Hive University - Lesson 3: Stake your claim

in #hive9 days ago (edited)

Welcome back to Hive University!

In the last lesson, we learned what each of our account keys are used for, and a brief summary of the various cryptocurrencies that exist in your account's wallet.

We touched on Hive Power a little, but in this lesson, we'll go over all the benefits of staking your Hive and claiming your piece of the blockchain pie!

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In lesson 1, I compared your Hive wallet to a bank account that acts more like a personal safe that only you control.

I think it's fair to equate ones "liquid HIVE" to their checking account, and is cryptocurrency that's ready to be exchanged at a moments notice. HIVE POWER however is more like a savings account that you're not immediately able to withdraw and exchange. Much like a "traditional" bank account, your savings (HP) will accrue interest just by sitting there! At the time of writing, the interest rate is approximately 3.39% APR.

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- Powering Up

When you convert liquid HIVE into HIVE POWER, you're essentially locking it away and claiming your share of influence on the platform. You can almost think about that influence like a shareholder in a company. The more shares of that company you own, the more say you have about how that company is managed. No one entity owns the Hive blockchain, and we all work together to make this engine run, with each of us having a equivalent say as to where our train will travel according to the amount of HIVE POWER we have locked away.

Powering up is an instant action, and as soon as you power up, your benefits are applied. Converting it back into HIVE isn't instant, so be sure you're okay with not being able to exchange it quickly.

- Powering Down

When unstaking your HIVE POWER by converting it back into liquid HIVE, your total power down request is split into 13 portions and sent to you weekly. This is both to encourage long term holding, and to prevent wild swings in the market price of HIVE.

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We've already learned that converting HIVE to HIVEPOWER gives us influence over how much a piece of content on the platform is rewarded. This takes place in the form of voting. You can 'upvote' a post if you like it and think it deserves I higher reward payout, or 'downvote' it if you don't like it and think it deserves less rewards than it stands to earn. I have long preached about the importance of both upvotes and downvotes to determine the true perceived value of content according to everyone who chooses to interact with it. Not everyone completely agrees with me on that point, and I think it's pertinent to warn that some people will take offense to downvotes even if no offense is intended, so be wary of getting into what is known as a "flag war" where both sides of a conflict frivolously downvotes any and all active posts/comments.

The more HIVEPOWER you have, the more you can potentially reward a post, but your downvotes can also decrease the pending payout. This can and has certainly been abused over the years, but the same system provides altruistic users the ability to combat spam, plagiarism, and even worse types of content that they feel holds little or no value to the community.

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The value of your vote is also affected by your "Voting Mana", which decreases a bit with every vote you place, and regenerates over time.

If you're using @peakd to interact with the Hive blockchain, which I will be using as reference henceforth throughout these courses, every time you place a vote, you have the option of adjusting the "weight" of your vote. For instance, if your "full-power" upvote is worth $10, but you only want to reward a post less than that, you can give them a smaller vote by decreasing the percentage on the vote slider. A 50% vote on a post will only decrease your voting mana by half as much as a 100% (full-power) one, and your vote mana directly affects the reward given.

At the time of writing, my mana sits at 62.1%. In the same hypothetical where my full power, full mana vote is worth $10, one of my 100% votes would only increase the potential rewards by $6.21, and a 50% vote would be worth $3.605.

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Nothing comes for free, but it doesn't have to cost you anything...

Most other blockchains like Bitcoin or Ethereum have built-in fees for every transaction that takes place. Considering every transfer of coins, post, comment, or vote is technically a transaction on the Hive blockchain, that sort of fee schedule would get very expensive very quickly. This problem is handled by basically giving every account an allotment of "Resource Credits" to put toward fees.

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Much like voting mana decreases each time you vote, every single action on the blockchain requires an amount of RC, and your pool will replenish over time. Your total amount of Resource Credits is directly affected by your HIVE POWER, and if you don't stake much HIVE, you're never obligated to, but you may find yourself lacking enough resource credits if you are someone who is very active on the chain. Put simply, the more HIVE POWER you have, the more frequently you can interact with the blockchain.

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Pencils down, books closed. You've completed lesson 3!

I hope this lesson has given you a good idea of the basic benefits of staking your HIVE and powering up! If you have any questions or comments, I welcome any and all feedback! If you have a Discord account, I also highly encourage you to join the Hive Community Discord and connect with people from all over the world who call Hive our home.

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If you're feeling generous, I also greatly appreciate tips, which gives me a segway to the sponsor of lesson 3, Hive Tips! 😉

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Not only does this allow users to tip their own liquid HIVE to others' content on the blockchain, but the @fullalt team already has working integrations for major platforms like Twitter, Youtube, and more, allowing the spread of Hive all over the internet!

Download Hive Tips from Fullalt.com and start tipping HIVE anywhere on the internet with no fees!

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Thanks so much for reading!

If you enjoyed this post, consider sharing it to spread awareness! If you're feeling extra generous and would like to help support my future content, consider joining my fanbase on hive.vote. It's completely free to do, and does a lot to support me as a content creator! If you would like to sponsor a future lesson for Hive University and get your project in front of new users, reach out to me on Discord @ thatsweeneyguy#7660 for more details!

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Check out the previous Hive University lessons:

Lesson 1: Join the Revolution

Lesson 2: Don't Forget your Wallet and Keys!

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I see a lot of people really run down their voting power. It may be better to let it recover so they can give bigger votes. I try to keep mine above 80%, but it often slips below that. It rarely gets back to 100%.

I follow a few select voting trails to support specific communities, but I've got a threshold set to keep them from draining all my power away. 😀

Thanks for stopping by, and mentioning HiveU in your FollowFriday post!

Thank you for your engagement on this post, you have recieved ENGAGE tokens.

You are very welcome. Just trying to connect people.

!ENGAGE 20

Great lesson here! Would really help a lot of newbies and not-so-new alike. 😊

Thanks a lot! These lessons are definitely geared toward people who haven't yet dipped their toes in this crazy decentralized social thing, or cryptocurrencies in general, but I try to make them informative enough that they can hold value for anyone who wants to learn a bit more about how everything works.

Looking good! Explained the Mana very well up there. I invite you check out our latest post and list your university on there. Also, might I suggest links to your previous 'classes' for people?

  • Witty

haha! I meant to add links to previous lessons, and totally skipped over it, didn't I? Adding those in now. Thanks for the heads up!