Some basic mathematics and What the hell are you even doing on HIVE!
Mathematics, a fascinating subject! When we were kids, my father was obsessed with teaching us mathematics. He wanted us to have absolutely pitch perfect mathematics basics. Since I have started thinking about career I was mostly fixated on becoming a doctor. I, as countless others, as you and your next door neighbor, have been repeatedly told like a broken record the Cliche :
"Oh you're going to be a doctor, you don't need to be good at math."
There couldn't be a more fucked up statement in the history of fucked up statements than this!
Anyways, whether (according to society) I needed to be good at math or not, my fathers endless enthusiasm had me eventually become really good at math. And basics never fail you! Basics of math hammers in the concept of logical thinking and common sense into you.
So earlier this week I made a post about where I wanted to be in terms of HIVE power and HBD holding by mid next year. I though I was being conservative, but it seems I was a bit too adventurous when I actually did the math. I am not going to reduce my target by one bit, but I will accept a longer duration.
Speaking of my HBD target, the reason hoarding HBD seems so appealing at the moment is of course the 20% APR...I mean for a stablecoin, that seem like a goldmine! 20%, whew! That's massive!
But is it really?
Now don't get me wrong, I am all for this 20% APR. This was one of the best decisions the witnesses have taken in the past year.
But what if I told you there was a better alternative? No no, come on now! Hold on a second before you start labeling me as traitor to the chain! The alternative involves HBD to the full-est!
Let's do some simple basic mathematics, shall we!
Say you have 2000 HBD in your savings and you are handsomely gathering the payout every month. 20% APR gives you and extra $400 in one year for doing nothing at all (yes, I know. Taking compounding into consideration the final yield will be a bit higher....but we are keeping it simple). That's all more than fantastic and everything and was the exact reason I set myself a HBD target and Have been putting all my HBD into savings...not pausing for one second to look back at it.
But the calculations have slightly changed with the market taking a nose dive into the gutters.
Take my HBD savings for example. I had ~400 HBD in my savings. One year later I would have 400 + (20% of 400) = 480 HBD. Let's say 500 HBD to make it round figure. That insane!
The price of HIVE was around 30 cents this morning, and been around there for a few days now. Now let's just say, THEORETICALLY, I took all my HBD out of my savings and went all in to buy HIVE. Crazy, I know right! But don't worry, it's all just theoretical. I am not pressing the buy button. What sort of crazy person does that, right?!
I'd get more than 1300 HIVE for the HBD I held.
Now, let's say in one year time, the price of HIVE slowly climbs over 60 cents :
Oh wait! Oops! Seems like I did press the buy button LOL!
Now let's do some basic math again.
806-403 = 403.
403/403 * 100 = 100%
That is what people would call a 100% APR!
You might say, well doc...that's not guaranteed. The HBD savings payout is guaranteed.
Fair enough.
You know how many years it would take for your ~400 HBD to turn 800? Roughly 5 years. If you're not backing HIVE's price to beat that timeline by a mile at least, what the hell are you even doing on HIVE!
Posted Using LeoFinance Beta
Go big or go home, eh doc?
Aye aye!
The problem here is the difference between fixed income and speculation.
If what you saw was the case, take all your money out of savings accounts, bonds, CDs, and any other fixed investment and buy Tesla. If the price goes to $380, that is a 100% gain.
Of course, if the price of $HIVE goes to 15 cents, then you lost 50%.
FTX thinking at its finest.
Posted Using LeoFinance Beta
Mathematically you are correct. But that is the beauty of hive and those of us who are long term bullish.
Price tanks to 50%? No problem...just power it up and wait!
With hive, it is all exponential growth. Linear mathematics doesn't apply as it normally should. Because if an user keeps powering up more and more hive...it shows his commitment to the chain and more people start noticing their blogs. Interaction grows...exposure grows - eventually the account grows.
Also, I did forget to mention in the post (I had this in mind, but forgot to write it in) that this is an opportunity only because the HIVE is on a discount at the moment. If HIVE was at 70-80 cents already then it would be a much riskier bet of course. But the way hive price charts have behaved historically, Hive at 30 cents is a cheap buy :D
Posted Using LeoFinance Beta
This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.
Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.
Please contribute to the community by upvoting this comment and posts made by @indiaunited.
I guess the choices appeal to different point of views. Nonetheless, we believe in hive good sir!
It does have a lot to do with an individual’s risk profile, and also whether one is okay to just have hive powered up on indefinitely if things go south!
Every opportunity is always associated with certain amounts of risk, I can't deny that. Hive could potentially go to 15 cents tomorrow and I'd be okay to have hive sitting idly or powered up!
Hive potentially could do that. But id like to echo your sentiment brother. I've been in the market long enough to understand market sentiment a tiny bit. And I am sure youve seen some of my technical analysis to have worked. Not as much of the times I wouldve liked them to. but they did! I can assure you that hive is a better bet than most of the coins we keep a tab on. Thats my two cents on that.
I agree, especially at these prices unless the entire market does an absolute shitshow!