Where does the money on your posts come from on Hive?

in LeoFinance3 years ago (edited)

Last time, I shortly discussed Hive's economic value and what made it valuable for us users and to the community in terms of its price. This time, I will tackle the very basic reason as to why your Hive posts generate real money in the form of newly minted Hive tokens.


Where does the money come from?

The common answer we usually get with that question is "the hive protocol gives you the money for your posts" but that's too complicated to digest for a non-technical user. So allow me to break it down into pieces until we get into the real reason.

First is that "You get upvoted" - This answers your question why you're seeing these cool looking numbers image.png under your posts. BUT! There's what we call catalyst to that upvote you received - quality content.

Quality content is the driving force of upvotes and support from other users.

Second, "HP equates real money" - That's right, the upvoting users must have Hive Power(HP) to distribute/give rewards to your posts. More upvotes do not necessarily mean more rewards. Rewards will always be dependent on the amount of upvoting HP.

The more(HP) the merrier as the saying goes by.

For others to understand visually, I have some images for you to show. Extracted in https://hive-now.com/upvotecalc.html, a tool made by @penguinpablo.




As you can see from those images above, the larger the Hive Power you have, the greater rewards you can give/distribute to other users' posts or even to yourself. Voting Power represents your whole voting rights and it diminishes at a rate of 2% for a whole 100% vote weight. Vote Weight is a scaling feature. If you have less than 500 HP, you will have your default vote weight set at 100% but if you manage to or power up some Hive tokens into 500 HP or more, you can then set your vote weight personally on every upvote you give.

Vote weight scale in hive.blog should look like this.


Note: You can get some rewards through upvoting content. You're not just simply giving rewards to other users but also, you're earning curation rewards for yourself.

Okay, enough with the technicalities of the rewards system of Hive. Let's get into the root of this question - "Where does the money come from?"

So third and last, "Hive's price/value" - The very basic reason why there's value on your Hive posts is that Hive has an intrinsic value as a token. Without that base level value inside and outside the platform, Hive Power will bear no influence in rewards distribution, Upvoting will show no dollar numbers on your posts, and lastly, 1,000,000 HP will be equivalent to 1 HP.

A valueless token is considered a dead token.

Featured image was made/produced by the author.

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