broader crypto space. If new projects come in to build, they would need hive the power their operation. At the same time, I don't really know any of these that could be buyers at the moment.
Users Needing / Wanting Power: If you want to use the Hive Blockchain as a user, you need some Hive which gives resource credits to do some basic operation. However, the amount you realistically need is not much and it' won't really move the needle. Having more Hive Power does make your vote worth more which makes the entire experience more enjoyable as you are able to reward the interactions you have on the blockchain.
Passive Returns: Basically, you can lease out your Hive power while also receiving some passive staking earnings, which combined could be a bit higher compared to the inflation.
Self-Upvotes: Even though this often is frowned upon, as a content creator, especially those who start off or are struggling to get something going, I would say it is a good thing and a selling point for Hive that you can reward yourself a tiny bit with an upvote. (as long as it is kept within reason with content where work is put into and limited in numbers)
Upvote4Upvote: While it is also frowned upon, it's just reality for many that the only real way to get some consistant earnings on your own posts, is to have a ton of Hive Power and upvote other users that are good for Hive making quality content while holding a lot of Hive Power who return the favor and also start upvoting you. I personally don't really have a problem with this right now but in case there would be a bull run it needs to be kept in check for sure as it's just not good to have a platform where only the ones with power have the ability to really get something going.
The Patreon Model: This is more an idea on paper that Hive allows you to invest in the platform while supporting your favorite content creator as people do on Patreon with the difference that you keep owning your investment in the platform. I honestly don't think anyone actually bought Hive to do just this for any of the content creators on Hive.
Community Building: In theory, someone who would want to create a community on Hive here around a subject they are passionate about. They could buy a ton of Hive Power and use that to reward and build that community. However, what this mainly would do is attract people who pretend to care so they get their share of the upvotes so it's hard to really make this work and I don't see anyone actually doing this.
As A Currency To Buy Things: For example, if you want to get into Splinterlands and buy some cards on the market, you could buy Hive on Binance and use that. However, this is just a net neutral transaction as the Splinterlands team will use their DEC bag in the background and just Dump the Hive back on the market to pay for their Salaries and the cost to run the game.
Overall right now, I just don't see enough valid reasons to actually buy Hive as it is highly speculative, there don't seem to be any new projects developing that will need to buy Hive, there is HBD, which is giving high yield but it comes at the cost of the Hive Price, As a passive investment, you are basically just keeping up with the inflative, and to actively use it as a blogger to get better earnings it's frowned upon by many.
Reasons To Sell Hive!
Speculation Price Dump: The trend is pretty clear, as it has been down only. As someone who has been here consistently since 2017, I pretty much saw almost everyone who ever started eventually leave and never return. The reality is that blogging on Hive is something only a very niche audience is able to do consistantly. Most come with an eye to earn and start a blog while few actually come with an eye to start a blog and maybe earn something along the way as a side effect.
Blogging2Earn: I would say that most people who come into Hive are seeing it as a social media platform where they can earn something for their activity and also use it that way without any intention to put any money in but with an eye to withdraw what they earn. Right now, there is a lot of free lunch on Hive as most upvotes are done by curation projects that hold the majority of the upvotes and it is fairly easy to extract value from them if you are willing to bend your way.
HBD Stabalizer: So from what I understand, in order for HBD to stay stable at 1$, extra Hive is created and sold to buy and destroy the HBD when it's trading below the 1$ price. So the 15% APY that is given for those taking the risk on HBD directly comes from value that is sucked out of the Hive Price. In theory, this could reverse in case the demand of HBD becomes bigger than the supply. To me, it all kind of feels the same as Terra Luna in a way in the it works until it doesn't anymore even though there is a failsafe that no extra HBD will be created in case Hive goes below a certain price.
Low-Income Country Users: This is kind of similar to Blogging2Earn Users as Hive seems to be quite popular with people from poorer countries who can easily make a good living here, and I totally get it. However, this generally hurts the price of Hive as most if not all will be cashing out to pay their bills while few to none will have a lot of money to put in.
Many users seeing Hive as a cash cow, and some curation groups currently give a lot of free lunch. this while HBD needs to be kept at peg which comes at the cost of hive creates a systematic sell pressure that is right now even at current prices bigger compared to people willing to buy hive.
| Last Hour Sells (Binance) | Last Hour Buys (Binance) |
|---|---|
 |  |
| Total: 20914 Hive Dumped | Total 5163 Hive Bought |
Possible Solutions
There is no easy solution for the issues Hive has suffered from since forever. In a way aside from the price, everything is also kind of operates properly still. To get the price up, we need more new users who are willing to actually buy Hive, give less Hive to users who are only really looking to dump it, and increase the demand for HBD without it expanding the supply too much because of the 15% APY.
I would say everything starts with those who have the power to cast the upvotes and direct the inflation. The value extractors and High KE Ratio users simply need to have a way harder time to get upvotes (unless it's from individual whales who like the content and want to reward it). I would say it's mostly the curation groups who give free lunch that need to take notes from what Splinterlands is doing with their curation (Link)
What I can do better is likely to share my content on other social media like Twitter, which might direct a bit of traffic to Hive and maybe convert a couple to becoming a user. I'm not sure at this point if I'm really wanting to put more outside money to grow my Hive stake more even though it is tempting at the current price level.
