HSBI – Hive Stake-Based Income
Although I’m relatively new to Hive, I’ve read quite a bit of history related to HSBI and its predecessor, SBI (St33m-Based Income). It had its times of rapid growth and success, and times of trouble when a small group of users retaliated against its users. However, this is all in the past. Our role is to learn from the past and look into the future.
After reading quite a few material about HSBI, I was still a little bit confused about how it worked until I saw it in action on my own account. So I decided to break things down, a step at a time, for those people like me who might need to see things explained differently.
In the most simplistic form, here’s how HSBI works: you can either send or delegate Hive to @steembasicincome. This gives you “units” of HSBI, which are converted into votes that go towards posts (and sometimes comments if you never post). When you create a post, you’ll automatically get a vote from this account and possibly a combination of other SBI-related accounts. So far so good?
Now, in order to get a vote, there are a couple of requirements: 1) you have to be sponsored (that is, someone has to have sent at least 1 Hive to @steembasicincome with your username as a memo), and 2) the vote threshold has to meet the minimum of somewhere between $0.02 – 0.025 (this means that if your vote hasn’t reached the minimum, you won’t get a vote until that minimum is reached).
Sponsorships
Take notice of the fact that when sending Hive, you have to place a username in the memo. That username cannot be your own account – it must be someone else’s account. This means that when you send Hive, you’re giving someone else the ability to earn HSBI. HOWEVER you’re also earning the same rewards as the person whom you sponsor. It’s a win-win situation!
So for instance, if I send 191 Hive to @steembasicincome with the memo to sponsor hive-140084 (the FreeCompliments community), I’ll receive 191 Units, and so will hive-140084. Both accounts will benefit from these Units as long as they are active. These Units are permanent.
On the other hand, delegating Hive Power (HP) to @steembasicincome results in 0.5 Units. For instance, if I delegate 100 HP to steembasicincome, I’ll receive 50 HSBI Units. Nobody else has those units expect for me, and the Units would decrease to 0 if I remove the delegation.
What are Units, and how are the votes calculated?
Units are used to increase the total balance which you collect. Essentially, every unit provides you a permanently increasing balance which will go towards votes. Every several hours, the total balance accumulates some additional funds based directly on the number of units you have. Think of each Unit as a permanent producer of a tiny amount of income. Makes sense so far?
Every vote that you can receive is exactly 1/3 of your total balance. So, if your balance has, for instance $10, you next vote will be worth $3.33. If your balance is $6.66, your next vote will be worth $2.22.
Once you receive the vote, this is removed from your total balance, but you continue to accumulate value in your total balance based on how many Units you have. So if you have a lot of Units, you can recover that balance back pretty quickly. If you don’t post frequently, your balance can grow at a pace quicker than it’s depleted by the votes that are given out.
For instance, let’s consider Bobby McGee, who has $10 in total balance. He creates a post and earns $3.33, depleting his balance to $6.67. He has a very large amount of Units, and posts only once every few days, and within a matter of those few days his balance grows to $12. His next post will earn a $4 vote, which is 1/3 of the new total balance.
If Bobby McGee decides to permanently post twice per day, his total balance might not increase quickly enough to keep up the same votes. His $10 balance depletes to $6.67 after the first vote → he recovers $0.83 for a total of $7.50 → he posts again → his vote is now $2.50 with $5 remaining in the total balance.
Where can I find the total balance and value of my votes?
In order to visualize these statistics live, you can find your username on the Hive SBI website, where you can input your Hive username. You can also view the “Richlist” to find information about other users, including how many Units they have from delegations, permanent Units, etc. This is where I found information about that one user who had 4 years of non-posting with a 1 Unit sponsorship. It took about 5 minutes of digging to find this!
Here’s an example of how my total and projected values look at the time of writing. Keep in mind that this is all publicly available information:
At which point will you profit from HSBI?
For those who receive sponsorships through HSBI, you profit instantaneously and permanently because you will automatically start accumulating a positive balance without losing any Hive.
