Finance and Economy of Hive
I have written many posts about the reward systems at hive blockchain. When I did and do this, I typically look at it from the social network aspects and not from the nitty-gritty of the proof-or-stake blockchain that hive is. The blog element of this blockchain is something I am very passionate about and use it almost daily. Personally I use hive blog as a journal. I write whatever that is in my mind that day, and I get to look back to it whenever I want. I have been doing this from 2018 and now I have seven years worth of stuff. I do not write regularly and my topic changes. I used to write a lot of financial stuff and travel related posts, but lately I write a lot of quantitative posts (charts and plots) both on hive and splinterlands. I enjoy looking at how much my writing have evolved with time.
That brings be to the topic of hive's reward system. I like to discuss this in the next section.
Understanding the Hive Reward System
Although I have written about it from time to time, it still requires reenforcing from time to time. I am surprised how much community has embraced the KE Ratio. Even now, after many months after its inception, people write posts in favor or against the KE Ratio. One user suggested jokingly, do I get any royalty from KE? I don't :)
I used Napkin to generate these infographics, hopefully it summarizes my thought process better. I personally feel when you publish a post, getting an upvote or not is not entitlement. A lot of hive vote are automatic, so just because you got 600 votes, doesn't mean 600 people read your post and upvoted! Get over it. It is highly likely if you have gotten 5 comments perhaps 1 person actually read the post :) The other 4 are just commenting to show engagement.
- Subjective Value, Not Automatic Entitlement: A upvote represents that a user derives value from a content. This value is purely subjective and relies on the judgment, taste, and particular community context of the individual. It's not an entitlement or automatic reward just for producing content. Also just because you published a post, doesn't mean you deserve an upvote.
Proof of Brain, Not Success Guaranteed: The "Proof of Brain" principle suggests that high-quality content, as vetted by the community, ought to be rewarded. It doesn't, however, promise that all content, irrespective of quality or applicability, will be rewarded. It takes effort, quality, and engagement that connects with people to get upvotes. This is a critical post and people often don't get it. Just because you have put a lot of effort putting together your 1000 word post, doesn't mean you will get $50. In reverse, a 300 word template post can fetch $50. It depends. I am not saying good or bad, just saying what happens.
Community-Determined Distribution, Not Central Allocation: Rewards are allocated according to the weighted sum of upvotes from Hive Power users. There is no central body that decides who receives rewards or how much. If the community does not find value, there is no intrinsic "entitlement" to rewards. So the vote that you get are stake weighted, and generally you have very little control over it.
Dynamic and Competitive Environment: The reward pool is limited and given out on a dynamic basis. People are continually producing content, and upvotes represent a type of resource allocation in this competitive system. To get substantial rewards, one has to stand out and repeatedly provide content that the community values. The other part is networking. People who votes manually typically likes to vote people that they know, so it is your best interest to know more people, just like in real world.
Influence, Not Requirement: Hive Power users have an influence on reward distribution but are not compelled to upvote specific content. Their voting patterns mirror their personal evaluation of quality and aspiration to see specific kinds of content thrive. Do you like to have more influence on the chain? Increase your HP. Stake in king here.
Understanding Hive's Downvote System
Nothing get more drama than hive's downvote system. People always asks for explanation: "why my post is downvoted?": they never ask for "why my post is upvoted?" though! :) Downvotes are always taken personally as if people are taking away your money. The issue comes from the entitlement of the previous section. It is hard for people to understand that no one is taking your money. The money you are talking about is not yours in the first place, it belongs to the common reward pool until day seven at payout. Just like you have no control over who upvotes you, you have no control over who downvotes you either.
- Quality Control and Resource Allocation, Not Content Removal: A downvote, also referred to as a "flag," is first and foremost a mechanism for quality control and proper allocation of the limited reward pool. Its main impact is reducing or entirely negating the potential rewards of a post or comment. It does not result in the removal of the content from the blockchain or hinder its availability for viewing. The most common thing that I have heard related to downvote that it is censorship; and nothing can be further from truth. Hive blockchain is immutable, anything you write here can't be removed and is supposed to stay here forever. That is the opposite of censorship.
- Expression of Disagreement: Downvoting is a means for users to express dissent or disapproval, or to signal that the content is considered spam, plagiarism, poor or no-value, misleading, or in some other way detrimental to the community. It is a form of decentralized moderation and feedback, which allows the community to self-regulate.
- Decentralized Moderation, Not Central Authority's Choice: Unlike conventional platforms where a central authority can remove content or ban users, downvotes on Hive are decentralized and distributed. There is no single entity that can "censor" content from the blockchain. In fact, censoring is impossible at hive.
Protection from Abuse and Spam, Not Opinion Suppression: Downvotes are essential to safeguard the integrity of the reward pool and the health of the ecosystem as a whole. In their absence, the system would be exploited by malicious users posting low-quality, plagiarized, or spam content to illegitimately accrue rewards. They prevent the rewarding pool from being diluted for authentic creators.
