The Hive emission rate is high. If bitcoin is the standard, bitcoin mines and emits about 450 BTC each day. By comparison, 78,109 new HIVE are spewed out into the ecosystem each day. That's a lot of emission.
Fortunately, Hive has a system whereby users are incentivized to not dump their earnings into sells orders. This, of course, would put a lot of downward pressure on the price. Instead, and I have no numbers but only a guess, I'd guess well over 90% of this new HIVE gets either powered up to HP or put into savings. (The HBD saving rate of 20% APR is a whole other issue.)
It's not all about price
It's not all about price, but in a way, it is. A coin or token or blockchain isn't only about the price of the coin. But, like it or not, want to admit it or not, price is the top metric people pay attention to. I know this isn't necessarily popular to say, especially to the technical-minded who are "here for the tech," but price matters. I will say that I've seen some people argue that price is the only metric that matters. The other numbers are merely sideshows and supportive of price. I wouldn't go that far, but it makes a point.
Yes, all metrics matter!
- users matter
- transactions matter
- daily posts/plays/interactions matter
- using bitcoin as the standard, look at all the metrics show below on the "Clark Moody Dashboard"
Now, look at the very first metric listed. Price.
There's a reason it's listed first. There's a reason coins are listed in "market cap" order on things like Coin Market Cap, or Coin Gecko, or Coin Paprika. The only factors that go into those rankings are price and supply (which, of course, is based off emissions). There's a reason people have to constantly be reminded "no price talk here" in chat groups. I've never seen anyone scolded with "no difficulty adjustment talk here."
How can price be "improved"
There is, of course, no magic bullet to making something more valuable (and ostensibly increasing the price for it). Governments try to "set" prices with price controls. Yawn. Please, have we still not learned that prices cannot artificially be mandated. An easier route would be for the king to snap his fingers and say, "Everyone is now rich!" It just doesn't work that way.
I get a chuckle when I see someone say, "I'm going to start COIN-XYZ and I'm going to set the value of 1 COIN-XYZ equal to 1 dollar." Hmm. Golly, why not set it at 10 dollars? Then, we'll be 10 times richer, right? It just doesn't work that way.
Add value
Probably the best way to boost price is to make the item (coin or anything) more valuable. Sounds dumb, but I mean to literally add something that is valuable. Maybe that means a new tool that makes the coin or blockchain more useful. Maybe that means a new killer game that makes it more attractive. Maybe it's an easier interface. Maybe it's higher quality posts or photos to be consumed. Maybe it's better search engine optimization.
Adding value is something we constantly work on with Hive. There is no magic wand to make it happen, it happens by work.
Add users
The more users that a blockchain or coin has, the more valuable each coin becomes. It's simple supply and demand. If there are twice as many hands grabbing at the slices of pizza on the table, each slice laying there becomes more valuable.
Adding users and adding value above are brother and sister. If value is added, users will likely come. I say likely because there are no guarantees. I scratch my head sometimes with Hive. I think it has a lot of value to add, yet growth seems flat. Why people post on Medium rather than something like Hive is curious to me. (Do you earn anything besides "claps" on Medium? Maybe the SEO is better? I don't get it.)
Adding users is something that we constantly work on with Hive.
Monetary tightening
Reducing emissions anywhere (and thus reducing the inflation rate) should result in greater token value. Again, with fewer slices of pizza constantly being served onto the table, and with those hands still grabbing for slices, each slice becomes more valuable. By contrast, with a spigot spewing pizza slices out of a firehose, the value of each slice is diminished. What is the slice in your hand worth when there's a continual flood of new slices pouring out of the kitchen and onto the table? Hint: little.
The good news is that the HIVE emission rate and resulting inflation rate is diminishing, as this post shows. The bad news is that it's another ten years before the inflation rate is down to a non-ridiculous level (see graph on link). I hope Hive can hold out that long (and I fully expect that it will).
Why do we have this inflation rate? A couple of thoughts come to my mind. First, other chains and coins have equally high, and often insanely high inflation rates. High APY return rate promises are the crack cocaine drug to lure in users. Who can turn down earning 40% on your staked tokens? 60%? 100%? Let's go 200% APY!
Secondly, perhaps fiat currency inflation has desensitized us to believe that 6% inflation is fine, over 4% is fine, or the Fed's "target" of 2% inflation. We're the dog in the chair in the fire.
Why is anything over 0% inflation of our money considered okay? Anything over 0 is stealing value from us. We're okay with that? Maybe we should rename "inflation" to "value taken from us".
Scarcity. Let's not forget one of the most fundamental tenets of value. There's likely two, utility and scarcity. The utility comes about in the "adding value" component. The scarcity comes via emissions and token supply. We work on adding value, but, although we could, we do not work on the emissions.
To be fair, the link above does note that after HF16, "inflation narrows 0.01% every 250k blocks..." I assume "narrows" means "reduces" and I assume this was a change from pre-HF16 which did not reduce, but I'm not sure.
Reducing emissions would not be popular. People like to get rewards in tokens. Many come to Hive to earn HIVE, which is understandable. We like to see those whole numbers popping into our wallets, not fractions and decimals. But, what good is 10,000 tokens of COIN-X which are worth less than a couple of sats?
Also to be fair, there's a good argument to be made to not monkey with emissions. In my mind, stability is absolutely crucial to a coin. By stability I'm not speaking about price stability here, I'm talking in a more general way...people know exactly what the chain is and does and they know the numbers. Again, with bitcoin, the emission/inflation rate is all but immutably stable. I've looked at the GRIN token. They have a non-finite token supply that emits 1 grin per second, forever. That non-plussed me at first, but I've grown more okay with it because, it's set, it's known, it's unchanging. Stability.
To wrap up, I'd just circle back to the daily HIVE emission: over 78,000 HIVE are served onto the table daily. That's a lot of pizza to be consumed every day.
I go by @crrdlx or "CR" for short. See all my links or contact info at https://linktr.ee/crrdlx.
Posted Using InLeo Alpha
Up to hf16 the inflation rate was >100%, the effective rate was ~160%.
The plan was to drop a zero each ten years to avoid 'integer overflow'.
I don't know how that would have played out up to now, but it sure was nice to hit refresh and watch my hp go up.
There was no guarantee that hive would even exist up to now when hf16 went live.
That talk went on in the secret slack and led to us being sold down the river to the ccp.
Reducing the emissions rate has been being discussed in the inner sanctums, don't be surprised to wake up to find we have been dictated to by the ninjaminers, one more time.
I see our salvation in dex's and liquidity pools from vsc, but that doesn't seem to be happening fast enough to satisfy my need for instant gratification.
I'm eager to see what VSC makes possible.
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