For those who are sponsored and delegate, you’ll also profit rather quickly, but mostly temporarily, because 1) Units are lost when undelegating, 2) there is an opportunity cost of delegating Hive to @steembasicincome versus elsewhere. The permanent aspect will remain for the amount for which you were sponsored.
For those who only sponsor and don’t delegate, it will take quite some time to make a profit. However, after that period of time, you’re making pure profit as long as you continue posting. I’ve done a bit of research and calculations to figure out approximately how long it would take to get break-even and into profit mode.
Break-even point for sponsors
Looking at some accounts that recently received sponsorships, as well as older accounts that received sponsorships, I found a single one that had been sponsored for 1 Hive (1 Unit) for about 3.5 years but never posted. As it happened, this account’s daily total balance increase was the average of the more recent ones that I looked into. Thus, I’ll use it as an example to make further calculations.
This single account, after 3.5 years, has a total balance of $0.71278 with a sponsorship of 1 Unit. This comes out to a balance which increases at a rate of $0.00055577 per day.
Thus, we can say that sponsored users will increase their total balance at a rate of $0.00055577 per Unit per day.
Now, let’s not forget the very essential aspect of Hive that half of post rewards get shared with curators. This means that the actual balance, in terms of how much we can possibly earn, is half of that, or $0.000277886.
Thus, the actual earning potential we have is $0.000277886 per Unit per day. Keep in mind: this is only an estimate, and may not line up with higher Unit values, as I’m not sure whether this value increases linearly.
Note: the following calculations were done a little bit over a week ago, so Hive’s prices are outdated. It’s an even better time to invest now for long-term gains.
Let’s consider Hive’s current price in terms of $. At the time of writing, it is $0.344. The APR would consist of multiplying the daily earning potential per unit by 365 and dividing by the current Hive price. This comes out to $0.000277886*365/$0.344 = 0.2948, or 29.5% APR based on the current price. Keep in mind that this incorporates the past few years, when Hive’s price also skyrocketed to over $3 for a brief period of time!
(I conducted another experiment a few days later with my own HSBI over a period of 2 days and came up with an APR of 8.91% at Hive’s current price, and we can expect that the APR will be significantly higher when Hive’s price increases during the next bull market; investing Hive now yields a higher APY since it’s currently cheaper!)
Let’s see how long it would take to break even based on the $0.000277886 daily earning potential per Unit. Divide Hive’s current price by the earning potential, and you get 1238 days, which is 3.4 years.
But wait, there’s more! Let’s consider the fact that Hive’s value, when powered up, grows at a rate of about 3% per year. Doing a bit more math (here’s the formula: 0.344/(0.000277886365)(1.03^3.79) = 3.973), the breakeven point becomes closer to 3.79 years.
Let’s consider the opportunity cost of potentially delegating that HP elsewhere, as certain delegations provide a pretty good return. I’ll use the Ecency delegation as an example, where you earn about 8% APR directly in Hive, in addition the 3% growth that’s always ongoing. This comes out to about 11%. Thus, the new formula becomes 0.344/(0.000277886365)(1.11^7.16) = 7.16. Thus, when considering an 11% APR, the break-even point becomes 7.16 years.
Now, remember that when you post, only 1/3 of your vote is used at a time. This means that you’d have to post numerous consecutive times in order to deplete your total balance. Each post gives you a remainder of 2/3, or 0.667 of your total balance. In order to immediately deplete this balance by 99.9%, you’d have to post 17 times (as 0.667^17 = 0.001). A bit crazy and potentially spammy, but not completely unreasonable. If you’re willing to spread out your 17 posts to one per day (during which time your balance will still continue increasing), you can deplete your total balance by a bit >99.9%.
Thus, after 7.16 years, considerable opportunity costs considered, you’ll be making pure profit. If you and a family member or hubby are sponsoring each other, upvoting each other, and sharing your profits, then chop this estimate by >50%!
Now, if the random person whom you sponsor decides to sponsor you back, or votes on your content with powered-up Hive from the earnings they make, your time will be substantially lower than 7.16 years. This is what we call a win-win situation.