Transparency and Accountability: The entire upvotes and downvotes are logged on the public blockchain, so the process is transparent. Individuals are also responsible for their voting behavior since their Hive Power is utilized in the process. Transparency prevents random or malicious downvoting since such activity would be exposed to the community.
Downvotes are rarely used in hive, especially when considering the total percentage of all votes. Typically total amount of downvotes at hive are less than 0.05% of all votes. Yet, you always here there is downvote abuse, but you never hear upvote abuse! :)
For the record, the issuer of downvotes doesn't get any financial benefit, however, the issuer of upvote does, he/she/it gets 50% of the rewards as curation reward (obviously at a stake weighted percentage of their vote).
Great list of points and worth reminding people of them. Nobody should be writing Hive posts with the express intent of profiting off them; as in most things in life, you should write to write well, not to make money. If you focus on producing good quality content, especially content that others will enjoy reading and get some insight from, then maybe upvotes will follow. Or maybe they won't. If they do, then be grateful, and if they don't, then don't take it personally.
I have said it for years, and will continue to say it - people who want to create, will create, whether there is a reward or not. They are compelled by that desire to create.
Writing well is about expressing yourself. Sometimes that expression helps people figure things out for themselves. Sometimes, it moves others.
There's value in all things, depending on the perspective. Value on hive depends on who sees it in that seven day window, and what they choose to do with that limited timeframe.
Can it add value again in the future? Absolutely, but the Internet as a timeline as opposed to an archive is a very real thing I'm noticing these days.
New content is instantly absorbed, and old content festers. We need to value it all equally. Not everything is relevant "for the moment". Some things will be relevant always.
Well said. I know for a fact that my writing focus have improved and also my plot making skills have improved, especially using mathplotlib :)
That is all measurable gain for me!
I think people at Hive are paying too much attention to the importance of posts. Hive is more than just posting. Personally, I can't write posts every day. But I make more money on Hive than 99% of people who write posts.
No reliable bank on the planet will give you 15% in dollars, and HBD staking is a reliable deposit.
I can happily chat in the comments and get $1 a day for it. I don't know where else they pay so much for talking.
Splinterlands game, SPS, SPS/HIVE pools - can teach people how to invest in volatile crypto assets and trade without going beyond the Hive blockchain.
Yes. HBD is great. For passive income it is a great tool to build a rainy day fund.
Hi, @azircon, I just want to point something out about the KE ratio. Take a look at my account: you’ll see I’ve done two power downs, yet the funds are still there, in savings. Why? Because my intention is to have them at hand for when Hive rises, so I can sell, and when it drops, buy cheap. That way, I can grow my account. When Hive hit $0.60, I saw the opportunity to sell, since all the HP I had accumulated arrived when Hive was trading at lower prices. But I didn’t have time to act. Everything happened too fast, and a power down takes time… in my case, just two weeks. Still, I wasn’t quick enough. I would’ve sold at $0.60 and bought back at $0.18, and my account would be stronger today, right? I don’t believe the KE ratio is considering all factors. For example, it’s not accounting for the Hive from my power downs that are still in my account. Shouldn’t the Hive we’ve placed in market orders also be considered? It hasn’t left the blockchain!
Nothing wrong with your plan. It is a good plan, I like it and I hope you execute it. And yet hope is not a strategy! :)
Thats all it is, a plan. I can’t make a quantitative analysis based on a plan. When you execute the plan and power up it will reflect in your KE :)
I really enjoy this quote below, as I have experienced this myself!
I’m not saying this because of the plan itself… but many people interpret the KE ratio as an indicator of someone ‘bleeding’ Hive or milking it—a term that’s been used. I have my own perspective on this. Just as votes aren’t a right, everyone has the freedom to do what they see fit with their money and their effort. Hive is very enjoyable, but writing here also requires work and resources. I’d say to people living in fragile economies and catastrophic countries, like mine, that they should grow here. In fact, that’s what I’ve always done. Because Hive can save them, just as it saves me. And I’m not even mentioning those who are building projects on this platform… they need resources, and often must pay others to keep creating. The quote is a good one… but still, we all have a plan. Thank you for the kind wishes. 😉
I agree. So everyone has the freedom to vote however they vote. As long as the vote itself is not abusive. Do you agree?
I agree that we should look at all of this in a constructive way, one that contributes to everyone’s growth. I deeply value Hive’s power to save, to bring people together, and to inspire collaboration. That’s something I learned when I first arrived here. Everything that happened with that abuser, and how the community responded… that’s why we’re here today.
Also for the record, you are from Cuba. A country I adored since I was a kid. Your people accepted and helped my wife with open arms when she was in Miami. We still have some of our best friends who are Cuban.
I looked at your account and KE. It is very respectable compared to many people at hive. I don’t think you have anything to worry about regarding your KE or your hive etiquette. If someone points finger at you regarding your KE, tell them the father of KE said this :)
🤣 ’m not worried at all. I simply pointed out something I felt was missing from that indicator. Cubans are wonderful people and excellent hosts.
