What Gives HBD Value: Payment System

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This is the third part in our series of what gives the Hive Backed Dollar (HBD) value.

There previous two sections covered:

Each of these are part of the advanced financial system. As we saw, these markets are enormous. In that realm, the numbers easily get into the trillions of dollars.

This is where HBD can really establish itself.

Of course, advanced is not always required. Sometimes focusing upon the basics is vital. Here is where the third use case enters.

Fortunately, it is another large market.

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$1.9 Trillion In Payment Revenue

The global payment market has revenues of roughly $1.9 trillion. To show how large this is, if it were a country, this would rank in the Top 10 in the world.

Here we see where the industry is ripe for disruption. People pay almost $2 trillion in fees just to send money around the world. It is a highly lucrative busy, something that cryptocurrency can target.

With hundreds of trillions of dollars of monetary exchange taking place, inserting HBD in this arena is very desirable.

Here is where we see the concepts we are discussing moving from financialization-to-commercialization. When people start using HBD for their business and personal purchases, then it becomes evident how a shift takes place.

We now start to get involved in the process of real wealth.

Products And Services

Real wealth is the development of products and services. This is where many seem to go awry. Money is not wealth but, rather, a tool to produce wealth. Tying HBD to wealth is crucial.

Obviously, we do this by getting involved with the commercial applications. When people are receiving HBD as payment for goods or services, it becomes a vital part to the economy. If we look at this in a hierarchical form, this is base layer stuff. From an economic standpoint, it is the baseline which all other factors, including those mentioned in the previous articles, expand from.

Fortunately, HBD has a unit of account that most understand. One of the things that makes the USD so resilient is the fact that 4 generations of people walking the planet grasp what a dollar is. We spent our lives hearing about it. Even if we utilize another currency, much of what our country does still is denominated in USD.

HBD is piggybacking off this. It is not backed by USD, only the accounting mechanism. This provides everyone with instant familiarity.

Elimination Of Banks

Cryptocurrency was designed with the intention of being able to operate without the banking system. When we look at the graphic above, we see where the banks are firmly established in the payment system. They are the intermediary for all payments. This is something that is very costly.

The $1.9 trillion is coming out of consumers' pockets. While much of this is paid by merchants, those fees end up being passed on in many instances. Of course, when people are sending money themselves, especially cross border, the "rent" comes out of their wallets.

Here we see how all of this is eliminated with cryptocurrency. HBD is a base layer coin which means that it has no third party. There is only the blockchain and the wallet holder. Since transactions are peer-to-peer, HBD can be sent from one wallet to another, with zero cost. On Hive, there are 3 second transaction times along with fee-less sending.

This could be a major disruption to the banking sector and all its arms including PayPal and Visa. The ability to operate without banks is vital since they serve as rent seekers and little else.

Growing The Hive Economy

If money is a tool to generate wealth, what role does HBD serve?

Ultimately, the goal is to grow the Hive economy. This means expanding the ecosystem so that we see value increasing over time. This is done by putting money to work to create products and services people utilize.

One of the key ways a currency does this is in the payment of labor. We are all familiar with getting our paychecks. This is paid in our native currency, giving us money which to spread through the economy. With this, we pay our bills along with some discretionary spending. Thriving economies see the entire pie expand through innovation and technological advancement.

Since HBD operates in the digital realm, it is able to leverage the explosive growth potential that exists. We can see the use cases for the coin expand as more games and applications are developed. This also ties into the idea of online shopping whereby merchants accept HBD as payment.

Money is the foundation for any economic system. Having a fast and dependable payment system is essential. We see this with Hive. The fact that no external wallets are required also reduces risk. Friction is removed from the system as payments are direct. Without fees, we see a great deal more money available to merchants and application owners.

In the end, the health of the economy comes down to how often the money is flowing through a system. When there is a liquidity crisis, economies enter recession. The reason is people are fearful and holding onto their money. Thus, purchases are not being done at the same pace. This causes economic slowdown.

Basically, as the Velocity of Money slows, so does the economy. It is something to be mindful of with HBD.

