Hive: The Epitome Of A Compounding Machine

in #hive-1679222 years ago

Hive is a compounding machine.

This is something that many do not realize when they first join the ecosystem. It is a trait that is going to generate a huge amount of abundance. This, of course, applies more to than just wealth although we will discuss that since it is something quantified.

Throughout the entire ecosystem, we see this taking place. It is difficult to notice in the early stages yet it exists. The decentralized nature of things means we are going to see thing go exponential at some point. This is in alignment with some larger trends we see taking place around the world.

In this article we will discuss how Hive operates and where it can lead.

worldgdpoverthelasttwomillennia.png

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The Epitome Of Compounding

With the passage of time, we see growth. This appears to be a basic law of nature. Hive is a complex, organic system that takes on a life of its own.

Many look at something like this and wonder how can it be successful? There is no leader, no face of the organization. From what we can see, there is no plan as to how to progress forward. In many ways, things move slowly.

That said, with a little digging, we can see how the concept of compounding is present. Everything on Hive ends up tying into something else. Nothing operates in a vacuum. This is an important concept to keep in mind.

Everything has an impact and can be leveraged for larger gain. Again, this is more than just financial although it does apply.

In a realm where things are permissionless and open, the impact in one area can extend to another. This is how we realize non-linear effects.

Hive captures this with development, users, money, and reach. There are many ways to feed into this system. It is slow at the beginning yet, over time, does accelerate.

The chart above show the basic concept of an exponential growth chart. It is mapping out global GDP. As we can see, over the last couple centuries things exploded. We want to use this concept when thinking about Hive.

Hive As A Compounding Economy

We often discuss the idea of Hive as an economy. At the same time, we look at ourselves as individual businesses. From this perspective, we can conclude there are roughly 8,000 businesses operating on Hive.

Here is where things get interesting. As each of these improves individual performance, in whatever way that it, we can see how the entire ecosystem grows. Looking at the chart, it might not be easy to see since the early days look rather flat. Of course, we also notice the flat period can go on for a long time.

That said, we also have to keep in mind that this is a linear chart. If we look at it on a log scale, this is what we see.

worldgdpoverthelasttwomillennia 1.png

This gives us a better representation of what took place. From this, we can easily see there was progress being made yet it doesn't look that way from the end perspective. In comparison, things were slow. Another way to describe this was an economic grind.

Isn't that how it feels each day on Hive? We come together and grind our way forward. The early days on our Hive journey are difficult. The growth of our accounts is slow.

Nevertheless, the charge clearly shows what happens over time. As the entire ecosystem expands, our personal stake also grows. Those who spent more than a few years consistently active on Hive realize this.

Imagine for a moment if you were immortal. Let us say in addition to this capability, you could leave Earth and head elsewhere. Being one of the early Earthlings, you spend the first 1,000 years on this planet. However, after that time and effort, you had little to show for it. Thus, you made the decision to head elsewhere in the year 1,002.

Notice what you would have missed?

Individual And Collective Compounding

Hive is much different as compared to 5 years ago. Back in those days there was one reward pool. We had no second layer tokens. One received $HIVE and HBD. Today, we know the story is completely different.

We also had a lot fewer applications. There were basically two front ends to utilize. Games were rather limited with Splinterlands still in the concept phase. We had zero NFT integration since that wasn't much of an industry. As for DeFi, we were basically left with curating and delegating HP.

From this perspective, it is easy to see how far Hive has come. Even in the last 3 years, things changed a great deal. Now we embark upon a new year with PsyberX, Leofinance, and Ragnarok entering an alpha period. These are just a few of the items on tap for 2023.

We recently learned that Podping is now accounting for 15% of the updates that Podcasting applications use. This project is inserting itself as the future indexing protocol for that industry. How much value does that provide to Hive?

All of this is reflected in our wallets. Anyone holding $HIVE is participating since there is stake. Hence, one has a vested interest in the success. Of course, there is also the incentive to enhance one's holdings.

