Making sense of Hive's tokenomics: Deflationary in Inflation
If we pay attention to Hive price, we must also try to understand the tokenomics of Hive. Unfortunately, most wouldn't pay attention to this, because it seems too complex.
A simple question to ask is: how many Hive was originally minted, and where do we stand now.
This service provided by HiveHub shows the total virtual supply.
The exact value in 2022 is 488,416,253. We are at close to 596,533,565 for now, and we are halfway done with 2025.
According to the Hive white paper, Hive’s decreasing inflation rate is one of its key monetary features and reducing minting over time. The inflation rate decreases by 0.01% with every 250,000 blocks, approximately 0.5% per year, until it reaches 0.95%.
ChatGPT charted this for me. 
What it means is that the inflation rate remains substantial until 2037 when it will stop inflating.
I also asked AI to chart for me what it means in actual terms. It looks something like this below.
The Blue is the existing supply, and the orange is the inflation due to newly printed Hive. The sum of those two in the previous year becomes the blue in the current year. One can see that the orange bit gets thinner, which is how inflation is deflationary is depicted.
The way I make sense of it: If Hive survives and thrive till 2037, whatever Hive we grab today will be highly valued.
How to make it survive and thrive? That's a question for another post.
Posted Using INLEO
There is actually something that must be done to push the value of hive token up actually
a flood of new users coming in would be good. Just need more value coming in to outweigh the value being taken out and the price will be more enticing which could bring more users and hopefully those users will be here for the long-run by having a stake in the ecosystem
Even if the inflation flattens out in 2037 and becomes less than 1%, it is always a percentage of total virtual supply, and virtual supply is on an incremental increase, so the absolute number will still be high. In fact, even with a constant inflation rate below 1%, the absolute number will keep rising YoY.
True that. Thanks for pointing that out. Wonder how things will be like then.
Hive really needs serious adoption to offset inflation and price drawdown. By definition, Hive is a unique blockchain that pays for "unit of labour", not primarily/necessarily for "unit of investment." Therefore, Hive's price dynamics are really different.
We should also appreciate that Hive is doing well since 2016 despite this proposition, but it needs better resilience and adoption down the line to make it sustainable. And the proposition of adoption implies "unit of owner", not "unit of user".
Adoption is going to be bleak. With AI entertaining more, social media is going to take a back seat in due course. Blockchain also takes a break in terms of the overall narrative.
I do agree with that. AI has become the poster boy of digital space and particularly for the consumption of information, even when it happens to be in the intellectual domain.
So Hive has to carve out a niche where it can make an AI decentralized feed data. How AI will behave is contingent upon how data is fed. The digital space hitherto has been a centralized data pool. With Blockchain-based decentralized data pool and decentralized AI, thereof will surely be a long, drawn process. I am afraid the pace at whicha AI is evolving might outpace the the Blockchain based Data evolution and feed.
It has always been the game of trust and time. If hive survives for the futrue generation which I think will happen for sure, the people who trusted in the project will then get rewarded that time.
The biggest barrier for the low cap coins will be the regulations that hits in coming years. I think only those coins will survive to live in the future that becomes the part of regulations and sooner or later crypto market will start reacting as Stock Market that is we will see a similar fashion when it comes to price movement.
https://x.com/lee19389/status/1938351383276589066
#hive #posh
This is really educating about the hive economy.
Fair enough
You are actually correct , that is why investing on hive remains a good idea.