Delegation Explained

Passive Investment

Delegation is a passive investment vehicle, which I believe is a unique way to earn Hive without creating or manually curating content on the Hive blockchain. While the two most commonly known and understood ways to make Hive Tokens are to be awarded author rewards for content creation and curation awards for manual or programmed upvoting, there is a third way of earning Hive called Delegation. When you earn Hive through delegation, you don’t create content and you don’t upvote content. Instead, you first “Power-Up” or transform Hive into “HivePower” the real unit of influence or value awardment on the Hive platform. Then you loan HivePower to other people or businesses on the Hive blockchain, through a loan process called delegation. The people or businesses you delegate your HivePower to, use your HivePower primarily to award content and earn curation awards, which they then share with you. Thus you can earn Steem here without being an active or reader/curator.

Delegation explained

To understand why delegation is possible you need to understand that unlike many other cryptocurrency blockchains which have one coin, the Hive blockchain has three, which are called Hive, Hive Power and HBD. Influence on the Hive platform otherwise know as the amount of Hive award your upvote bestows, depends on how much Hive Power you process either through purchase, lease (delegation)or loan (delegation). Those who own HivePower can delegate or loan hive Power to others, who use it primarily to generate curation awards and share those awards with the owners of the HivePower. Thus curation can be an active process of consuming and upvoting, an automated process using upvote bots like Hiveauto or a delegated process. People who own HivePower loan it out through a special loan process called delegation.

The Safety of Delegation

I have loaned people money before and it is always risky because once you give someone your money. There is a risk of the business failing and you lose all your money. There is the risk that the business succeeds and you don’t get your proper share. There is always a sense of vulnerability when your money leaves your possession. The wonderful thing about this invention, called delegation, is that you when you delegate Hive Power you still control it. So you can take it back anytime you want by Un-Delegating it. You don’t have to ask permission to take it back and you don’t have to wait for someone to give it back to you. You just Un-delegate it and take it back.

Examples of Delegation

Many people delegate their Hive Power to manual curation projects to support, manual curators who reward good content with upvotes made valuable by delegated Hive Power.

Delegation FAQ

You can only delegate Hive Power you own.
You can’t delegate Hive Power you leased or Hive Power delegated to you for free. Once you undelegate Hive Power the project or business you delegated it to loses that Hive Power immediately and can no longer use it. However you won’t be able to use it for 4 days.

This passive investment vehicle, which you control is rare in cryptocurrency and you should take advantage of it during any periods of inactivity to keep your investment working for you. As Warren Buffet, the Billionaire Investor said, if you can't figure out how to make your money work while your sleeping, you will probably work until the day you die.

✍️written by Shortsegments.

Shortsegments is a blogger or writer on social media application or platforms, some of which are running on blockchains. A decentralized application or a decentralized platform, means there isn’t a central authority or owner to take your account away from you and your account can’t be deleted. You are the owner of your account and these platforms are censorship resistant. In contrast, centralized platforms have a central authority or owner who can freeze your account, hide your content and delete your account and all your content. Examples of centralized platforms include Facebook, Instagram or YouTube.

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