Derivatives Strengthening HBD

As mentioned in the article about derivatives, these assets can enhance the value of HBD since it is what they are tied to. In the payment realm, they can also provide value.

For example, we have a HBD derivative called pHBD. This exists on the Polygon blockchain. Since it is a 1:1 backing with HBD, it also operates utilizing the same unit of account we are all familiar with.

If, however pHBD started to be used for payments, we see the reach of HBD expand. Even though transactions are taking place in another currency, it is still tied to HBD. The main asset has to exist somewhere. Therefore, as the value (utility) of pHBD grows, this rolls over, in part, to HBD.

The international banking system does this all the time. There are trillions in payments made between financial institutions that are priced in USD yet go outside the established payment system. Instead of utilizing normal channels, one bank will simply enter an agreement with another bank to send the money, say $1 million, in another form. For example, they might send over 3 month LIBOR futures as settlement.

pHBD and whatever other derivatives that are created could be used for similar purposes. The key is having them tied to HBD. If that happens, a lot of inherent value is fed into the main coin. This also creates a great deal more resiliency.

Increasing HBD Transactions

The key is to increase the number of HBD transactions. Here is where we get to the core of it all. For a currency of this nature to thrive, it has to be moving around. This means developing use cases where the coin is accepted as payment.

With trillions of dollars traveling around the world, in all its forms, we can see an enormous opportunity. There is almost $5 trillion in global e-Commerce alone.

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Source

This is a number that will accelerate even beyond the predictions depicted here if cryptocurrency really starts to take off. The amount that will be spent on applications and games probably will increase the growth rate.

Once again, with more money, we will see real wealth, i.e. goods and services, continue to grow. Since cryptocurrency is the money of the internet, this will help to feed the expansion.

HBD certainly has a role to play in this. Making it part of a fast and feeless payment system holds real advantages. There are trillions of dollars at stake and we need to develop the use cases to take advantage of that.

What are your thoughts? Can you see HBD becoming a valuable payment mechanism?

Let us know your thoughts in the comment section below.


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

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Here is the CEO of FTX who talks about how Bitcoin failed as a payment network.

https://financialpost.com/fp-finance/cryptocurrency/ftxs-billionaire-chief-says-bitcoin-has-no-future-as-a-payments-network-ft

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Here is a key point:

FTX Founder and Chief Executive Sam Bankman-Fried told FT that “proof of stake” networks would be required to evolve crypto as a payments network as they are cheaper and less power hungry.

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Good post, I'm back you have my vote.

I made a new post about Terra luna, in case anyone thinks of becoming a millionaire

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This is a great example of what a comment should not be. lol. Sorry, a couple of days ago we discussed one butterfly)

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If you can find someone who will trade HBD to Canadian Dollars in its fiat system, contact me in Discord.

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Excellent post, you have my vote.

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May I ask what exactly, for you, was good in this post?

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Hello @barski Sorry for the delay in my response, I was a bit away from the platform due to having a lot of work, my approach in relation to HBD is because I consider it to have many possibilities for fast and effective economic transactions

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If we can have games developed on Hive with HBD tied to it as the transaction currency it will do a lot of good in giving HBD that payment use case that is really needed.
Also getting HBD on a thriving market place could have it standout amongst other stablecoins out there.

Much depends on what is build on Hive to accommodate HBD.

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Gaming is a powerful building area. We know how popular they are and the money that is tied into.

HBD as the purchasing currency would really provide great use cases.

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That would be a very good starting point because dollars/credits or whatever people use to purchase things is different for all games. Of course, having it just an option is good enough for people to look into it.

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If I recall correctly HBD for purchase of items will be the case for Ragnarok, that is a good starting point.

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This is where HBD can really establish itself.

This is good, but some people say that the 20% APR interest on a stablecoin is unsustainable. What do you think about this? Can HBD keep 20% APR (or even more) interest in long term?

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Simply figure out how many HBD is out there versus how many could be needed. So if you want a billion HBD, the 20% is not only sustainable, it is probably too low.

So yes, the expansion of HBD can take place at a strong rate for a long time.

