Hive's flywheel effect: Why Hive will keep gaining in value?
As a new user of Hive for slightly more than a month, it is a bit of a struggle to figure out how Hive's blogging reward system works. The learning curve is rather steep and I still have a lot to learn about it. So, this is not a post to describe the exact reward mechanism and rules.
But I do marvel at the overall value creation now set in motion for Hive. There seems to be a flywheel effect here, the way I see it.
At the core of it, users get rewarded for posting and curating (voting), and Hive Power (users buying Hive and staking it) determines the relative magnitude of rewards. So the two influx of value are:
- Users' effort in posting and curating posts
- Users' purchase of Hive to increase Hive Power.
Overall, as users contribute to the healthy growth of this Hive network through quality posts, the overall 'usability' value of it increases. There is more good stuff to read, and users stay. And if new users see that one can also earn something by writing, even the simplest stuff, it is going to lead to onboarding. Accordingly, more users will be willing to buy some Hive to participate in this ecosystem, and the value of Hive will increase.
With that, the value of the reward given out in Hive will be increased.
This is the flywheel effect I see.