Some limitations and considerations
The most significant limitation would occur in two situations: 1) if you post very frequently, and 2) if you sponsor an account with a very large amount of Hive.
We already discussed the limitations of the first situation earlier (total balance decreasing quicker than it’s repleted), so let’s consider the second scenario.
With the second scenario, a large sponsor who doesn’t post frequently may find that they have a great deal of permanent Units that cause their balance to increase more rapidly than they are able to receive an equal amount of votes. You might be thinking, “how can that be possible? Don’t you automatically receive 1/3 of your total balance in votes?”
Here’s the limitation: the combination of HSBI accounts can only provide a limited vote, based on the amount of total Hive Power which they contain. If all available accounts provide 100% votes, then that’s the maximum vote you can possibly receive. We can see such a case with one of my favorite posters, @improv (who built his Units from scratch using sponsorships that he awards from his fantastic Punday Monday contests), who receives 100% votes from all HSBI accounts – significantly less than the 1/3 vote that he would obtain from the total balance. If he chooses to post more frequently, he’ll likely decrease his total balance enough that he’d be able to receive the actual 1/3 votes. We can see this as a case with other users who have more Units but also post far more frequently.
However, here are some points of optimism to consider: as the $ value of Hive increase, so will the maximum vote that can be delivered by the HSBI accounts. If the $ value of Hive doubles, so will the maximum vote in terms of $.
If you’re someone like me, who primarily powers up, then this will not matter much, and you’ll be looking at another optimistic perspective: since HSBI constantly receives new sponsorships, it’s constantly receiving new Hive. This Hive is then powered up directly into the @steembasicincome account or its affiliate HSBI accounts. Thus, they’re constantly increasing in terms of Hive Power. Increases in Hive Power lead to larger votes, and no matter the price of Hive, lead to larger Hive rewards!
Thus, HSBI is set up for constant growth over time. As such, those who earn maximum or near-maximum votes from HSBI due to permanent ownership of a large amount of Units, over a period of several years, can find themselves earning ever-increasing profits from HSBI. Due to HSBI’s growth, that period may end up being less than the projects 7.16 years, even with opportunity costs.
Just take a look at how @steembasicincome’s account grew over the past month – and this is not accounting for powerups given to the other HSBI accounts!
But… universal basic income is socialism! 😡😡😡
I’ll be honest, the name of this program threw me for a spin at first. I have family members who came from a socialist state and ran away to the United States because of the horrors they experienced. It took me a few months to come around to reading what this program was truly all about.
What ultimately drew me in the end is the fact that in order to earn from HSBI, you still have to post! You’re not going to get a bunch of free income for doing nothing at all. You must remain active, even if only for 17 posts, in order to earn the basic income.
There are those individuals who accumulated hundreds of bucks in total balance, but due to a lack of activity, never benefited from this program. Maybe their contributions were simply an act of generosity to those they sponsored, or maybe their delegations were also just acts of generosity… or they just lost interest in Hive. Their losses become the gains of those who continue to be active, since every unused vote contributes towards the growth of this program’s active users.
I personally approve of programs that encourage useful, active contributions to a community. You can still contribute the type of content that you want, essentially without limitation, and the existence of this content is considered worthy of receiving income. As long as you work and contribute, you continue to earn. Fantastic!
Conclusion: is it all worth it in the end?
After all these calculations, I think HSBI is a pretty worthy investment, and I will be using it for a long time to come.
If you have family members with individual accounts whom yous sponsor, and you keep all your earned wealth pooled together, then you’ll reach the profit stage at least twice as fast as you would alone, with continuing returns building upon each other thereafter. If you’re a committed whale who can afford to sponsor newbies, then you’ll be making profits, connections, and potentially helping retention of users who have a long-term vision on Hive.
If you decide to invest your income in HBD savings, which currently pay out a 20% monthly APR, you might end up doing better, without the benefit of directly helping other users. However, that 20% may not be permanent, and if it’s decreased by several percentage points within the next few years, the HSBI might end up giving you better returns in the long run.