(People here also have the freedom to think well or poorly of someone. These are things beyond our control. I always say, Hive is like life)
And thank you for this brief but meaningful exchange.
I’ve been here in Hive for a while; I think this post truly helped me connect the plots of hives in a deeper way. It shows me Hive’s decentralized structure and its potential to empower creators and curators at the same time. The subtle emphasis on community-driven value is the most important thing for me. Now I know it’s not just about earning tokens; rather it’s about building something meaningful with others who share the same vision. Gratitude to you Dada!
Good to see you. Where have you been?
Become father of a beautiful baby girl recently. Keep us in your prayers. And also busy with a paper submission as well as usual teaching stuff for my students. Feeling good to be active again.
Congratulations!
That is definitely a life changing event.
Yes, the bestest thing happened to me.
Bookmarked, a nice explanation of how things run here. Honestly, I personally do ask the question why I got upvoted. I don't like auto-votes. I enjoy the benefit, yes, SL is a costly mistress. But I do miss honest and critical feedback. And downvotes do not provide that, either, at least when it's not explained. I rather have a downvote and someone giving me feedback on my writing, then auto-upvotes. But the few times I received downvotes, it was without any explanation at at all. Not even a "You suck."
That would be my only complaint. I can't even say that it's a big echo-chamber on HIVE, as most comments do provide a different perspective on the written, though mostly picking up the positive. At least for me, not being a whale (yet), so I don't get leech-comments.
I have given explanations for my personal downvotes always. I have done that as a courtesy and I do not have to do it. I receive a lot of downvotes, never received or expected any explanation.
I know, I think you never down-voted me. Anyway, do you think little feedback boxes would help? Like when you cancel a subscription? When you click on "down-vote", a pop-up pops up and let's you leave a little direct message, or select an answer.
I didn’t. I never downvoted most people:) This is the normal trend. Most people don’t realize that. I have upvoted tens of thousands of people but downvoted tens of people. So difference is perhaps 4 orders of magnitude.
I always wondered about downvotes. When you downvote some post and reduce the rewards for the authors and curators of that post does it in effect increase rewards for everyone else curating and writing other posts? Since the rewards don't have to be paid out to the downvoted post would the overall pool of rewards be larger? Or does it just reduce the Hive inflation?
Yes. You are sending the potential rewards back to the reward pool but that increase of rewards is infinitesimal small and is distributed among all hive users who made content that day.
Does the 'eye' icon in ecency shows the actual number of people reading the post? 🤔
Is there any way to know who read without the comments actually indicating they read?
No
No it doesn’t
I read your more posts than the posts I comment on xD
If you got 1 comment, 5 people might also read it without commenting BUT I GET YOUR POINT TOO 😆 (people farming upvotes in any way possible these days)
Also, I am thinking alot of the changes happening in all social media and Hive is giving good competition to the rest of the world. For example, utube shorts r filled with bot farm content creators. Sometimes we r talking on internet without knowing we r arguing with a bot.
Me too, I probably only upvote one in ten posts I read. I probably comment on even less. Except for the authors that I know are going to provide me with something that makes it worth commenting. Worth, in the sense that I may be able to expand what they've written, or share a personal experience or anecdote that others in the comments may see and add to the conversation.
I wish I had time to read that many posts... I usually focus on the most interesting posts of my "Most interesting" list, try to read them all, and I do upvote them all - as they're usually adding something to my life. But when I read something, I always try to comment, as the engagement is important to me - but if I can't add value to it, as you wrote, I rather just enjoy the read and upvote.
Ah, the benefit for me is that unemployment lets me spent so much time here. I am a pest in everyone's comment sections. You can't stop me!
I am sure more people read my post than they comment:)
But I say I am an anomaly. I stand by what I said about most people.
You can be very frightening if you want to, indeed 😅 I personally enjoy the critical engagement, but I can see why it might scare others.
Great insights on Hive's rewards! 👍 I also love using it as a journal, it's awesome to look back at old posts.
Yes, for me that is the main purpose. Plus I use this tool to communicate with others if they need a product (typically an analysis) from me.
I added a word ;)
Nah, I don't think this is much of value :)
Ultimately I decide what is value and what is not, when I vote.
The chain doesn't know the difference between an automated vote and a manual vote. The authors and the community do :) It is why I get so much joy from a comment compared to a vote, that way I know someone has engaged with the content, or at least made an effort to read it.
Chain doesn't. But I do! :)
I think we all do! :D
I am not so sure. I can agree that you do, but I will take that one person at a time :) I am not very trusting type you know.
Approaching things one person at a time is good and pragmatic.
To go back to my previous comment -I would like to clarify - about the "chain" knowing - the clarification here is "chain" is used in that context as a collective term for "the writhing masses of humans that make it up". The chain can't know anything because it isn't sentient.
Great job 👌
@tipu curate
Upvoted 👌 (Mana: 51/61) Liquid rewards.