Conclusion
If anything, Hive needs a mentality shift by the users in that it's not a platform where you come to blog and earn money as that is a recipe for things to go to zero. Instead, the mentality should be that you both give some and get some and only really a part of what is earned can be seen as earnings that can be taken out. honestly, I have no clue where things are going from here as I can see both a scenario where things just continue to trend down and a turnaround which creates a positive spiral at some point where 0.2$ felt like an absolute steam and easy money for those who are active on this platform right now.
There are so many things that needs shifts and we will get there soon, hopefully. Everything is okay as long as we don’t do it too much.
!PIMP
@hopestylist here!
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The hardest thing in "crypto" is to do nothing and not be greedy.
Some really great points and a good overview. I didnt think to check the Binance buys and sells, it can give a good picture of whats happening.
From my previous analysis, with these low hive prices, the DAO % becomes the most dominant part of the chain, although this is obscured by it being mostly in HBD. Worryingly, usually you would want to see any DAO decrease over time, not increase.
The sad thing about all the withdrawals and the dumping is that they are happening at this low of a price. If anything, it just indicates the mentality and perception of how Hive is a platform where users come only really to earn with no real intentions to really contribute (aside from content which doesn't really do anything to keep the Hive Price up)
@costanza, are you by any chance coming to KL for HiveFest? I'd love to get to know you in person
I'm one of those people who hates social events and rarely travels, so no chance of seeing me at Hivefest :-)
It's one of the things I enjoy about hive though as it allows me to socialize from a safe distance. Enjoy Hivefest !
The incentives on Hive are not there to build HP for the long term- there is also a disconnect between once you earn somethiing, it should be yours to withdraw or power up.
The rule about earnings should be that ultimately they are yours and you are able to do with them whatever you want. However, those with no intentions to contribute aside from content (unless they are upvoted by individual whales who like what they bring) should kind of be cut off from being able to just extract value. The only way that the model is going to work is if it's a 2-way street where users give and you get. With the shift from bid bots (which also were bad) to curation projects, Hive kind of got screwed up in a way as there is no real incentive to power up since most curators also only really care about what they can earn and stick to just upvoting the same list of people who bring content that looks ok.
It remains the eternal issue of this post2earn model as 90%+ of the content would never be there if it wasn't for the potential earnings.
i think really only a v4v system will be sustainable in the future as otherwise it would be constant extraction games, like with all cryptos.
The more I look into it, the more insane it gets how all these curation projects somehow are upvoting major value extractors who obviously only post just to get the upvotes. It's quite depressing.
And thats the smallest part of the pie! LOL Then there is the HBD interest and DHF for the whales.
Being pretty new to the ecosystem and can't really judge what needs to be done exactly a utility perspective to make HIVE more valuable, yet, although I've read a lot of opinions on that topic.
From a rather outside point of view, though, it's pretty visible that there's simply too few users. Crypto to this date is mostly about speculation, and there's no reason for any potential investor to believe that price will go up dramatically, as there's no catalyst for doing so. Smaller changes in utility won't really make a difference. However, integration of Hive blockchain in a product with millions of users would. Is there any entity that would look at developing partnerships or whatever of this kind?
Yes, there is. OffChain Luxembourg is using Hive as an "alternative bank" and the underlying platform for two projects, Innopay (innopay.lu) and plaza.lu that should generate demand for Hive
There's simply too few users
I would say that Hive also has an issue of retaining users. As someone who has been here since 2017, I only really saw a handfull of users stick with it. The thing is that the real audience (who aren't just here with an eye to earn a quick buck) is rather niche. That said, there is still so much potential for onboarding new users. Good luck on your journey!
People don't stick with Hive because we lack a coherent uplifting narrative. If you want people to adhere to a platform like this (id est: one that does not manipulate their dopamine mechanisms in order to generate addiction), you need a uniting story. And we don't really have one, or if we do, we do not have a good storyteller to be the face of that story
From what I've seen so far I totally agree, but I'm not sure this can be solved on a blockchain level. After all, what's the difference, really, between Polygon, Sui, Sei, Solana, Aptos and all these chains. It's basically all the same, they start with something, but then have to expand into basically anything and everything because there's so few actual use cases. But a few things unite most of the (successful) blockchains: they do consistent marketing and business development for their chains to attract developers who build on them.
Yep, we are incredibly inept in that sector.
Our marketing and development is mind-blowingly inefficient.
It doesn't even focuses on the right metrics. It focuses on bringing users to BLOG instead of focusing on bringing developers that create apps that give their users REASONS to BUY HIVE.
Which entity is running this? Maybe there's potential for improvement?
Very good analysis. There is one thing that gets overlooked though : the time dimension. Hive is at its best as a banking system, because of the HBD and the 0 fees. Banks now make most of their money from creating new money but back before Basel II when we were still in a "fractional banking system" banks made most of their money from the time difference between when the money entered their systems and the moment when the money exited.
Definitely agree with all the recent chatter about the KE ratio. It's one thing to reward a brilliantly written and viral post, but let's be real, those are few and far between.