If you’re in for a quick buck, then HSBI is certainly not the best option for you... but, let’s be honest, if you’re in for a quick buck, Hive isn’t really the best option either. Quick bucks typically come with a lot of risks. Hive, on the other hand, is optimized for long-term usage. Those who stick around for a long time tend to see the fruits of their labor. HSBI is a great example of a program that encourages you to grab those tasty fruits once you’ve let them ripen.
LeoGlossary Sources: 1 2 3
Image Sources: screenshots from Hive (Ecency frontend), HiveSBI.com, and Hivestats.io
If you’ve enjoyed the content of this post, are feeling down and need a shoulder to lean on, or would like to make someone’s day a bit better, or found an interesting post you’d like to share that you believe deserves a compliment, please join the FreeCompliments community. We welcome everyone with open arms. :)
Here’s a permanent invite link to the FreeCompliments Discord!
This already paid-out post was just upvoted by @trumpman.
This post was created to allow this voter the oportunity to still upvote this content IF (s)he deems this content to be high quality.
Please don't use this post to self-upvote. You will get blacklisted if you do. And don't use it to upvote low quality content
This is a hive-archeology proxy comment meant as a proxy for upvoting good content that is past it's initial pay-out window.
Pay-out for this comment is configured as followed:
Oh, this is very interesting! What an excellent idea. I might use this on high quality posts that are past their 7 day windows.
@trumpman, appreciate your vote. ♥️ But please remove it from this post so you don't lose the curation on this one, haha.
Fuck that bot, I can vote you directly
Thank you, brother, appreciate that. 🙏
Edit: I'll throw you some HSBI! Catch it if you can.
I'll take it 😂
I don't think you have as much choice in the matter as you think. The deed has been done. 😈
If it's over 7 days nothing is lost since no hive power is spent ❤️
Ah, understood. Another smart mechanism. Discover something new here every day. This is another reason why I like this blockchain - every time I notice a potential problem, there's already some type of solution in place or being developed. The gears actually turn here!
Greetings
I found your presentation very encouraging
It is difficult to build the Hive when income is limited but I build the best could.
I am part of the program HSBI
Peace
It's definitely a great program! I'll send you some more units to help out. After all, we're all in this together. 😊
Thank you very much
I really appreciate your support
Peace
!PIZZA
Comforting confirmation.
!PIZZA
!BBH
Thanks for such a thorough analysis. I'll be honest, I've never understood how HSBI works, I learned stuff today.
!LUV
No problem at all! It can be quite a tricky mechanism to understand. Sometimes it just takes a differently phrased explanation and visualization to understand. We all pick up information in different ways. 😊
@freecompliments, @crrdlx(1/3) sent you LUV. | tools | discord | community |
HiveWiki | 
NFT | <>< daily
HSBI is an amazing project :D
Yes, it had a problem once with the Downvotes, but we went past that :D
I think I am in profit. I have 515 Units, but I have also been here on Hive for 5 years and got a lot of the Units in the first few years :D
HSBI, is such a good tool for for older accounts to give to newbies who just want to earn a little bit :D
Yes, that was ancient history (in terms of the internet lol). It's still a terrific program, and it can be used to sponsor quality content producers! Using it in that manner should only help bolster quality engagement on Hive.
Keep getting those units up! I'll throw you a couple just for funsies too. 😁
Thank you :D
Thank you so much for explaining and also breaking down all the technical analyses of HSBI.
for those who want to stay on hive for the long run, having HSBI unit should always be a profit.
!PIZZA
Absolutely! Hive isn't a get-rich scheme by any means, and you truly obtain its best benefits by staying longer regardless.
@stdd denkt du hast ein Vote durch @investinthefutur verdient!
@stdd thinks you have earned a vote of @investinthefutur !
Thanks for the extensive introduction :)
!LUV
Very glad to do so! Hope that it made sense and was informative. 😊
I'll send you some HSBI units to get you started, since the website shows you don't have any yet.