Here is where the "Hive as my business" idea comes forth. Whatever one is involved with, there is a monetary component. Even if something is not direct, simply holding the base coins (along with layer 2 tokens) means that one benefits financially.

Think of all the different ways that one's wallet can grow. We have rewards from posts and comments. There is curation. Staking of coins or tokens often provides a significant return. There is adjustment for inflation at the base layer.

Of course, much of this is enhanced by having more followers. When we get involved with a community, our reach expands. Through this, we can get involved with some "local" whales. Their support within the community can help our cause (business).

We then can turn this concept to development. As more applications roll out, more options are provided. Even if there is no token associated, we can enhance our reach. There is another team to support. These people could be onto something huge. We offer our services (time and effort) in return for some future gain. This, of course, can come in many forms, most indirect.

Then we have the relationships that can be forged. This is a vital component tied to resiliency. There are many on Hive who will not abandon the community because of the bonds they have to others. In fact, that is one of the reasons Hive came about. Some did not like the idea of their friends being beholden to Justin Sun so a fork was implemented.

All of this serves to put Hive on a path that can mirror what was above. From a pure financial perspective, those active in different communities can see this with their own accounts. If one charted their holding in coins and tokens, it is easy to see how a year or two of activity can look like that.

This is what compounding does. We can both actively participate to enhance our holdings while enjoying a passive return that comes from some of the DeFi tied to Hive.

At the same time, with each passing year, more options are available due to the continued development and building of the ecosystem. This is where the exponential gains ultimately will come from.

Hive really is the epitome of a compounding machine because we have the benefit of 8,000 businesses operating in a manner that expands their own stake. Through this, we can see how some of those actions are having a larger impact.


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How does it correlate to population growth?

For much of history, there is likley a close correlation since people were the primary driver of economic output. In the last couple hundred years I think the fact that we saw so many technological advancements tells me it is less of an impact than it was.

Just consider all the productivity we have that simply comes from computerized activity and automation.

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Yes. Population drives the demand side of the equation.

Technology productivity etc. give us more for the same value (or money once you take out the noise of inflation) given up.

I agree Hive is the perfect example of how compounding works and very few other projects even come close. I hope many read your post as they need to understand the power of holding stake along with compounding as you are not only holding, but more importantly growing much faster over time.

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The rewards earned on this comment will go directly to the people( @seckorama ) sharing the post on Twitter as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.

Excellent article. New users should work towards enhancing their reach more than focusing on anything else. There is nothing one can do by just posting. It's a community if you want to engage only on blogging side of things. And, I can attest that forging relationship is not easy at all.
But, this is the system we have and this is how you compound your money, relationships and network.

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The key to being on social media is being social.

Engagement is key to grow the user following.

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Could not agree more

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When the price is relatively flat like it has been lately, it can be hard to see the effects of compounding. Especially if you have one of those mid level accounts. I feel like every day when I collect my rewards and look at my "value" it is always right around the same number. All it takes is a little pump in the price of Hive to really see the difference though. I remember when Hive jumped up to $3, I had to quickly take a screenshot of my account value because I knew it wouldn't last. The actual growth of my account really became clear in that moment. Even though we had never reached $3 before it was still pretty obvious how much it had grown since the year before.

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Hive has come a long way, it doesn't take a genius to realize we are dealing with a compounding machine on Hive, it is unfortunate that some are deterred by cents in tokens but fail to see the bigger picture.

It's definitely a compounding machine and everyone can participate just by putting in the time and effort. If you don't have enough to pay for a Splinterlands spellbook, you can just blog about it and earn it. There is HBD saving, play to earn games and even diesel pools for people to get involved.

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Heck, 5 years ago HIVE was masquerading around with a different name, haha !LOL
Talking about compounding, you can invest in HBD, put it in savings, and get 20% compounded monthly with minimum risk. That is hard to beat anywhere!

Some jerk threw a bottle of omega 3 pills at me.
Luckily my injuries were only super fish oil.

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It is slow at the beginning yet, over time, does accelerate.

