They say there is a fine line between genius and crazy. When it comes to Hive, I have been riding that like Ginger Lynn in her prime..
Some people seem to take exception with my analysis of the Hive blockchain. That is okay. The challenge many people have is that they are looking at this based upon their experiences in other financial areas. Currency is a completely different animal from stock and bonds. Since few deal in that arena, most do not realize how big a world it really is. At the same time, people are accustomed to the idea of companies making money online yet they do not grasp the concept of a blockchain protocol having the value. Again, we are dealing with a different animal.
Before going any further, I have to state that I am bullish on BTC and believe that some of the forecasts people put out are possible. I can definitely see it as a $40,000 coin by the end of 2018. Please keep this in mind as I proceed through my thought process on Hive knowing that I am not coming at this as one who thinks BTC is cooked.
The other day it was announced that Hive now has its' own auction house called Steembay. I wrote a post about it which you can read if you missed it.
https://steemit.com/steembay/@taskmaster4450/next-steem-target-ebay-post-your-bids
This morning @Steembay put out an update about what took place the last couple days. I will highlight a couple points so here is the link to read the full article yourself.
https://steemit.com/auction/@steembay/update-on-steembay-and-woooow
I am very excited for one simple reason: it is commerce. While I feel the curation reward system that is in the Hive protocol is amazing and will revolutionize the content creation world, having actual commerce moves the Hive blockchain into an entire different realm.
Ebay is a $37 billion company that is really little more than an auction house. It is a very traditional model that they moved into the digital world and excelled at. Steembay is looking to take that same concept and apply it to the blockchain. According to the article, there are already 50 auctions running, which is sensational.
Now I admit I am not an Ebay person, so I had to look up some costs with them. Going to dummies.com (stop the snickering...smart people go there too) I learned the listing price for an auction from $.01 to $200 range from 10 cents to $2.00. Using some advanced mathematical skills, that equates to 1%-25% of the proceeds going to Ebay. Not a bad deal for them.
In the comments on that post, I got a reply from @steembay:
The last time, my wife used ebay, it was an item sold at 45$ with all the charges and the paypal fee she endet up with mere 30$
Sounded like a bad deal for me... this was the initial moment for this project ;-)
Bad deal for him, great deal for the Wall Street traded Ebay. Of course, we all know this is the norm. Ebay takes a piece of every auction from average individuals and became a $37 billion company. Steembay is a FREE service on the Hive blockchain. Yes you read that right. The cost to use Steembay is ZERO. It costs nothing. So if you are going to auction of a $30 item, do you think Ebay or Steembay offers a better value (yes I know the number of people bidding on Ebay at the moment gives it a leg up....but that might be temporary)? Time will tell but it is possible for Steembay to cut into the $37B market capitalization that Wall Street assigned Ebay.
So based upon this, do you think that this one app could, eventually, add a few billion dollars in marketcap to $HIVE? Even 5% of the market would equate to almost $2B which is about 9 times what Hive is at the moment.
Which brings me back to Bitcoin. The granddaddy of all cryptocurrencies has a market cap of $137B according to coinmarketcap.com. Bitcoin is revolutionary and will only get bigger. While there are challenges of scaling and the costs are rather high per transaction, they are still minimal compared to what the banking establishment charges especially internationally. It is not uncommon for an international transaction to 2nd world countries to cost as much as 30% (and we thought EBay fees were excessive). This is one of the major selling points of Bitcoin. Decentralized-low cost, open transactions anywhere in the world versus an expensive, corrupt banking cartel controlling all money transfers is the decision people are confronted with.
Moving money around is big business. Focusing upon the auction market again, we see that more than 75% of Ebay's transactions are handled by Paypal, a company they once owned. Paypal is the largest online payment system in the world. For all of Ebay's success in garnering a $37B marketcap, Paypal is worth $93B; more than 2.5 times the size of Ebay. Like Visa, Paypal has amassed a fortune handling payments, something that opened the door for Bitcoin.
Sadly, Bitcoin's challenges with scaling created debate as to which currency will end up being "money". Transaction time and cost are the two variables that are important in this realm. As of now, Bitcoin is just too slow to handle it. Even the ICO king, Ethereum, with its' $33B market cap is challenged in this way. While 25 transactions per second is better than BTC, it is hardly the answer.
Therefore, the winner in this realm will be the one who has a lightening quick network that can handle millions of transactions per minute at a minimal cost. Whatever currency can pull this off will be worth hundreds of billions of dollars. Will it be ZCash? Monero? Will Charlie Lee breakthrough and become the silver to Bitcoin's gold (never bet against Charlie Lee by the way)? Might we see Bitcoin get its act together to ultimately add this feature to its status as a holder of wealth?
Sorry, for the interruption. I just checked my wallet and I was sent .001 steem which is worth about .00092 of a cent. Can you believe someone sent me 9 1/100 of a cent? I will try not to spend that all in one area.
Wait a second....someone sent me 9 1/100 of a cent! Try to send that amount of Bitcoin. Or Litecoin. Or Ether. See what the fees do to you. I sent $10 yesterday of Bitcoin and it ended up costing me almost $12. Holy crap Batman. Do you see it? Everyone keeps talking about a fast, low cost network to handle money transactions. We can go one better.
Hive is a lightening fast, Fee-less network. You can send any amount of $HIVE without a transaction charge. @Steembay auctioned off something for $45 and received $30 after he paid all the fees to Ebay, Paypal, and whomever else took a slice of the pie. On the Hive network, using his creation, there is no fee for the auction AND NO FEE for the buyer to transfer the $HIVE. It is a zero cost transaction. Do you realize how big that is?
$92B for Paypal
$37B for Ebay
$252B for Visa
$500B for FB
$25B for Reddit
$20B for Twitter
$100B for Youtube (estimated)
Now bear in mind I am not saying this is what will happen; simply that it is possible. When you look at the marketcaps of these companies which operate in the arenas were there is an alternative on the Hive network, can you see how I laugh when someone says there is no way this could end up with a $25B marketcap? It is absurd to think that is a high valuation. Hell, even ETH with its whopping 25 transactions per second is worth $33B at the present moment. Does ETH really have anything on Steem other than publicity? Even if it does, what about Bitcoin Cash and its' $25B marketcap? Does anyone really think an 8MB block version of Bitcoin suddenly puts it in the realm of Paypal or Visa?
So tell me again how a few whales circle voting to enrich themselves is going to destroy everything. Are you f**king kidding me? Step back and see the proverbial forest through the trees. There is a lot going on with this blockchain and that is what matters in this arena. Forget the price of the $HIVE coin. The price will take off once it gets some publicity from speculators. Now please note this is different from marketing. The publicity I am referring to only comes after excitement is created by the developments on a blockchain. This is what lures investors in because they see the potential for appreciation. However, before that happens, there needs to be enough development to attract those people. We are starting to see that on this blockchain.
Please remember this post the next time someone starts complaining about Hive and that is has no chance of appreciating past a certain point. There is $5T worth of currency traded on a daily basis. $80T a year is conducted in business around the world. The banking/financial industry is worth trillions. Social media is a trillion dollar industry.
Therefore, do not tell me that $25B for Hive is absurd. It is absurd to think that is not possible.
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Picture by google images.