RE: Perplexed Investors in the Hive Ecosystem
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Hmm, what is the main cause you dont find hive and other hive coins to be a good investment. Dont you think this 20% APR will bring more investors to invest in #hive.
If in case you know some better coins for investment, I need your review about those
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The 20% interest on HBD drives people away from HIVE. HIVE has been hemorrhaging users ever since the rise in interest prices.
The HBD interest comes from HIVE. When people press the convert button, the system will destroy the HBD and generate HIVE. The conversion formula means that HBD is just HIVE in another form.
HBD is a derivative as its value is derived from HIVE.
Because the value of HBD is guaranteed by HIVE, one must think of the two currencies in tandem.
The system generated $136,000 in HBD in March. If people converted the March interest to HIVE, then the system would generate 438,000 HIVE.
BTW: The 20% interest on HBD costs more than 20%.
Users tend to stack HBD when they feel the price of HIVE is high. They convert HBD to HIVE when the price of HIVE is low. One can prove this because the market cap of HBD rises when HIVE is high. The market cap of HBD drops when HIVE is low.
One can prove also prove this by examining the HBD to HIVE conversions. It takes longer.
HBD is Debt
HBD operates like debt operates in traditional companies. It is common for businesses to go bankrupt when the debt is high. People who invest in the Stock Market routinely evaluate the debt structure of companies. Companies with too much debt on the balance sheet go bankrupt. When companies go bankrupt, investors lose their money.
People who understand the negative costs of debt avoid HIVE like the plague.
As for the HIVE Engine Coins.
The HE cryptos are all based on HIVE. Most of the HE coins fell by 90% after the decision to raise HBD interest o 20%. The decision to raise the interest on HBD devalued the currency of HE. It also left the tribes in a terrible situation where none of the tribes could compete against HBD.
The twenty percent interest on HBD was one of the worst financial decisions that I have ever witnessed.
Informative, What you prefer other crypto coins for investment?
Cryptocurrencies aren't backed by soft assets. I am not sure if I would recommend any as an "investment."
I buy crypto currencies based on what they do. I bought HIVE and HE tokens because they increased the value of my upvote.
I don't consider HIVE an investment because I expect the value of the coins to drop with time. Sadly, the price of the coins tend to drop faster than the inflation in the currency/
HBD is the only thing on HIVE that performs like an investment. It is backed by a soft-asset (the price of HIVE). Sadly, HBD can set up a death spiral in HIVE. The death spiral will occur the price of HIVE falls dramatically.
If you invest in HBD; you need to watch the price of HIVE and be prepared to pull it. It takes 7 and a half days to withdraw from savings, convert HBD to HIVE. You will then be dumping your HIVE on a collapsing market. It is possible to lose the HBD.