The Global Economic Crisis and How HIVE Can Make a Difference
There is a major conversation happening globally right now about money and how the inflows and outflows of various forms of the "fiat experiment" are taking shape. A global pandemic is one thing, but the cascading economic effects that we've seen have been an entirely new beast that the world is confronting (or perhaps even a beast that was always there, but dormant).
I've pulled some quotes from a Coindesk article. There is a lot of attention aimed at Bitcoin & crypto right now as people in other countries - who already dealt with a U.S. Dollar shortage - are now dealing with even more shortages.
"Dollar shortages are the mirror image of the Fed’s “QE infinity” program and the reason it rapidly created swap lines with 16 central banks in industrialized countries in March. At that time, the pandemic had triggered a kind of global bank run into dollars. Debtors in European and Asian financial capitals who’d borrowed in dollars scrambled to buy them to cover margin calls on their collateral, which in turn sent investors racing to secure access to the same USD safe haven. As Jill Carlson wrote for CoinDesk, the Fed had no choice but to “turn on the taps” to feed the world’s demand." coindesk
"liquidity injections are far from evenly spread. " coindesk
What is interesting is that a lot of people have spent significant amounts of time talking about inflation and the injection of cash. Not as many people are talking about how those injections aren't being well-distributed overseas. Instead of rampant inflation, we're seeing the rich hoard all the USD while everyone else is scrambling to try and hedge against local fiat currencies that are rapidly being devalued.
"This is what’s happening in oil-exporting Nigeria, where the collapse in the price of crude has combined with the global dollar shortage to create a real USD crisis. It’s no wonder that Africa’s biggest economy is the biggest contributor to the pickup in the continent’s peer-to-peer bitcoin exchanges." coindesk
We tend to talk about crypto collectibles in this space... what about USD collectibles? Getting USD has never been a problem for me and reading about how people in other countries can't get access to USD and think of them as "rare" is eye-opening.
While some of us are sitting around and worrying about the deflation of USD, others around the world would cut off a limb to obtain some.
"“USD bills are getting like a rare thing, like a collectible,” says journalist Javier Bastardo, who spoke to me from his electricity-challenged home in Caracas. “So, people are finding new ways to avoid the depreciation of the bolivar.”" coindesk
So Where Does Hive Fit Into The Conversation?
This article (and many similar conversations on the topic) discusses the usage of BTC and stable coins as being safe havens for people across the globe who lack access to USD. It even talks about various forms of earning crypto by trading time/input on different websites.
"One way, they are doing this, Bastardo said, is by “doing microtasks, connecting to a website where you can earn 10 satoshis (0.0000001 BTC) for doing different things.”" coindesk
"Previously, on-chain bitcoin fees – currently around $3 per transaction – were too high to sustain the kinds of micropayments made for these many small tasks. But advances in the layer two Lightning Network, which allows for secure off-chain transactions, now mean that sites such as Stak can affordably provide these money-earning services to their customers. Stak users in the Philippines and Argentina can earn enough satoshis to buy smartphones offered on the site." coindesk
Many people are out of work. Many people lack access to USD.
Many simply need a way to bank themselves. I think Hive fits well into this conversation. While the world begins to look at BTC/stablecoins as new forms of wealth preservation and means of payment, I think the HIVE currency needs to position itself as one of the many options available.
Not just an option to store/transfer wealth, but also as an option to actually earn wealth and essentially earn the freedom to bank yourself.
Many people in these countries can't even access a portal to convert their FIAT into Crypto. Buying a chunk of crypto in order to "opt-in" to the crypto industry isn't an option for such individuals.
Instead, they could opt-in by doing various things on the Hive blockchain to slowly but steadily earn the ability to bank themselves and join the new global economy.
"“What people want in Nigeria or in Venezuela isn’t really bitcoin but the U.S. dollar,” says Alejandro Machado, a colleague of Carlson’s at the Open Money Initiative. “So if you can have an asset that mimics or behaves like dollars perhaps we have a solution.”" coindesk
Why HIVE?
Obviously, I've been on Steem Hive for nearly 4 years, so it's easy for me to shill the value of using HIVE and being a part of the Hive blockchain.
What is more important though are the core characteristics of the Hive blockchain and HIVE token that I think go understated to the broader crypto space and world at large:
- Fee-less transactions
- Instant settlement
- Low barrier to entry
- Built-in social features
These are many things that you've probably already heard. With TX fees on BTC at ~$3-$6, it's hard to justify micropayments of any kind. Hell, I won't even send BTC to anyone unless it's over $500 because paying anything more than 1% in fees feels like a crime to me.
With that said, I send small dollar amounts to people all day long. I even give out these rechargeable tips (upvotes) which don't cost me anything and are worth pennies and even fractions of pennies.
