Sometimes we come across numbers that are mind blowing.
Hive offers fast and feeless transactions. This is something that can radically alter the payments world. Quite frankly, this is something that is ripe for disruption. As the leading blockchain in this area, Hive can really make an impact.
We are in the middle of a series the details building a currency. This is a good article to interject so that we can see exactly how bog some of these markets truly are.
Here we are going to focus upon payments, specifically the revenues generated from them.
Moving money around is a lucrative business.
As stated in other articles, a great portion of the monetary system deals with communications, i.e. digital networks. The largest financial institutions have some of the most robust computer networks in the world. A corporation like Visa is really nothing more than an information technology company. They are in the business of processing data and getting the right information to where it needs to be. There is very little actual currency involved in what they do.
For this reason, cryptocurrency can offer a true solution. Blockchain is a digital network, global in scale. Like Visa, one of the primary roles is to maintain a ledger of all transactions. Hive adds more to the database but this is one of the features at the base layer.
Hundreds of trillions of dollars are sent globally each year. This is enormous business and payments is right at the center of it.
The chart above is from McKinsey and their 2022 Payment Report. For the calendar year 2021, the total revenue from payments was $2.1 trillion. This is just the transaction fees charged by banks and other financial institutions. Essentially, this was the fees associated with using their network.
Want to send money, pay them.
We also see that, according to the forecasts, the payment revenue is expected to top $3 trillion by 2026.
Do we understand how big this really is?
To put it in content, here is a list of the top countries by GDP.
The forecast of $3.3 trillion would put it as the 5th largest country in the world.
Remember, this is not the total amount transmitted but the revenues they take. There is big money being a gatekeeper. Perhaps now we see why the banks and other money transmitters want to either control or destroy cryptocurrency.
There is a lot of money on the line and this is a major threat.
The fees charged are simply for the right to send the money. Each time you swipe your credit card, someone is making money off that transaction. Every step of the way, fees are being levied.
This is how we can get numbers that run into the trillions.
Hive is a decentralized network that has one of the fastest settlement times. This is a point worthy of stressing due to the fact that we are dealing with so much potential.
When we discuss the future value of Hive, do we account for the possibility that, as a payment system, it is faster and less expensive than the existing system. If we are comparing products, Hive is head and shoulders ahead of the rest.
How much does it cost to send money from a Bank of America account in the U.S. to Laos? How about a credit card payment by an Australian made in Bulgaria? What does it cost a merchant in the local mall each time a customer pays with Visa?
In all of these instances, the cost of utilizing Hive is zero. There are no direct fees, either transaction or merchant.
Instead, one needs to have some of the access coin, $HIVE, staked which allows for one to engage with the network.
This is a trillion dollar killer.
The above chart shows where the growth is projected to come from. Notice the black section of each area which is fees on accounts and overdrafts. Look at the percentages in some of those markets.
Of course, Hive has none of this. Holding a Hive account costs someone nothing. This is not the case in many areas of the world.
Once again, going back to the idea of valuation. What is Hive worth if it is taking billions in revenue away from these institutions. After all, blockchain is, by default, designed for cross-border payments since it doesn't even recognize location. To the blockchain, it is just a transaction from one wallet to another. Where people access it from is of no relevance to the network.
The potential is before us. We already see Hive penetrating countries that are most affected by the fees that are being charged. When we discuss the events in Cuba, Venezuela, Nigeria, and other nations like this, we can see how the Hive payment network is a better option.
Of course, we can add the fact that we also have the Hive Backed Dollar, which eliminated currency risk from the equation, and we gain some insight into how truly disruptive this can be.
How much better off would the population of the world be if the $2 trillion in revenues generated just from payments was in their pockets (wallets) instead of the financial services industry?
This is what a network like Hive can do.
And think of what the value of that will be in terms of market capitalization.
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