Does the economics of supply and demand work for Tokens on Hive?

in #hive-1063162 years ago

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I am going to have a little mussing here and I hope someone like @taskmaster4450 will jump in because I am no expert.

Does the economics of supply and demand work for Tokens on Hive? My thoughts are only sometimes. As I got ready to start writing this post I looked at a few tokens like CTP, Alive, ListNerds, LEO and to me supply and demand does not work overly well. When the supply tightens the demand may go up but the price does not always. Why?

I can only give you my thoughts as to why. And there are two reasons I can come up with. I hope others will share their thoughts and let me know if I am wright or wrong or a bit of both.

Number 1: Dumpers. People just don't care, they earn tokens they don't want, the dump them to get rid of them and the next available sell price. Great for people buying not so good for people looking to sell.

Number 2: And I believe this is the big one. We, as in Hive, is operating around this planet with different economics in different countries. Someone can sell say for example 100 tokens of their choice and get enough Hive to put food on their table for a week. Whereas other places that amount of Hive would not buy a coffee.

Besides changing the minds of the masses I think this will never, or be very hard to change. But I thought I should talk about it. When you analysis and see people buying over time and they are buying high or low then there are buyers. I am happy for them that they are picking up deals but the sellers/dumpers if they paid attention could be putting a months worth of food on their families table instead of a weeks worth.

What do you think? Am I out to lunch or did I nail it? Let me know.

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Bradley

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I do not know enough about crypto-economics. I just know that I am buying a lot of crypto on the cheap side.

Good topic, Bradley.
I hope we can get a good answer.
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You are making a killing. Good for you my friend 👏

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Thank you so much 😀 absolutely amazing and appreciated 😀

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Interesting mate i think it maybe even more complicated that the points you raised although very valid have the best day buddy
Thanks for sharing on Listnerds😎
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Thanks 😀 it started a great discussion 😉

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Supply and demand works, however most of the tokens in the secondary market have just 100's to a few thousand owners. Each are easily manipulated by just a few orders. It is also hard to determine a real value for many of the tokens. What can be bought with the token?
!CTP

Thanks for your feedback. Makes sense.

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In my country, 10 hives at the current exchange rate is
1/40 of the cost of renting an apartment
or
2 bottles of vodka
or
6 packs of cigarettes
or
food for 1 day
or
Internet payment for 12 days

I would need about 240 Hive.

Good example here of the difference.

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At today's price 10 Hive gets me about $6 which is enough for a small fast food lunch. Greast post.

Thanks my friend. 😀

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Yes, supply and demand work. Even for the tokens on Hive.
Tokenomics explain the supply side.
The real issue is the demand side. And that boils down to use cases. What can I use my tokens, CTP, ListNerds, LEO etc, for? What can others use my tokens for, ie why would they buy them?
And that is a difficult question for many tokens to answer. And that's why they fall in price. There are more sellers (people who do not want the tokens for various reasons) than buyers (people who have a good reason to buy the token).

But my point was when there are enough buyers but people don't see it and they are selling cheaper than need to. Example: a brick and motor store has a line up outside for people wanting to by a widget. So the owner decides to put it on sale. Makes no sense

It rarely does! Unless he is looking to use the discounted widget to upsell a higher value product.
The same with stocks. Most people (institutional investors and retail investors alike!) are more likely to buy a stock that is going up than one that is going down. Irrespective of the economic performance of the underlying company.
In the case of Hive tokens I suspect many sellers just want to get their "cash" rather than spending some time doing their own research. Even if this is to their detriment.

Make sense but is sad indeed.

Great post and thoughts about tokenomics Bradley, and I see you got a few replies and I hope you will get more, keep up the good work and stay awesome.



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Thanks my friend 😀

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Stay awesome Bradley.



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@thisisawesome! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @bradleyarrow. (3/20)

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Oh, this is the topic that has been going around in my head for 3 days now and has been transferred to paper and taped to the wall in front of my eyes. I think it deserves its own post! And the title is "Liquidity. But in general you are right, in my opinion. We can never get rid of the human factor. They will always sell. And we should wait for a bull market...)
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Great minds... I agree 👍

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My knowledge of tokenomics isnt good enough to know. It is great you bring up the subject so we can all learn more. Maybe Task can help us as he seems very knowledgeable.

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Absolutely. That is why I mentioned him. Hope he replies.

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Interesting thoughts Bradley, and your 2 points are part of the picture, but there is more to it than that, first of all supply and demand is always working regardless if people have the whole picture or not, then you also have market manipulators as well, people who are deliberately moving the market up or down to make money, and they are present on Hive-engine too, the last few days big swings in !ALIVE was caused by one person with multiple accounts dumping ALIVE to try and cause a sell off into his own standing buy orders, which he would then sell again for a higher price, he was not entirely successful in that though.

@bradleyarrow! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @flaxz.alive. (3/30)

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Oh my. Great information my friend 👍 thank you.

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