Six Reasons To Hold HIVE

Why do we want to hold HIVE?

This is something that is an obvious question. It is also something that we do not discuss very often. What is ironic is the staking of Ethereum brought out all kinds of articles covering the benefits there. However, this is something that Hive operated with since the beginning.

In this article, we will discuss why someone will want to hold HIVE.

1. The Ability To Trade For Profit

Speculation is one of the use cases of HIVE, like most assets. Throughout the cryptocurrency world, this is the primary use case. Most enter looking to buy a coin or token and watch the green candles take over. Everyone gets excited when the bull market is in full swing. Of course, the opposite seems to be true when the bear emerges.

An increase in asset value is an important component of wealth building. Many attack speculation as something negative or wrong. It is not. This is a driver of markets providing incentive for people to part with their money. They seek a return greater than what they can receive elsewhere.

2. Yield

What got people excited about staking ETH was the fact that not only could people speculate on the price, they could earn yield while doing so. I believe they have a 1 year lock up period which essentially presents a one year money market curve.

HIVE does the same thing. We can power it up to earn a yield. This is known as Hive Power (HP) and increases the value of our holdings (in HIVE terms).

Here is what it looks like now.

We presently are paid just shy of 3% for holding HIVE as HP. This is a not much different from the 4%-5% that ETH staking pays. It might not sound like much, especially not that interest rates have shot up. However, keep in mind that over the last decade, fixed income products were usually paying around 1%.

3. Governance

Powering up Hive has a direct impact upon governance. This means that voting for block producers along with proposals is enhanced as one accumulates (and stakes) more HIVE.

One vital component is that individuals can earn HP through their rewards (more on that in a moment). This means that one has the potential to fill his or her wallet through activity. Most other chains require one to purchase the coin before being able to partake in any type of governance.

Ultimately, this serves as a distribution model that can place Hive in the hands of more people. Other chains are financial based in this regard. Hive incorporates social media activities as providing a path to increased input into governance.

4. Curation

The amount of HP one has directly impact the distribution of the reward pool. Each day, part of the inflation is allocated to content creators and those who support the content. The latter is known as curation.

When votes are placed, they carry a particular value based upon the amount of HP tied to it. The distribution of said amount is on a 50/50 basis between author and curator.

Curation means a great influence over the reward pool. It also enhances ones return.

As we can see, this yields 8.52% for this account used for the snapshot. If we add in the near 3% APR for just holding HP, we can see this comes in just shy of 11.5%.

5. The Ability To Interact With The Chain

Most blockchains operate under the premise of using transaction fees. Remember, they are designed based upon finance. Since Hive is based upon social media, direct transaction fees would not work. Instead, Hive engagement is possible by making an investment into the ecosystem.

What this means is acquiring HIVE and powering up. This provides a backend, non-tradeable token called Resource Credits (RC). As the amount of HP increases, there is a correlation to RC. This is how one is able ot engage with the chain.

Whereas holding ETH allows one to pay GAS fees on Ethereum, HP gives people the ability to write to the blockchain. The difference is the ETH, once the fee is paid, is gone. With Hive, the HP is still in the possession of the individual who had it.

6. The Ability To Create HBD

Hive has its own stablecoin. This is called the Hive Backed Dollar (HBD). One of the ways it is generated is through the conversion of HIVE. Here we see another important use case.

HBD is starting to spread its wings. The first use case is to place it in savings, earning a 20% APR. Here we can see how being able to convert HIVE is an advantage.

At the same time, we are watching payment systems starting to be centered around this coin. It is base layer meaning there is no counterparty risk (only the blockchain). The market cap of HIVE is what stands behind the stablecoin.

One important factor is how an increase in the utility of HBD has an impact upon the value of HIVE. Since this is the primary way to generate larges sums of HBD in a short period of time, if needed, we are going to have to see large conversion amounts. There were many times when the amount of HIVE actually decreased over a specific period of time in spite of the coin being inflationary.

Bonus: Future Use Case

One of the major use cases going forward will be digital assets used as collateral. This is no different for HIVE. It stands to reason that, at some point, a lending platform will be build whereby people can post their HIVE as collateral on a loan.

This ultimately could spread to a host of DeFi applications which require collateral.

In Conclusion

All of this can help to make HIVE attractive. It comes down to the ability to generate a passive return which is enhanced through activity as compared to earning nothing. At the same time, counterparty risk is minimized since all of this is taking place at the blockchain level. We saw the dangers of dealing with third parties such as FTX or Celsius.


