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How Does Hive Blockchain Make Money?

 

By Nerly Shammah Jul 19, 2023

 

Hive blockchain makes money from inflation rewards via block validation. This process is typically called mining and varies across different blockchains. In this article, you'll learn how this money is distributed and how you could earn(more) even without being a miner.

 

 

Hive blockchain is a cryptocurrency blockchain that is governed by a delegated proof of stake(DPoS) consensus mechanism where stakeholders or as called within the cryptocurrency ecosystem "token holders" can vote in what are called "witnesses" the equivalent to "validators" on blockchains like Ethereum and "miners" for blockchains like Bitcoin, to secure the chain.

 

Witnesses are responsible for the security of the chain as they are obliged to run validator nodes that continually create blocks and verify transactions posted to the chain. On the Hive blockchain, transactions are typically "irreversibly" verified in a max of 3 secs. 

 

The Hive blockchain is a powerful DPoS chain built for Web3, notably the blockchain that is home to the best Twitter alternative and one of the most popular blockchain games - Splinterlands. 

 

Understanding How Hive Blockchain Makes Money 

 

Firstly, hive blockchain isn't a company, the company that some may know of with a similar name has recently rebranded to Hive Digital Technologies - a crypto mining company that has no ties with the OG "Hive Blockchain".

 

Hive blockchain is a decentralized blockchain network, no one company owns it, it has no CEO whatsoever, and it is governed by the community, some say it is the only decentralized blockchain after Bitcoin, is that true? You'd have to check it out yourself to verify. 

 

Knowing all this, we can easily understand how it makes money which is that its value is distributed to "individual participants" of the network who we identify as "Hivians" so when "Hive Blockchain" is mentioned as if it were a company, what should really be said is "Hivians" as they are what makes up the blockchain, the coming together of "Hive and Blockchain" is simply a hostname. 

 

That said, Hivians or Hive blockchain primarily makes money via network inflation, similar to Bitcoin block rewards, when witnesses add new blocks to the chain, they earn from the Hive inflation. 

 

However, unlike Bitcoin, witnesses don't get everything and here's where the Web3 side of Hive comes in! 

 

How Does Hive Blockchain Make Money? 

 

Hive blockchain makes money via inflation which is created on the blockchain level and distributed to witnesses, DHF, content creators and curators.

 

The Web3 side of the Hive blockchain is called "Hive Blog", Hive is generally called the "Text Chain" because it is designed to store an impressive amount of text, making it a suitable network for building decentralized social networks. 

 

Hive Blog is an example of that decentralized social network, Leofinance is another example of such, it is built on Hive blockchain and combines microblogging like Twitter and long-form blogging like medium in one interface, and you want to hear the craziest part? 

 

Every content on leofinance is visible on Hive Blog because they are all built on the same blockchain - the difference of course is that Hive Blog isn't designed in the same way as leofinance, so the way content is rendered beautifully for maximum user experience may not be same on Hive blog. 

 

It is important to note that the Hive blockchain is home to so many social network dApps, one simply has to explore and choose which is desired. 

 

Inflation rewards are shared as listed below:

 

Content creators and curators - 65%

 

Stakeholders - 15%

 

Witnesses - 10%

 

The Decentralized Hive Fund(DHF) - 10%

 

The Decentralized Hive Fund is a DAO of the Hive blockchain where token holders vote on proposals to be funded using the value contained in the account. 

 

The DHF enables the community to push developments of products and services that will benefit the network into functionality.

 

Hive Blockchain's primary source of income is inflation, with more projects being deployed on the chain, causing demand for the Hive token to increase, the inflations printed begin to create minimal impact on the price of Hive given that the value that flows in offsets those that flow out, so in essence, it becomes deflationary. 

 

The last recorded inflation reward at the time of writing is 891,241 Hive and that is valued at about $323,520 according to data from hiveblocks. 

 

If you're a writer then there you have it, you can earn more than witnesses by writing because 65% of the inflation is allocated to content creators and curators(these are people that vote on posts), see this comprehensive guide to hive blog to learn more.