I do all of this with 0 transaction fees thanks to Hive. With Hive, people can opt-in and start blogging or doing other hive-related activities and earn something.
Most people aren't going to come to Hive and earn thousands or hundreds or even $10 a day. But when you look to these developing nations and places that lack access to basic finance including the USD, it makes you wonder what earning $0.10 worth of HIVE or $1 worth of HIVE per day could mean for their lifestyle.
It might not pay their bills. It might not make them wealthy.
What it will do is opt them in to crypto and I think that is one of the most valuable propositions that Hive offers in a time like this. Hive is not perfect, but it is far and away superior to the access that many of these global citizens experience today.
p.s. ICYMI the new version of Hivestats.io just dropped today 🦁
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I didnt miss the new version of Hivestats.io. Every should check it out.
As for the gist of the article, this is absolutely correct. There is a USD shortage, something that happened very quickly after the pandemic fear set in. Markets crashed, everyone rushed to cash (USD) and it is still being held. Much of the money "printed" by the Fed is still sitting in the banks' vaults. They are not expanding their lending in these times but, rather, constricting it.
On the bright note, cryptocurrency usage is increasing in the areas mentioned. Africa now has over $12 million in Bitcoin transactions weekly, an all time high.
Sadly, HIVE does not get the attention it deserves since there are many advantages that the entire ecosystem offers. It is only a matter of getting people involved in whatever capacity they need it for.
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Yes I was looking at that transaction data across the globe. Interesting stuff as people realize that crypto's real-world use case is actually coming into fruition right before their eyes.
HIVE will get the recognition it deserves, but only if we spread that recognition and show people what this chain is about
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Bitcoin often served as a refuge when countries like Greece and Venezuela lived through their economic problems in the past. This has brought and brings together more people interested in escaping these crises. Today's crisis is this pandemic.
Once again BTC is the protagonist in yet another crisis, people from my country said they took their money from government aid and put everything in BTC. Speaking of which, reading your post I remembered the times of faucets ... wow ... every hour it was 100 to 1000 satoshis lol.
The transfer fees, it didn’t make sense to transfer a low value in BTC to someone else, it was just losing money on the fees. Now I believe that this is a great opportunity for anyone. In the past when I was in a very difficult financial situation, STEEM helped me a lot in a few months, used it to pay my energy bills and I know the real potential that Hive has for the future. Time will bring us the rewards.
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Thanks for your perspective. It's always interesting to hear how crypto is used in various places around the world. I think the use case and value that Hive can bring you is only going to grow with time. I know that second-layer tokenization like LEO can also add some much needed value on top of normal Hive activities. It's been about 1 year since the creation of second-layer Hive tokens like LEO and I think we're just seeing the beginning of what's possible.
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I am earning some pretty decent passive income on Hive between renting Splinterland cards, mining Sim token from playing DCity and the Dividends my Gamer tokens earn on KryptoGamers. As of now, it's almost $5 a day!
Luckily for me, I still have a job through this tough economic time we're all living!
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That's incredible! This is a great tie-in with the above conversation with @fknmayhem about how much people actually need to earn on Hive to make it worth it.
I'm glad to hear that you're able to make that much and do it in creative ways like DCity and Gamer. These are both layer-two integrations on top of Hive and I believe that we're still in the beginning stages of what's possible with these types of apps/solutions. Keep up the good work!
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Those are decent passive earnings. How much did you invest in both games?
!ENGAGE 30
ENGAGEtokens.The perspective of HIVE emerging to the mass due to its fee-less and simplicity is one that I can identify with. Tokenizing the web is one way for anyone out there to gain in addition to a job or without.
Totally agree. Hive is easy to use relative to the rest of the crypto space and I think the tokenization happening here is a revolution in-and-of-itself. We just need to keep moving the needle forward
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There is one oversight here tho, and I’m going to illustrate that with what “earning $0.10 worth of HIVE could mean for their lifestyle”.
$0.10HIVE/day would not even be sufficient for most people to pay their prepaid mobile data in most of those countries. One of the biggest issues crypto faces is that we often talk about the unbanked but only very rarely talk to them.
Interestingly we recently had the topic of cost of data over @tarazkp. Feel free to jump straight to the comments.
One of the reasons why I joined this (former) chain is because of the huge potential of exactly helping those demographics, maybe some day even offer them a certain level of social mobility. The platform is awesome for that, but we still lack a massive level of token utility to make it interesting for investors. If we don’t deliver that, we will mostly be a downpressure token and achieve only limited results, even more so if we want to be one of the tokens who do make a difference in, for the lives of our members.
