The Hive experience is unique in many ways and because community is the most valuable resource there is as it drives all supply and demand through consumer decisions, the customer is vital. Unlike almost every other social platform in the world, one of the most exciting things on Hive is the ability to earn through consumption, earn by supporting the content and authors you enjoy. On Hive, this is called curation.
Curation and consumer rewards
Firstly, curation is the process of selecting and organizing content and on Hive, it is the "job" of curators to do this, where the curators are all users on the platform. Because Hive is a DPoS blockchain where the staked token ("powered up") serves as a mining tool to access the new token pool, the process of consuming most forms of Hive content allows for mining rights relative to the amount of stake.
Simply put, once you have some HIVE POWER, you can earn HIVE just by consuming and curating content by voting on it.
There are many technical factors that go into curation, however in this reply, I am just going to add the basics so that you can get an understanding of how the process works in general and get started.
Voting Mana
The first thing that is good to know is that votes are unlimited and the value is based on how much HIVE POWER (staked HIVE) one has, but vote value goes down the more often an account votes. This is done via "voting mana" that reduces the impact of a vote the more voting that takes place, but it regenerates over time. Basically, an account at 100% mana could vote 10x at full power (using all stake) and the mana will drop to 80% and will recover back to full power in 24 hours.
As the mana drops, the value of each subsequent vote drops accordingly, so most people vote the equivalent of 10x a day. This could be 10x 100% votes or for example, 100x 10% or 50x 20% votes.
Voting values in brief
The Vote value is dependent on the average price of HIVE over a 3.5 day period, so that spikes or drops here or there don't have as large impact. But for example currently, HIVE is worth about 25 cents and 10,000 HIVE power is therefore worth 2,500 dollars US. A 100% vote with 10,000 HIVE POWER is worth 10 cents, therefore 10x a day, it is about a dollar a day or about 365 dollars a year if price remains equal. This however is paid in HIVE POWER and therefore will compound a little over time to make the voting value increase. At current price, 365 dollars is about 1460 HIVE, meaning that total 10,000 HIVE would increase just by voting and become more powerful. If The price of HIVE doubled to 50 cents, the value of the votes increases accordingly, but it will pay about the same amount of HIVE regardless of price.
50/50 Curation return
Having quickly covered voting values, we now have to look at the curation return on voting, which is a 50/50 split between between curator and creator. So, that 100% 10 cent vote would give each user 5 cents each. So in the space of a year, that 365 dollars and 1460 HIVE earned through curation would see half go to the voter, half to what was voted upon. This means that the 10,000 HIVE POWER would increase to around about 10,700 and therefore have more power to vote on. This compounds over time all the way, so the actual figure would be more. Compounding value adds up.
This process means that the creator can earn and potentially stake their HIVE tokens and then support the content they enjoy also. The more staked up and diverse accounts with HIVE POWER, the wider the distribution goes and the more types of content get supported. This attracts creators and audience to drive demand and should see an increase in token value. In some way, curation can be seen as a payment, a tip or an encouragement for what is consumed and the more that take part, the stronger the economy. Economies benefit from trade and on Hive, we are trading the value of the pool for the content we consume, but also getting half of that value from the pool ourselves. It is a win-win, with the creator getting paid and the curator getting paid to consume what they enjoy.
Vote stacking
The idea of Proof of Brain or wisdom of the crowd through curation is that the best and most consumed, the important and useful content will be discovered by the community and earn more than others. This means that content will attract more value based on the amount of stake that votes on it, not how many votes it attracts. This is because there is a "skin in the game" approach to curation, so while I have used 10,000 HIVE power in the example for a 10 cent vote, all things remaining equal, a 100,000 HIVE POWER vote is worth a dollar and a 1,000,000 account is worth 10 or, 100 dollars in voting value a day.
Now, this is where it starts to get much more complicated in the algorithms, but essentially, earlier voters benefit from the power of later voters. What this means is that while the total vote value is split 50/50 between the curators and creator, each curator can affect the percentage they get depending on when they vote and which order the votes come in. Earlier voters benefit from later as they "unearth" the post in some way, they recognize the value and say "hey, look at this" and if larger vote values follow, the curation percentage can by several multiples more than the 50% standard return, with the later voters getting less than the 50% - the creator always gets their 50% though.
