Few have ever considered what it takes to create a nation. What is the plumbing that has to be put in for it to operate? Since most of us arrived in countries that were already established, it warranted no consideration.
Sure, we could read the history books and study the early founders. However, that only provided a glimpse into what is required.
With the development of blockchain, we are seeing this become a pressing issue. Discussions about what is necessary are now occurring. The idea of the network-state is upon us. Many are starting to consider the implications as we proceed forward. What we do know is this will change everything.
Blockchain provides an interesting scenario. It is a "nation" that anyone can enter (as long as it is permissionless). At the same time, all are open to acquiring stake. In fact, in most, you need it to operate.
In other words, to truly enter the system, one needs to get a hold of the value capture coin.
Liquidity Plus Speculation
These systems can suck in liquidity. This is because of the combination of speculation and real world usage.
Anyone who is around cryptocurrency for any length of time understands the speculation aspect of things. This is 90% of what we see discussed. What is happening to the price of the coin or token.
That said, it does serve as a vehicle to pull in liquidity. This is powerful when the bull market is running. However, we all now that boom times are followed by busts. It is the nature of markets.
Here is where the real world activity comes into play. As services are available that people want, the requirement is there to hold the coin since it is the gateway into the ecosystem. This is a fundamental necessity of the system.
Of course, real world is subject to the business cycle, something that is can be painful when in the clearing out phase. It is something that many have tried to alleviate since we tend to dislike pain. This is where resiliency is vital.
Until human psychology changes (completely), the business cycle will be with us. This is because the tendency is to overextend during the ascending periods which leads to excess. Inevitably, this has to be cleared out.
Much of this is tied to the plumbing of the country. With Hive, we can see how this is very strong. The base layer operations are some of the best within the blockchain realm.
Value Capture For All
The advantage that Hive has is that it provides value capture for all. This is true at both the base layer and whatever layer 2 projects are created. Proof-of-Brain (PoB) is a serious distribution mechanism. It is also something that separates Hive from most everything else.
Look at most any blockchain, or its second layer tokens, and there is one thing that is constant: buy it. One needs resources to get involved. This is a problem since much of the world lacks any resources.
Another factor in this is people can get new money. The theory around this is called the Cantillon Effect. While some might be able to get LTC or ETH through faucets, that money is already distributed. It is not new. The same is true for applications such as NoiseCash where BCH was being doled out. That already existed in someone's wallet.
With Hive, the reward pools, at both levels, is new money. This means that we are reversing the Cantillon Effect. Average individuals are able to acquire the new coins or tokens created.
It is as if a laborer (or average worker) suddenly became a bank. Instead of being the 18th person in line, he or she goes to the front of the line. Since this is global, the person can be anywhere.
When it is the base layer coin being received, one is able to then to accumulate an asset that captures the value tied to the entire ecosystem. This is why they care called value capture tokens.
Wealth Creation Built On Top
Where is the [business]9https://leofinance.io/posts/@leoglossary/leoglossary-business)?
When it comes to Hive, if we are using the nation analogy, we can easily see the plumbing in place. What is missing are the businesses. If we are calling this digital land, where are the communities that engage in commerce.
Here is one of the major flaws so far. Ethereum was able to capture this since it was (is) the leading smart contract chain. This allowed for massive development of projects that bring enormous value to that network. Hive is still lacking this.
What happens when there are a number of people on Hive who are millionaires, but not in the base coin? In other words, the value generated was on something other than the base layer.
This happened for a brief moment with Splinterlands. Alas, the bear market ensued and most forgot. However, there was a ton of value generated from that game, some of it still in people's wallets today. The next bull will remind people of that.
Many have claimed we need a dozen Splinterlands on Hive. This is true. Again, look at the analogy to a digital nation and you can see why this is the case.
Driving Value To The Base Layer
One thing that we have to keep in mind is that everything we do on Hive drives value to the base layer. This means that the more projects we have, the better it is for the whole. This is a fundamental aspect to the premise of a scenario like this.
The circular nature of this cannot be denied. If Splinterlands becomes the most played game in the world, do you think that would impact the value of Hive? Of course. While this might be a bit outlandish, the idea of hundreds of projects driving value is not.
Hive has communities. Those can be thought of as cities. Just like New York and San Francisco (Silicon Valley area) add a ton of economic value to the United States, a few breakthrough communities will do the same. Splinterlands is a game which certainly can serve the purpose. There are, however, other communities which can excel.
Here is where the future lies. Hive will become a true digital community because it does offer a place for communities to form.
At this point, we cannot overlook the impact upon speculation. A bull run coupled with some communities starting to break through will unless a mindset that most do not presently have. They will see how layer 2 tokens can be of value. This is something that should be based upon the building of the community. However, we know how markets can get.
Either way, we are seeing a true digital nation forming. Liquidity is going to flow into the Hive ecosystem. There is already a project in place that is starting the process.
It is likely that, if successful, it will be duplicated.
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