Because due to the cost of data, depending on the targeted countries, you will need to achieve an average above 1HBD/day to be earned after deduction of exchange, transfer, and local cash out fees for the people to experience an actual noticeable difference in their life. Meaning a bag of rice to cover the next week. (Not counting the staked earnings, 1/13 is IMHO often not tangible enough and definitely not a culture we want to instill within those demographics, instead save for some years and build a house with the savings after 7-8 years).
Interesting point about the data costs. We often forget this in the west as a hardwired connection for $30 a month is something most of us are just habituated to!
If data costs came down and we were to get millions of users all cashing out their micro-earnings, we'd still need investors to buy their Hive to keep the price up!
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With the exception of Central and Southern Africa, most continents now have decent available bandwidth capacity. So if people can get a wired connection, costs are dropping massively. At the lower end of the bottom it’s still expensive though, and computers also consume a lot of electricity which is another issue in many third world and developing nations.
Mobile phones and data solved a lot when it comes to access, but at a cost. You will still find people who prefer the Internet cafe cost over mobile data.
You will also notice that in those places the poorer people often use older mobile devices, hands me down gifts when someone in the family on a contract got a new device. Or the cheapest second, or third hand phone they could afford. For example two years ago one of the most widely used phones in Nigeria was the iPhone 5(S), launched in 2013 (2014 for the S). If your crypto relies on an app, for older Androids that could mean they can even not run the app. Nor earn.
Aware of that, it’s always been something I found marvelous about our platform: it runs in the browser. No app needed, no compatibility issues, and even if you’re on an old device... it works.
Most definitely because more claimants results in less vests earned on average. The equation then only works if token value goes up.
Thanks for the input. I agree, we need to have more conversations with the people in these situations because it's hard for an outsider like me to quantify it accurately.
I think 1 HBD+ per day is achievable for many creators/users on this chain. There are a lot of different ways to earn and if someone is consistent, hard-working and creative in their daily use I think they can achieve it 100% of the time. Luck has a factor (especially in who notices your content/activities), but I think consistency is the biggest thing here.
It's an imperfect system and I think the EIP made things a lot better. We need more developments like that along with better community moderation, second-layer additions, etc. To use a more personal example from my standpoint -- the LeoFinance community and our LEO token is - in many cases - providing more rewards than HIVE for consistent authors in our community.
Even if HIVE has an imbalanced rewards system, other tokens can offer more balance (not perfect balance, but a different balance nonetheless).
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The EIP definitely made things better. Also from token utility perspective.
It will be interesting to see what layer2 solutions we will see. And how agile teams will be developing their token utility. As someone with mostly online startups background, I am eager to discover the economic models which layer 2 platforms will bring. Developing consistent bottom support is a whole new game compared to developing a biz model which rewards the team and valuation.
!ENGAGE 50
ENGAGEtokens.I think there's a number of people in lower income countries already adopting this approach on Hive.
I've long thought along similar lines, that platforms like Hive should be a great boon for people in developing countries.
There is the potential for direct peer to peer mutually beneficial development, free of the horrific injustices of the 'development industry' (e.g., The World Bank, developing the world one banquet at a time, the 'Lords of Poverty' is such an apt name ).
The problem here is that so far earning in this vein on Hive has seemed to come in the form of pretty poor quality content, often in response to someone with a few hundred Hive power running some kind of initiative and then handing out $2 upvotes.
That push-up initiative last year was a great example of that, and I've seen similar things since.
That kind of thing makes me very uncomfortable - it makes Hive look somewhere between cultish and feudal, and probably not attractive to investors.
It's something I need to think through a bit more.
I have actually started using HBD savings recently myself, I like to have a certain amount of cash liquid, and a 3 day wait is fine (otherwise I'd just spend it on the platform!), so I've got faith in that as a stable coin.
Cheers!
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Yeah those initiatives definitely come with some positives and negatives. Good for engagement, bad for professionalism.
The conversation in these comments has been largely about layer 2 and the tokenization on Hive that is allowing for a better distribution of rewards. I hope that LEO can continue to distribute rewards to a wider and wider userbase of people who add value to it.
Now my mind is spinning with ideas about layer 2 solutions, so I'll probably write a full post on why I think that's the future of Hive and other similar systems that are built on the idea of "rewards"
:)
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I agree with what can Hive do for people who are really in need in poor countries
It's pretty incredible. I've always loved to dream about the possibilities of a global rewards system that works :)
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It is indeed amazing
Hive has huge potential and is certainly helping many people. Particularly speaking, I think that after the period of economic recession that practically everyone will experience... Being at Hive will bring great rewards.
I've personally seen dozens and dozens of people from around the world who have benefited from HIVE rewards in one way or another. I think we'll continue to see that grow as more people learn about the opportunity here and as the rewards mechanisms on Hive improve as well.
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