Yeah, it was :D I'm curious to know more about it so will look into it in my free time :)
Thanks for the shares! I just took a look at the site you mentioned in your post and saw that you sent me 5 shares? Thanks so much!
!LUV
@freecompliments, @kuhnchun(1/1) sent you LUV. | tools | discord | community |
HiveWiki | 
NFT | <>< daily
@freecompliments, @kuhnchun(1/1) sent you LUV. | tools | discord | community |
HiveWiki | 
NFT | <>< daily
They have a great discord channel and josephsavage who runs the show is very helpful :-)
Somehow I missed the existence of a Discord channel during my searches! As I've become a rather big supporter, I think it would be cool to join. Is there an invite available?
I found the discord invite here --> https://www.hivesbi.com/
https://discord.com/invite/Z5KVQ5whKR
Lol, how ironic that I found that website but overlooked the Discord invite. Thank you so much!
If you'd like, I can send you some HSBI for your efforts to counter my dumminess. 😂 (I ask because I see you haven't made posts yet)
thankyou! I am wanting to start posting, Ive been trying to decide what I want to post about and which communities to post in.
Then I will definitely send you some HSBI. 😊
Here's an idea for posting: my community has Motivational Mondays (and as far as I'm concerned, it's still Monday here!). If you can think of something that's motivated you, or something motivation you've seen or heard about, then please go ahead and post it! You'll get our curation, too.
This is more like a long term investment stuff.
SBI really sound like a socialism kind of thing to me, but you still have to do the posting, a quality content posting
Yes, that's exactly what I like about it - you still have to put in the quality content to earn something. Additionally, you don't have this central entity that's forcing this program upon others and profiteering off the effects. It's a great implementation of this concept.
Great calculations! I think there's also a small percentage that's paid in points from the users you've sponsored. This will also shorten the return on investment a bit).
!ALIVE
!CTP
!invest_vote
Thanks so much! 😊
I haven't heard of that percentage at all. Do you have a source for this? Would be interesting to see - maybe I can improve the calculations further.
@stdd denkt du hast ein Vote durch @investinthefutur verdient!
@stdd thinks you have earned a vote of @investinthefutur !
I definitely saw this information somewhere, but I can't find it now. If I find it, I'll be sure to forward it to you.
!ALIVE
!CTP
!WINE
!PIMP
!invest_vote
Yes, that would definitely be greatly appreciated if you come across it again!
You must be killin' it out here!
@stdd just slapped you with 1.000 PIMP, @freecompliments.
You earned 1.000 PIMP for the strong hand.
They're getting a workout and slapped 1/1 possible people today.
Read about some PIMP Shit or Look for the PIMP District
@freecompliments! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @stdd. (6/20)
The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.
@freecompliments! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @stdd. (13/20)
The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.
!sbi melinda010100
Congratulations @freecompliments! You have completed the following achievement on the Hive blockchain And have been rewarded with New badge(s)
Your next target is to reach 2000 replies.
You can view your badges on your board and compare yourself to others in the Ranking
If you no longer want to receive notifications, reply to this comment with the word
STOPCheck out our last posts:
$PIZZA slices delivered:
ekavieka tipped freecompliments
oadissin tipped freecompliments
@rzc24-nftbbg(3/5) tipped @freecompliments
@crptogeek
👀
Okay this was really really informative. You've done a whole lot of digging. Ima glad i came across this.
Out of curiosity, can a person delegate and sponsor at the same time? Are they any risks involved.
I can only post on a part-time basis so I couldn't maximize the benefit of this project. Somehow I managed to accumulate more than 85+ HBI's most of which were acquired as SBIs during the St...m years. I stopped when there was big controversy that resulted in SBI Holders were getting downvoted.
I definitely read about this, but that hasn't been a problem recently. Apparently it was a small group of actors who already left the blockchain a while ago. I think HSBI has been garnering more appreciation over time - especially when it's used in a manner that rewards quality participation. 😊