Case For A Hundred Dollar Hive
You must be thinking - "You are dreaming or you are delusional". I sure don't think I am delusional, but I do like to dream. Dreaming is healthy. Many big achievement became realities due to dreaming big and creative imaginations. $100 Hive price would only make it a $37-40 billion dollar network. By comparison, WhatsApp was sold for $19 billion dollars. Obviously, Hive is not for sale. It doesn't belong to one group or entity. It is a decentralized network that many can benefit from but nobody can take full control over. Which is much much more valuable.
Before I start making a case for $100 Hive, let's walk backwards from this price point. If today Hive price were to be $100, each of the top 20 witnesses would be making almost 1 million dollars a month. Backup witnesses would see significant increase in witness rewards as well. Being a Hive witness consensus or backup would become very competitive. This would make Hive even stronger, more resilient and more decentralized. This price point would also provide decent amount of resources for witnesses and make Hive scale even better.
By the point of reaching this price point, the distribution of Hive coins would be more decentralized too, just because many would take profits at some point before getting to $100. This wider distribution of coins will make even smaller stakes matter and worth competing for their votes. Participation in governance would increase and be more decentralized.
If the amount Hive coins in Hive Decentralized Fund remain same by the time Hive is at $100, it will have $6 billion dollars to fund all kinds of developments. And it will continue replenishing itself with funds from the inflation. This amount will be very attractive for many developers and competitive to get proposals approved. There would be many projects to choose from and most will demonstrate great skill sets, experience and past projects to showcase in order to win community approval.
At this point, curation and author rewards will be in billions annually. But by this time there probably won't be a need for content rewards in native Hive coins and content rewards will shift to community and app based tokens, which will also see massive increases due to Hive's success. All of them will compete against each other in proving the best experience, economy to its participants. But also, all of them will learn from each other's experience and perhaps even cooperate in certain goals and ambitions.
Now let's see how we can get there. Hive being an open network and multi-purpose blockchain with many unique features that many other blockchain efforts haven't been able to replicate yet, there are many paths that lead Hive to $100 price target. One of them is through HBD as a stable coin and as a fixed income asset. Taskmaster4450 wrote a very interesting post yesterday on this topic - HBD Savings: A Simple Exercise In Wealth Building, where he explains in details how compounding 12% annual interest would create enormous amount of wealth over a longer period time. This strategy might not be attractive for those who are used to seeing 10x returns in a year or two in crypto. However, it would be of great interest for investment fund managers who utilize these kind of strategies all the time, at least for diversification purposes.
12% annual interest rate on a stable coin that is pegged to USD, one of the strongest fiats in the world and the world reserve currency is not a small thing. Now consider I am an investment fund manager with $10 billion dollars under my control, and I want to allocate 10% of my funds to very low risk but high return asset like receiving 12% compounding interest annually. That means I have $1 billion dollars to invest in HBD. But the entire Hive network is billion dollars worth and it only has $24 million HBDs in circulating supply. Where am I going to get $1 billion dollars worth of HBD.
I know the secret that nobody knows, I can buy as many Hive coins as I want or are available in the market and immediately convert them to HBDs. Of course this would require a certain strategy, not to move the Hive prices too high too quick. Since I am only interested in HBD, what price I buy Hive doesn't matter. I will be converting every purchased Hive into HBD. So each USD worth of investment will retain its value in HBD. In fact, if planned my strategy properly I will end up buying my initial HBDs at lower prices and make quick profits from the beginning.
By the time I get to the point of spending all of $1 billion to buy Hive and convert to HBD, price of Hive will go so high that its market cap will be in tens of billions of dollars already. Once my colleagues get the word of what I am doing, they will find out this is a good strategy for them as well. They will allocate some of their funds too. And soon enough one Hive coin will be worth $100 and perhaps keep goin up higher, because many more fund managers would to be in action as well.
When it comes to taxes, HBD is not recognized as a currency, it is a property and an asset. So any profits from HBD would be taxed. However, since most likely each HBD purchase will cost $1 and liquidating them at the same $1 would mean there were no profits from trading them. Ok, yes there may be a tiny bit of profit or loss, but nothing major and can easily be managed. The 12% annual interest though will be fully taxed, just like any other capital gains income. As a fund manager I am ok with that, because I would pay these taxes if I invested elsewhere too.
Khaleelkazi and Associate have been talking about HBD and its benefits as of late too. They have interesting ideas regarding HBD. Watch HBD is Starting to Become an Attractive Algorithmic Stablecoin from yesterday to hear some interesting opinions about HBD. They also mentioned another stable coin that is offering 20% interest. I don't know much about it, but it does look like there is a competition for HBD. HBD paying out 20% is highly unlikely in my opinion. But wow if that happens, $100 Hive may come even sooner.
Let's look at another path that may lead Hive to $100. Hive has awesome tools for community building. We need to understand couple things here. Just because we are in a decentralized space, doesn't mean communities must be decentralized as well. No, communities can choose whatever structure they like. In the beginning the most efficient way is to take centralized model that turns into decentralized as it scales. It is up to the community builders and communities themselves to decide what works best for them.
