People have a tendency to look at something based upon what they know. This makes sense since we establish our entire lives creating mental reference points which we add to. It is through this how we learn. One idea ties into another which them allows us to add more to it. This is also beneficial when encountering something new. Our minds look for similarities to create new reference points which to build. Often times these are correct since the situations are similar. However, there are times they are not.
I believe the cryptocurrency/blockchain world is one where this practice is flawed. The situation we are dealing with is not similar to what most people encountered before. Hence, their thinking creates some mistaken viewpoints.
For example, I believe a large part of the pullback in the last week or so is because we have so many new people, especially Wall Street types, who invested in cryptocurrencies the last couple of months. Since Thanksgiving, we saw a huge run up in the total market cap meaning hundreds of billions of dollars entered the space in about 45 days. You do not get that type of input in $2,000 segments. There were large purchases made.
The problem with people who are dropping this type of money is that, most likely, they were successful in other investing areas. Therefore, they are bringing their experience in the equities markets, as an example, to cryptocurrency. This is where the problem comes in. When you see a 10% drop in a stock, you are scanning the headlines to see if the CEO was indicted for something or there was an accounting scandal. If it goes to 15%, all bets are off, the thing is crashing.
Contrast that with the crypto world. A 10 percent drop can happen during one's coffee break. It is nothing. We see moves of 20%-30% that are standard. Hence, looking at this with the same mindset as the stock market caused a great deal of panic selling. People who are familiar with this market, and know what a decline really is, were not phased. Just HODL and it will go back up. This is how crypto is wired.
Therefore, I hope you can cast some of your old reference points aside to see things a bit differently.
Today, some of the richest companies in the world, at least according to market cap are Google, Apple, and Facebook. The first two are in a race to become the "first trillion dollar company" with Facebook not far behind.
But what do these companies have in common?
The answer is all three created ecosystems. That is where their value lies. People mistakenly believe it is in their product or service. While these are parts of the whole, they would be basically worthless without the ecosystem tying it all together. It is what underlies everything else.
Now let us look at Hive.
We know Hive is a blockchain on which applications are being built. One advantageous part of blockchain technology is that everything built reads the same data on the network. This is why a person can go from Peakd to 3Speak and still have access to one's wallet. That information is on the blockchain with the app being the interface into the data.
Cryptocurrency is essentially the first app that blockchains adopted. It is similar to Email for the Internet 25 years ago. That was the first wide spread application which was followed up by others including social media. On here, Hive is also a cryptocurrency which is tied to the blockchain. They cannot be separated. Hive does not apply to either the bitcoin or ethereum blockchains, only Hive.
Therefore, HIVE is the app that is intertwined through all other apps that are built upon the blockchain (at least the ones that use currency transactions).
These are the fundamental concepts of this blockchain.
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The companies I listed spend many years and billions of dollars developing their ecosystems. They work hard to protect it so as to not let people escape. I use that term because, when you look at it, people are locked in. Of course, they do not have much of a fight on their hands since human nature plays right into this.
I am often asked how I can make the forecasts I do. People seem to consider the idea that other blockchains will be geared towards social media. I agree. So won't that destroy the value of HIVE?
The answer is no.
For the same reason people are held hostage by Facebook, Apple, and Google, Hive will have people on this blockchain. That reason is also why people stay in the same house when a newer, better neighborhood is built not far away: it is too much of a pain in the ass to move.
People are lazy. If they are happy where they are at, they will not move. There needs to be incentive for them to do that.
Isn't that what the people who are marketing Hive on Facebook and YouTube are finding. In spite of a better system where people can earn more money and enjoy censorship resistance, most still remain where they are. Of course, who can blame them. Moving requires leaving what you know and all of those you interact with. This is a major hassle.
This makes ecosystems of this nature very powerful which is evidenced by the values of these companies that perfected it. We are going to see the same thing with Hive.
Hive has the advantage of being early to the game. While some like to make the comparison to MySpace, this is a completely different arena. MySpace was a closed system which was depended upon central decisions as to the direction it was taking. This does not exist on blockchain. Yes we can look at Steemit through the MySpace eyes and realize they could face the same perils. However, the network overall, is free to embrace whatever it desires. Anyone can put up an app. If many flock to it, then is a big part of the blockchain.
It is crucial to understand the value is not in the apps like it is in the non-blockchain world. The apps are a part of the ecosystem which is where the value lies. What is actually taking place on the network? That is what ultimately determines the value of a token.
So how is $1,000 for $HIVE possible?
At that price, we are looking $256B blockchain. Today, that sounds outrageous although it is not. At present, Bitcoin is just below that after the recent pullback. Bitcoin is by far the most popular blockchain in terms of investment dollars. However, it presently has some limitations to work through. While I do believe the people on there will figure it out and scale the thing up, this blockchain has some advantages over all the rest. The biggest, in addition to speed, is no transaction fees. This is enormous when you are looking at the micropayment world.
Social media is a prime example of an industry that is made up of ecosystems. In addition to Facebook and Google, there is the likes of Twitter which was innovative in its day but really is nothing more than a microblogging app. Yet people use it because all their followers are there. Again, it is too much of a pain in the ass to leave.
At present Hive has 50,000 daily active users on here. I can tell you, most of them are like me. We are not going to leave even if another blockchain pops up. Why would we? There is money being made and our connections are here. It would take a serious step backwards for that to happen.
Which brings up the point, how can it? While possible, it is unlikely. Right now Steemit is the flagship app, the one most use. However, if that started to go downhill i.e. go in the direction of MySpace, there are other options. At present there is Busy and Chainbb which could be used. Both those apps have developers constantly working on them. There is also the possibility that someone, as I write these words, is working on another app that is going to blow Steemit out of the water.
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My point is the innovation and replacement can come from anywhere yet still be part of the same ecosystem. There are 50K of us who will not move to another ecosystem without a fight. Many of those people are developers who can create interfaces if needed. This is what makes blockchain unique. People get upset at Facebook or Google, if they go to another ecosystem those companies lose that person. One leaves Hive.Blog to go to Peakd, that person is still on this blockchain (and using Hive).
There is another aspect to this which we saw yesterday. I posted this morning about a Visa card that can be purchased using STEEM.
Here is the article:
This is another asset we see being added to the ecosystem. Suddenly, people have an easier way to convert their STEEM to a currency they can use to buy things. At this moment, there are not a lot of options of where to spend STEEM. Nevertheless, it does exemplify an important aspect to currencies: people will use what they have. People will spend $HIVE if that is what they are given and as long as they are on this network, that is what they are paid in.
Over time, I expect we start to see more avenues of commerce for $HIVE developed. This is going to be another important part of the ecosystem which will add to its value. One thing Facebook did a sensational job at is, once people are in, they stay there. This is because new features are regularly added which can be used without leaving the platform. I fully expect Hive to do the same thing.
The advantage with blockchain is that, unlike Facebook or Google, nobody has to pass ideas by someone for approval. If someone wants to see something on this blockchain, he or she only has to find someone able to develop it and it is on the blockchain.
In 5 years, a $250B blockchain will not be considered large. There are going to be a number of blockchains in the trillions. There is simply going to be too much activity taking place on them for them not to have that value. We see the value of ecosystems in the market caps of Google, Facebook, and Apple. Hive has the ability to surpass them all.
Nevertheless, $HIVE at $1,000 is still 1/3 the cap of Apple and Google and 1/2 that of Facebook.
And that my friends is how powerful blockchain is.
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