Here is one article detailing how it is sustainable.

https://leofinance.io/@taskmaster4450/hbd-20-interest-is-sustainable

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Actually I read and I even commented under that article one month ago, but somehow I forgot it. So it is sustainable. Then more and more people will earn a living (or at least a very good income) with it, if they put enough money into HBD savings.

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I totally have high hopes for hbd and see it becoming a valuable payment mechanism in future. Why? Because the infrastructure seems best fit for it

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The infrastructure is a huge bonus. Here is where we see how Hive's technology can really come to the forefront.

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I feel Hive getting accepted in small shop would be a good start. I think small use case end up creating a good demand from the market. But often people ignore that because everybody wants big banks to adopt specific chain. I'd love to see Hive being accepted in Hotels, Stores etc.

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We need to start online. Get a few games on Hive along with some different stores to accept it here. This is the first step. That is how early we are.

We do not even have this in place at the moment.

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Things are really getting interesting. If the value of HBD increases through mass adoption does the value of Hive increase with it? With the many advantages mentioned on this post, HBD can be a top player in the payment landscape. If HBD gets traction it could be integrated into major ecommerce sites as a payment option.

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I am guessing it would probably help if HBD were easier to get your hands on as well. I would set up a bi-weekly buy in something like Coinbase if it was available there. The problem is they would probably do some kind of wrapped HBD on the ETH network and the gas fees to move it over would be nuts.

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That is the idea behind the pHBD-USDC liquidity pool on Polycub. We know there is going to be a LP on Cubfinance. So yes, the lack of liquidity is a problem at the moment.

So we are back to the chicken or the egg. We still need use cases other than just creating more HBD. That is the point we are at now.

Soon we might see that changing. Hopefully people are starting to think about how to integrate this into their applications.

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I think Ragnarok will give us a pretty good idea of how that is going to happen if something else doesn't come along before that.

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Yes. I don't know of a more perfect payment system, but unfortunately there are people who have invented engines that require no fuel other than water, or heating systems with penny costs for heating houses, but as a rule, their inventions are the enemy of monopolists, and the financial system of the Hive goes against the interests of the fiscal authorities ... although, if desired, it is very easy to control debit with credit.

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That is true. The best tech doesnt always win and becomes a target for powerful players.

It is why we have to keep building all the different areas. This is where the value is built which becomes resilient.

Shortcuts will not do it. This is a process of infrastructure building and expansion. We need to take care of this while flying under the radar.

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I think maybe that's what. as you said, we fly unnoticed, which is a great boon for us at this stage. It is not known what undue attention may turn into.) Although, I really want many new members to join the Hive.

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Can you see HBD becoming a valuable payment mechanism?

If there was a project devoted to making HBD available in card form like Visa, I would agree. At the moment I don't see any projects.

Actually I think there is one project for website payment option. One project. Not very publicized. I don't even remember the name.

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(Edited)

It remains irrefutable to find use case for HBD because increasing rapid payment options as HBD serves that purpose.

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Yes if we're realistic most crypto coins won't ever be accepted as payment vehicles. That would be the best use case hence the term in it currency. However for the most part it's just a way to speculate or hold the market at a value until you can get back to speculating which is the real purpose of a stable coin instead of being a payment system.

Speculation is not a use case outside of a gambling casino, lol. So my theory is that projects here like bitcoin myk and bbd coin have the missing link. So i'm incentivized for 2 reasons to use fiat currencies..

Reason number 1

Wide acceptance. it's valuable because every merchant will take it as cash. is hbd or hive widely accepted? absolutely not. So for the most part it's a worthless payment token which then means doesn't really have a use case unless i want to tip someone for a blog

Reason number 2

The next part is i'm incentivized to use it because it's less risky to keep my value there. So if you go to work or you have some priceless item you just sold. The cash conversion will be one in which you want to hold that value atleast long enough to spend it. So just for example i sell something for hive.. okay i can maybe convert it to cash if the market of the good isn't too big hence enough liquidity. However it would just still be more wise to convert it for some fiat currency.