But at the same time, if these communities are going to tap into Hive reward system, they may need to consider the bigger Hive community's vision and how they can offer value back as well. Cooperation is the best way, and it is most advantageous for these communities too.
One of Hive's unique features is that it is a giving network. While hundreds of blockchains and layer-2 projects on other blockchains trying to sell their coins/tokens, Hive is offering its native coins to all global talents. Of course these Hive coins aren't just given out for free, they are distributed using proof of brain methodology in return for value all participants bring into the table. Often it is just for doing ordinary things people already do elsewhere for free.
So do we build a successful community that can take Hive price to $100. It can be any kind of community. For this example let's say I want to build a community for those who are interested in Movies & TV. Something like CineTV. Before I start building this community and bringing like minded people onboard, let me tell you about two network laws to help me make my point clearer.
First, Metcalfe's Law:
Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n^2).
Within the context of social networks, many, including Metcalfe himself, have proposed modified models in which the value of the network grows as n log n rather than n^2.
In other words, it describes exponential growth of the network by each addition of participant. To simplify, I view it as value the each participant brings to the network, because the growth is not linear.
Second, Beckstrom's Law:
Beckstrom's Law states in summary that "The value of a network equals the net value added to each user’s transactions conducted through that network, summed over all users."
The value of the entire network is the summary of the value to all users, who are defined as all parties doing transactions on that network.
This focuses more on the value participants get by participating in the network. I used think of these two laws separately. But it started making sense more once these two concepts are combined. As more people see value in participating in the network and they do get actual value by doing so, they also bring value to the network. Hence, network grows continuously benefiting both the network itself and the individual participants.
Back to the Movies & TV community. I chose this as an example, because I think many people like movies and tv shows. Digital streaming platforms are on the rise. Netflix was the pioneer in the space, but now there are many like Hulu, Disney+, HBO+, Showtime, Applet TV+, AMC, Paramount+, Amazon Prime Videos, etc. Why so many pluses? More and more people are turning away from cable tv and just going with individual subscriptions to streaming services that they can cancel anytime and rejoin anytime. They bring more convenience. But there are so many of them too now.
A couple of weeks ago, I wanted to watch the new Matrix movie. It was available on HBO+. I didn't have a subscription. If I were to subscribe it would only be to watch this movie, then I would have to cancel. I had a brilliant idea. Why don't I subscribe, write a post about the movie and Hive will pay for my subscription. The post ended up trending and now those rewards will pay for the full year of HBO+ subscriptions.
So for my community there are hundreds of millions potential members globally. I just need to build a team of likeminded people to get it started. The community will have rules and roles. Anybody can move up to various roles based on their interest and participation. One of the benefits and value this community will provide to its members is pay for their streaming subscription of a choice or even multiple of them eventually. Just like hive participation and proof of brain methodologies would apply. But it would be much simpler. Nobody will be expected to become movie reviewers or bloggers. They can if they want to, but they can contribute in other ways as well.
How will the community pay for these subscriptions? Hive will pay. lol. Initial group of members will have to sacrifice some time and efforts and dedicate portion of their rewards to the community as beneficiaries, and decide how and what to do based on community rules and overall consensus. As more members join they will also contribute with their works and beneficiaries. After all this community is not about getting rich, but to enjoy all things Movies & TV. This will require establishing relationships with the overall Hive community, curation teams, tribes like CineTV, etc. While it would start small with helping people getting their streaming services paid, as it grows the power and abilities of the community would grow as well to support even more who enjoy movies and tv shows.
How is this going to get Hive to $100. Price number is in participant base growth. They way this community will pay back the value is by its numbers. While many will join for movies, some will discover other beautiful things about Hive too. One of the metrics investors use for any social network is its user-base, I like to call participant base, since we are a decentralized network and all are owners. Success of one community will translate in success of other communities as well. Those who came for one community, may find other communities interesting. And when one community sees certain models and economic structures working well in other communities they would implement the same or even improve on.
I do see huge potential in communities and community building on Hive. Not just for rewards and getting rich. No. Just for doing thing people already enjoy doing. One of the frustrating things for any new person to Hive can be that, they may feel like they are not really enjoying what they are doing. They see no value there, so they leave. Lose/lose. But when you do things that you already enjoy doing and would be doing else where anyway, that is where the winners will be born on Hive. It has already been happening from the start.
You all could have been anywhere else, but you chose to be here. This is true success and step by step it will grow into something much bigger. Would I participate in building this community. Probably not. I am not greatly into movies and tv. I do enjoy them. I would be a member, but probably not the active one due to other commitments and obligations. I hope I was able to present the case with communities. If not, I will try to do a better job next time.
Another path and really powerful one is the Apps and Games. We already see this happening. Look at Splinterlands. Now Ragnarok coming, more games already available and many more being developed. Apps are being built on Hive. It will take one or two killer apps to take us to $100, for one due to the participant growth, and second demand and interest for Hive itself. Speak network is even going beyond just apps. They are planning to create a network on top of a network with great utilities and economic incentives in place. Just amazing. I was planning to talk about this in more details. Since this post already got too long, you probably stopped reading, I will postpone my thoughts on this path for the next time.
What are your thoughts? Do you think Hive at $100 is possible? What will take us there? Share your thoughts in the comments.
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