If you found this article informative, please give an upvote and rehive.

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Posted Using LeoFinance Alpha



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37 comments
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There's also a Charitable feature of HIVE which makes it easy to support and donate to Charities for "FREE" by just voting their posts. Of course you can also transfer $HIVE with zero fees if you feel inclined to donate directly as well. How many gallons of clean drinking water have been created by $HIVE ?

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Certainly those are features on Hive and use cases. However, that is something that other chains can do, absent the fees if desired.

But we have the ability to change lives with upvotes.

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Just wow!🤔
I've come across some posts like that too

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(Edited)

Holding $Hive is directly proportional to the rising of the price 'cause once the massive availability of it does result to the devaluation,just like when you have your excess candy it get to a point you'd be tired of it and getting tired of it means it decrease in value.

Thanks @taskmaster4450 for giving this wonderful post out. Hoping to have more of this.

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Not if the availability is growing at a rate less than the amount created. For example, the inflation rate, I believe, is now under 7%. If Hive grows at 10% annually, that means there are more seeking the coin out.

People fail to account for growth rates.

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That's absolutely true, the only we can have a change is to have more of this insightful post to let people know reasons to hold, and even to invest by buying massively, I guess Hive is trying so much by the taking a day for HIVE POWER UP.

we need more of this @taskmaster4450 ,thanks once again.

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I'll keep my HP by accumulating more. Holding Hive is for a better tomorrow.

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Earning 20% APR with HBD Savings is the best reason of all.

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As great as the advances across front-ends and communities has been since Summer 2021, I think the biggest game-changer is letting HBD placed in Savings earn 20% annually. This relates directly to how we would have money saved using traditional methods, and HBD held in Savings offers th best return I've seen since I was growing up long ago.

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It is a great feature of Hive. We will see how many take advantage of it.

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It’s similar to what you can earn with Delegation to Cosmos(Atom) on Keplr … 22% APR and SPS on Splinterlands …. The difference is that HBD is much more stable …. Pegged close to $1 USD

There are a few others where you can earn more from Staking but the coins are very unstable…. Osmosis, Juno, etc etc

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It's been long time on hive. But, believe me I still don't know how to withdraw the hive in binance. Also there are so many things which are confusing to me.

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If the ecosystem for HBD takes off, it would be exciting to print “money” 😸

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Imagine if dApps are made specifically for HBD-- a front-end, a game, a dev tool, a wallet, ... -- I think that would be amazing.

Posted Using LeoFinance Alpha

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Interestingly all of these reasons are interlinked working off each other so the growth rate might look slow but it is compounding at a rate that isn't out there without high risk.

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Great points and one that I would add are Airdrops. Let's not forget that Hive holders got Speak Network and Ragnarok airdrops, two major projects that are being built up on this amazing blockchain. And airdrops are given for both first layer and second layer tokens, based on the project participation.

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That is true although they cannnot be counted on in the future. They might continue to take place but buying Hive hoping for airdrops might not be the best course of action.

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Hi there! We would like to invite you to join the newest DeFi community on Hive called IceBreak 🙂

We are focused on web3, NFTs, crypto, blockchain and decentralized finance specifically

Use these hashtags to begin earning IceBreak (BRK) on your Hive posts:
#BRK #ICEBRK #ICEBREAK #ICEBREAK-R #ICEBLK

ICEBRKlogoTiny.png

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This is so enlightening, thanks for sharing
It cleared me of some confusion, thanks🤗

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I have been accumulating hive for the past few month and it has been great, the lover of this blockchain will put hive first.

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Thanks for the article. How do I stake my Hive coins and what is the return? My apologies if this is a stupid question, but I am not that familiar with hive.blog.

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In your wallet there should be an option to Power Up HIVE. Usually iy is located near the amount of HIVE you have.

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These are all great reasons to hold Hive and build for the long term. The combined yield is better than what's currently out there.

The bonus will be a game changer when it becomes possible.

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All great reasons to hold Hive and I would add another reason could be the price fluctuation between US$ and CDN$

!leo

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A big draw for me are these but most importantly the future use cases of it all. I think we will be well positioned in the next few years to take advantage of a lot of benefits in the crypto eco system. Then there’s also the connectivity of us all to share information and ideas. That’s a huge and underrepresented stat of hive! I think it’s much more effective than the crypto Twitter stuff IMO.

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How do you turn HIVE or HBD into spendable currency like USD?

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