So incentive wise bitcoin myk and bbd coin gives people the citizen's dividend from the fee structure. meaning at some point in the future most people would opt to use it because the network itself values your acceptance of it. So to have significant payment systems and gateways meaning to other products, services and or merchants. These people would need to be incentivized to hold the wallet to accept the currency that's why foundations in crypto often times setup workshops to incentivize businesses etc., to use their currency and we do the same through the citizens dividend.

Doge coin has more value than hive or hbd but even in having more value people will never get beyond it's not a currency or payment system and because it holds value.. holding value as an aset in this regard has less holders which means it has less payment gateways to make it the most effective currency.

So in other words how do you get the wallet holders if you can't get them now in an oversaturated cryptocurrency market where several coins are doing the same thing but are more valuable and more secure ... so where do you standout? The answer so far is you don't.. you don't have the citizens dividend or a way to bring in and incentive new users.. Paypal had a big campaign that gave people free money the first several years to use the system.

So if i can'r even relay simple ideas like this for you all to take a look at products like bitcoin myk and bbd coin on hive. I don't quite understand how you all believe you're going to build some game or otherwise that's going to get people accepting hbd.. i just don't think it works that way .. i think you all misunderstand the difference between a currency and high risk speculation projects with nothing unique to them or groundbreaking

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You are speaking a self language and proposing to move whatever you call it for yourself.
This is simply a killer as you sound to be intentional not supporting what we are building here.
It's irrelevant that you are here still tryings to make your voice heard, if you not with the community then move over with your tokens.

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We're multichain we have to be in order to scale. oh that's good that you know about us that was my goal, lol

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Read your rants

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did you feel info in the rant was wrong? if so i'd like to know so i can evaluate which part sounds incorrect? or you just don't like how it makes you feel? lol

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I had no idea what you were talking about regardless, I'm not buying what you selling.

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It remains irrefutable to found use case for HBD because increasing rapid payment options as HBD serves that purpose.

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I don't need anything ambitious to start using HBD. I just need more people I trust on Hive so that at least we can exchange amongst ourselves. There's a certain degree of trust necessary if I'm going to send HBD for a good or service. I want to get what I paid for.

If I simply had more friends and family on Hive, it could be our settlement backbone like we use CashApp or Venmo. Most of us don't actually spend the money in those accounts. It just shuttles back and forth to settle loans to each other.

Having said that, I realize that we need more network effect to make HBD useful.

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when talking about payments mechanism basics and what it really entails , Hbd has the potentials of fulfilling those requirements if adequate measures are put in place to make all things equal. As you said a fast and feeless payment system holds real advantages and the Hbd I’m quite certain can and will live up to that standard.

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Yeah I do see HBD becoming a valuable paying mechanism because as long as crypto is there to stay, so will our HBD continue and like you said many will loose interest in bank's transactions and then our HBD payment will come into play or what do you think?

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We already see e-commerce coming in with hivelist.store, where every hive user can open up shop. Thelogicaldude did a great job there. What we now need is more people using the market. We also need more real life use cases. I would be totally willing to get all my sallary in HBD.
I always try that with my customers. I tell them they get 10% off if they create a HIVE account and send me HBD.
So far not a single business did like the idea.
Time will tell if this works out at some point.
Great read, as always.

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The idea of derivatives is good, to expand the reach of HBD at a higher pace, but also at a higher risk, depending on the derivative. And all sorts of derivatives based on HBD (or HIVE) could be created.

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5 years this has been happening to me, it started here, around people that are still here. Homeland security has done nothing at all, they are not here to protect us. Dont we pay them to stop shit like this? The NSA, CIA, FBI, Police and our Government has done nothing. Just like they did with the Havana Syndrome, nothing. Patriot Act my ass. The American government is completely incompetent. The NSA should be taken over by the military and contained Immediately for investigation. I bet we can get to the sources of V2K and RNM then. https://peakd.com/gangstalking/@acousticpulses/electronic-terrorism-and-gaslighting--if-you-downvote-this-post-you-are-part-of-the-problem

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