Isn't that how it feels each day on Hive? We come together and grind our way forward. The early days on our Hive journey are difficult. The growth of our accounts is slow.

Yeah, it feels that way, but the important thing though growth is small and slow, the fact that it is growing is already a motivation in itself.

I will add WOO to the list of projects that I expect to be launched by 2023.

Hive really is the epitome of a compounding machine because we have the benefit of 8,000 businesses operating in a manner that expands their own stake.

Are you referring to daily active users as businesses?

!CTP

I havent followed WOO that closely but it is good to see how things are moving ahead. Projects that are not on my radar might be game changers also.

We will see what they do.

Yes. Each individual on here is a business since much (if not most) we do on here is monetized to some degree.

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Yes, that's a great way of looking at active Hivers.

Learning never stop
Thanks for educating me through this post.
Through your post, I’ve acquired some good knowledges about hive.
Thank you

Keep learning about Hive. It will help you.

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Thanks for the reflective article on how Hive has evolved and keeps evolving, those of us here 4-5 years ago can attest to the growth. Looking back and now at the present, I have reasons to believe anyone not on Hive or on Hive and not active is missing an opportunity that isn't common out there.

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To be honest, there are platforms that seem to be following this hive concept/structure but aren't as interesting and progressing as hive. I see hive having a very promising future even though it may not be that obvious now. For now, I still prefer hive and kudos to everyone putting in their best for the progress of this platform.

This is awesome @taskmaster4450. Indeed, you have said it all. As a newbie, i must say it's a bit slow but so is everything in life. This is really inspiring.

It's generally why everything built on hive is aimed at further compounding as this traits passes down from the main flagship project to the projects that are built on it. Splinterlands is massively doing this. One doesn't even have to be a whale, it's crazy, the hive model is just so miles ahead

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Splinterlands is a great example on many levels. It did pull a lot of users in, creating a great many accounts. We also see the wealth generated by that game for individuals, albeit down since the peak but it is still there.

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It's obviously down since it's peak like you've mentioned but then it's still a super compounding play2earn as well.

Kind of a rigged chart when you look at it over...2000 years. Unless you are attempting to set up wealth for your progeny of the year 3000, that crazy spike doesn't really mean much.

Good article though.

Here is the chart over 75 years.

Does that suit you better? The point still stands.

worldgdpoverthelasttwomillennia 2.png

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I wasn't saying the chart doesn't prove an excellent point, just that I, personally, don't have the scope to make an investment that will span 1000 years, or even 75 for that matter. 10 years is a very long period of time in the life of a human being, and 50 even moreso. If I live to 100, it will be half of my life.

Setting up generational wealth in the context of an ever increasing world economy is a daunting task.

Screenshot 2022-12-16 205347.png
That is a chart of just the last 60 years to current, by %, of the world GDP growth.

When we get involved with a community, our reach expands. Through this, we can get involved with some "local" whales. Their support within the community can help our cause (business).

I love this concept! It's with this mindset that I join communities and engage with its members. Communities help expand one's network. With consistency, the compounding effect becomes self evident.

People only focus upon the Hive whales seemingly overlooking those with large stake in some of the communities. It makes sense since most of those tokens arent worth much but a community breaks through and it is a different game.

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Bang, I did it again... I just rehived your post!
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As I have long believed, the whole point of social media/social blogging is to be social. To derive these benefits, you not only have to create something engaging, you have to BE engaging. Which — at least to me — means you have to approach things as a content creator first, and an investment opportunity (a distant) second.

Even so, I do worry about the influences of "the external flow." To paraphrase one of my late uncles: "It doesn't do you much good to be the world's best sailor on a sinking ship..." The greater cryptosphere "ship" seems to be buffeted by some extreme storms, these days...

=^..^=

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A good example of original content that contributes to sound knowledge about the potential of Hive. I have landed very recently, my first post is not even three days old, so I see myself reflected in the sense that the beginnings are hard, difficult, but I am very determined to bet on these blockchain futures, and so your post has helped me to strengthen that notion.