It is funny to watch someone, even as smart as Raoul Pal, try to shoehorn an argument about something. There are few advocates as dedicated to the new system that is being created as Pal. At the same time, he is a huge believer in Bitcoin, something that carries much of his focus.
Source
Here is the headline from Dailyhodl.com.
Pal is making the comparison of Web 2.0 to Web 3.0. In the article, he discusses how companies like Facebook, Twitter, and Google benefit from the network effects.
“Bitcoin is the perfect behavioral network because it rewards you in money. The more people you bring into the network, the more your money goes up. That by definition will create tribalism because everybody’s now incentivized for their network to go up more than the other network and for all other networks to fail.
It is an incredibly powerful tool for building a network where you have money attached to it. So imagine if every Facebook like was a dollar, imagine what that would do. Or everybody you brought onto Facebook paid you in Facebook shares. That’s what Bitcoin is. It’s incredibly powerful and that’s why it creates narratives because like a religion, it’s all about getting more and more people into it.”
He then goes on to say this:
“Once you’ve unleashed the genie out of the bottle of behavioral economics and big data, everybody figures out how to use it for different means, and it splinters everybody into different groups and it’s almost impossible to deal with because it’s a network. It’s not centrally pushed. Facebook is not centrally pushed, yes there’s an algorithm and stuff like that but its a network that everybody’s incentivized to get more people into their network because it makes them feel good by getting the dopamine hit with the likes, its crazy and that’s where we are, and Bitcoin is like the most perfect echelon of this of anything I’ve ever seen. And most people don’t really understand that.”
Pal's argument with Bitcoin is not incorrect. However, his stretch to Facebook and Twitter isn't a direct correlation. It is true that, in terms of value, the more people you bring to Bitcoin, the more your holding of Bitcoin is. That said, Bitcoin does NOT reward users in money. A new person who acquires some Bitcoin, who uses the network to simply transfer money, is not rewarded with Bitcoin. This person has nothing unless he or she buys more Bitcoin.
The reality is that Pal was describing Hive perfectly. On Hive, when people conduct an action, they get rewarded with money. Whether it is the layer 1 token (HIVE) or a layer 2 token, the result is the same.
When comparing to the Web 2.0 applications like Facebook or Twitter, we see an ideal comparison. Upvotes on those networks might give the dopamine rush yet it truly carries no monetary value. Each activity is going to make Zuckerberg and Facebook shareholders more money. The individual is left with only the chemical rush.
Hive is a completely different story. Each vote does have value and any activity rewarded will result in some kind of payout. This is a complete transformation in concept.
Essentially, without many people realizing it, the Hive platform is starting to lay the foundation to completely transform the world of social media. In fact, a case could be made for the microblogging application that Leofinance is about to unveil carrying enormous power simply because of what Pal says. It is modeled after Twitter, provided the same capabilities (likely on a scaled down version to start). This means that Pal's comparison is a perfect fit.
The tribalism he discussions is something that we cannot overlook. Naturally, we see that with the maximalism that already exists in cryptocurrency. There are those who believe their chain (coin) are the best and everything else is just trash. This is not entirely accurate either but it does denote how people think. As noted, this is behavioral economics at its finest.
Once people start to arrive at an application built on Hive, they will not leave if it is extremely successful for them. We are seeing how the value proposition can truly explode. Let us take Pal's first statement and adjust it.
“Hive is the perfect behavioral network because it rewards you in money. The more people AND ACTIVITY you bring into the network, the more your money goes up. That by definition will create tribalism because everybody’s now incentivized for their network to go up more than the other network and for all other networks to fail.
The difference is the more that someone uses the applications on Hive, the more money they will have. Those who figured out this secret understand what it means to be dedicated and consistent. When people place well constructed comments, they get upvotes. This is in addition to what their blog posts yield.
At the same time, curation, for some, can be a full time job. If they amassed enough stake, they can earn a fine return simply by pushing the upvote button. Of course, this applies to most everyone, it just depends upon how much of a particular token one has.
It is amazing to consider the foundation that is being laid on Hive. We are seeing the applications starting to appear that will bring a lot more to the table. At the same time, some of the industries greatest thinkers are starting to frame the Web 3.0 conversation for us. In doing so, they are making the case for Hive and all its applications without even realizing it.
They are talking about us without even realizing it. Now it is up to us to simply redirect the message they put out in the proper direction.
If you found this article informative, please give an upvote and rehive.
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