In the world of blockchain, the value of a project is directly related to its development and adoption. But how exactly does this process work?
To help illustrate, let's consider an analogy using an empty disserted island.
Imagine a group of people stumbled upon an uninhabited island in the middle of the ocean. At first, they built basic shelter and spent time enjoying the island's natural beauty. However, as they spent more time there, they realized the island lacked necessary resources such as better shelter, heating, and water filtration. So, they brought in technology from their home country to improve their living conditions.
As more people heard about this island and wanted to visit, the original inhabitants saw an opportunity to create a resort. They charged visitors to use their facilities, and with the revenue collected, they expanded and improved their resort, attracting even more visitors.
Eventually, the island's population grew, and the need for schools, medical facilities, security, and governance arose. To manage the island's finances, the inhabitants even created their own currency, which soon gained value and attracted investors from other parts of the world.
This is how value of an island's currency can be created!
It should be clear by now that the island's success and value can be directly attributed to the development work that happened on the island. Similarly, in the world of blockchain, the value of a cryptocurrency or blockchain project is dependent on the development work happening within the project. People build applications and provide financial services on the blockchain, and those who wish to use these services must buy the cryptocurrency associated with the project.
In this analogy, the island represents the Hive blockchain project. Hive is a censorship-resistant blockchain that offers fast and feeless transactions. The beauty of the project has attracted good people to build and develop it further. Just like the original inhabitants had limited influence on how the island developed, Hive's value comes from the contributions and adoption of the wider community.
In conclusion, the value of a blockchain project is dependent on its development and adoption. Just like a resort island that attracts visitors and grows over time, a blockchain project that offers useful applications and services will attract users and investors, leading to sustainable growth and increasing value.
Hive is an excellent example of this, showing that a blockchain project with the right fundamentals (i.e. censorship-resistant, feeless, decentralised) can accrue significant value over time. Hive also has its layer 2 projects. See: Onboarder's fundamental knowledge series: Base layer and layer 2.
This is certainly not some investment advice for anyone to follow, but when investing in a blockchain project, it would be useful to think if island has a future! If it does, its token could likely accrue value in the future.
Posted Using LeoFinance Beta