Voting window
I don't want to make curation complicated as there are a lot of mechanics and algorithms, but one of them is gamification through a reverse auction window. Currently (this can change and has in the past), there is a 5 minute voting window that has a straight line scaling that reduces the curation return. This is designed to stop "frontrunning"large voters on popular authors and add gamification into the voting process.
To visualize this line:
If voting at 0 min = 100% penalty, 100% of the curation stays in the pool
If voting at 1 min = 80% penalty, 80% of the curation stays in the pool
If voting at 2 min = 60% penalty, 60% of the curation stays in the pool
If voting at 3 min = 40% penalty, 40% of the curation stays in the pool
If voting at 4 min = 20% penalty, 20% of the curation stays in the pool
After 5 minutes, curator gets 100% of the curation earned.
The author always gets their 50% of the vote value.
The game for curators looking to maximize is trying to judge where they will gain the most and lose the least and there are many factors that come into play here. Voting after 5 minutes gets 100% of curation earned, but if significant vote value came in at 4 minutes, it might have been better to vote at 3 minutes - as an example. It is important to note that the lost curation return stays in the pool and will mean that the pool is a little larger than if there was nothing returned. This voting earlier in the window is often called "burning curation returns".
The other thing to note is that each post or comment is only open for voting to earn on for 7 days, at which point it will close and the earnings for creator and curators will be paid from the pool into the accounts.
The best way to vote?
There is not really a clear answer for this as it depends on the purpose of the user. A maximizer might look for the way to increase their holdings only and might vote on terrible content that adds no value to the community to try to do so. However, perhaps having token value worth more by building a valuable community is a better result than having more tokens that are worth less.
Because of the difference in what people think will add value, I can only give an opinion here and say that in my experience, it is more rewarding to vote on content I enjoy even if it doesn't get me as much in curation return - I personally have quite a lot of stake in HIVE POWER so the "cost" in earning HIVE might be significant, but the value I see in supporting content and creators who are deserving and value adding is far greater than the curation value I will earn. However, I also recommend taking a hybrid approach and spending some percentage of vote value trying to maximize effects as it is a great way to learn how the system works as well as broadening the experience and exposure to accounts.
In my (quite good) experience, actions toward improving the strength of the community are personally far more valuable than trying to maximize my own earnings through attempting to game the system in some way. Investors who support the growth of the community through how they consume have the potential to not only increase their holdings significantly, they will also add to the token value of their holdings significantly. Supporting the community means everyone in the community can benefit.
For the creators
I will finish this with a paragraph for creators on Hive. Because people think about the curation returns and their vote values, posting more doesn't mean you will attract more votes or earnings and if anything, it will turn many people away, especially if it seems like SPAM. There is very little limitation on how much one can post, but the content that attracts the majority of votes is generally better quality or from those who try to add value to the community through development or building their network. The network is very important to earnings on Hive and because it is stake-weighted voting, it is about the stake attracted, not the number of followers.
In general, those who are highly staked are looking to add value to their holdings, not earn each day on curation - so they are more likely to vote on content or people they consider value-adding. This means that in order to attract consistent attention through votes, one generally has to add value consistently - and this takes time to build, it isn't a get rich quick scenario at all.
Complexity of the voting system, simplified
This is a general overview for those who are new or yet to join Hive and there are many details missing. However, the voting system is quite complex and can change over time with development. The first thing one should consider when joining Hive isn't what kinds of curation returns one can get but instead understand - it is possible to earn on consumption. Consumer rewards are the way of the future of digital content and learning and investing into the processes early will possibly be highly valuable.
A handy way for me to see consumer rewards by having HIVE POWER is like having a subscription to a pool of value that I can use to add tips to the content I enjoy - forever. Based on my holdings, I can tip all kinds of content and add value to all kinds of creators as well as increase my own holdings at the same time. For me, the entire process, whether I am creating or curating is highly enjoyable and while imperfect in many ways, is far better than any other social platform or online experience, because we are rewarded for investing into each other.
The most important thing to know about curation on Hive is that, you can earn on consuming what you enjoy and by doing so, you can add value to the creators you love in very real ways, as well as the entire community. And of course, have a massive amount of fun and meet some great people in the process.
Taraz
[ Gen1: Hive ]