Is Hive A Good Investment? (No-Hype Analysis)

The price of Hive pumped overnight which is usually the trigger for many to start looking into it learning what it exactly is about. As someone who invested 4+ years ago in STEEM (the blockchain Hive Forked from), I took some time to make a full Analysis of my investment also breaking down if it is worth getting into...

Hive Token History

HIVE is a fork from STEEM which took place around a year ago meaning all (aside from those that were excluded) who had STEEM including myself got an equal amount of HIVE airdropped. Long story short, Justin Sun bought Steemit inc which is the blogging platform that runs on top of the STEEM blockchain which included a big stake. The users and witnesses got worried about centralization with a lot of drama on both sides and a hostile takeover attempt from Justin Sun. The community on the STEEM blockchain showed that they can't be bought and basically made their own chain excluding the stake of those that took part in the hostile takeover. Most of the projects that were building on the STEEM blockchain also moved over to Hive and both the STEEM and HIVE blockchain now coexist doing their own thing.

Now 1 year later Hive is trading at 0.87$ with a 347 Million Market Cap & STEEM is trading at 0.82$ with a 304 Million Market Cap.

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Fundamental Value Hive Token

Hive is a Delegated Proof Of Stake Blockchain where dapps can be built upon. Transactions are near-instant and free in that you need to have some Hive Staked which allows you to perform actions on the blockchain and part of the inflation going to witnesses who run the nodes. This power drains as you use the blockchain and it replenishes over time.

Example:

Splinterlands is a game operating on the Hive Blockchain where they are basically running their business. Since they provide the resource credits for their players to operate on the blockchain, they need a lot of Hive Power to lease out so the experience for their players/customers is near frictionless.

Hive Inflation Schedule

There is a set inflation that goes down over time (^^ See Table above 'Source') and those that hold Hive Power directly influence who this is going to with the upvotes they give on Hive.blog. Part of the inflation passively goes to HP holders, Part of the upvotes goes to content creators (it is possible to upvote yourself), part of the upvote values goes back to the one making the upvote as curation rewards, part goes to the proposal system flowing to those that develop. It is possible to fully delegate your Hive Power getting fully passive returns from that (dlease)

There is also a use case of having Hive Powered Up for those that are content creators as it increases the chance to get noticed and taken seriously. Just looking at the top trending posts, it can be seen that the HP the content creators are holding is 1.3k | 119K | 97k | 67k | 180k | 883k. So while it by now means is an absolute requirement to have a lot of HP staked to get in top trending, it certainly helps but only if you really have a lot.

Governance Voting is also a use case for the token as those who have Hive Power also get to vote on who they want to see as witnesses running the nodes.

Hive also operates as the main currency on the hive ecosystem and all dapps or tokens created use it as a purchase option or trading pair.

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2nd Layer, Tribe Tokens & Airdrops

The Hive blockchain has a 2nd layer that allows tokens to be created and exchanged and smart contracts to be programmed. it can be found on hive-engine.com. Some Dapps and Games also directly run on the main chain.

There have been many airdrops and projects to be involved in that run on the blockchain allowing to earn something on both STEEM and HIVE combined the last 4 years. Starting projects tend to do an airdrop of their token to those that hold Hive Power. Some of them went nowhere while others really thrived. Both LeoFinance.io with their LEO token which was originally airdropped and Splinterlands on which early players have done very well as the market cap of all cards combined recently surpassed 10 Million Dollar

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Personal Investment Restrospect

So I created my STEEM account in July 2017 pretty much after a price pump similar to this one currently on Hive. It didn't take all too see that the platform was something I enjoyed and suited my needs after which is started to buy my first STEEM to better learn what it all was about. I continued to cost-average in the buying zone between 0.71$ and 1.2$ until I reached 4000 SP at that time. I did diversify some profit into other coins and buy a bit more at times when I could use it mostly just naturally growing what I had by using the blockchain for what it's made for.

Just looking at the chart of STEEM and the buy zone in the past 4 years it shows to be a terrible inventment with the price currently still being lower compared to what I paid for it. However, putting that STEEM to excellent work provided multiple benefits and income streams these last 4+ years that far exceeds what I put into it. I have been having a lot of fun writing daily blog posts as it is something I enjoy regardless the post-earnings. Not only has blogging helped me to stay sharp and build consistency in what I do (Sports Betting & Crypto) which resulted in some really good profit from both. It also got me to connect with a lot of like-minded people along the way. There have been countless Airdrops over the years (Hive / LEO / PAL / BLURT / Obyte / TRX / CUB / ...) and a lot of opportunities to reinvest earnings in projects that run on the Hive Blockchain (Splinterlands / SPT / SPORTS / LEOM / ... ). Having a blog also allowed me to earn some Affiliate earnings and it is very easy to expand content to other platforms like Scorum or Publish0x to reach a wider audience and earn a bit extra on the side.

So just going by the chart by no means gives an accurate view to judge the investment by when it comes down to a blockchain like STEEM/HIVE. Adding everything up, it has been more than worth it for me also because I enjoy being part of the project. Hive is an awesome blockchain with great tech that actually works despite the flaws it clearly still has.

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Flaws & Weaknesses

Unfortunaltely, there are also many flaws and weaknesses when it comes down to the Hive Blockchain (in my view)...

Blogging Platform
The entire upvote mechanism by now has shown to not really work optimally. It mainly incentives rather low-quality post2mine content which mainly deals around the platform itself as that is what everyone is interested in. Honestly, there are very few content creators on this platform that provide something unique I systematically look forward to reading. It is fun to follow what some friends are up to but that's about it for me. This is different for everyone though, I would say browse hive.blog yourself and see how many things are actually worth reading even when going to the trending page. I'm sure a lot of content is worth it if you are into it but the content discovery is just not made easy.

The platform also has a very steep learning curve and everything is rather complicated to understand properly. Getting something going also can be quite a challenge unless you know all the tricks and are willing to bend your way of going about things.

Dapp Platform
Even though there are quite some real users on the Hive Blockchain, right now there isn't really a network effect which makes it hard for developers who want to build on this blockchain to pick it even though it's fairly cheap and the tech is awesome.

Tokenomics
With many people earning on the platform from the inflation, there also tends to be quite some selling pressure and only when there are more buyers than sellers, the price can go up. Most pumps also tend to get sold into and the chart looks quite bad compared to many other crypto projects since it doesn't take into account all the extra earning potential the platform provides. Not much Hive Power is needed also to do everything you want on the blockchain and there aren't enough reasons for the average user to actually hold a lot of Hive Power.

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Is HIVE a Good Investment ?

If anything, I would recommend everyone to try out the Hive blockchain and the many dapps that run on it. If it is something you enjoy and plan to use extensively by blogging, playing, connecting to people, being part of the community, ... for the long run, it might be worth getting some Hive similar to how I personally bought STEEM back in 2017. Just as a crypto investor looking for some passive returns and a token that potentially could revolutionize an industry going mainstream seeing a 100x return, I honestly would not be comfortable taking that bet. In the end, it remains a "post2mine chain" where people are getting rewarded from the inflation resulting in quite some constant selling pressure. Then again, looking at everything that has happened in the past year, who knows where this might all go...

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Posted Using LeoFinance ^Beta