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It only gets harder to earn proof of brain tokens as the value goes up

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@fredrikaa
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As sure as spring has followed winter, more activity and users on Hive and its various tribes has followed an increase in price. Hardly a surprise, as larger $ signs on each article sure makes it more tempting to sit down, have a cup of tea, and get that new blog post written. At these prices, it is also increasingly tempting to sell anything you earn.

However, you may want to consider first that getting more of these tokens later will likely be increasingly difficult.


The price of $LEO, $POB and $HIVE are all up, but that only makes it harder to get more of them.


Both HIVE and POB have a lowering inflation rate. For HIVE, the current inflation is about 7.5% (down from 9.5% when I first joined) and it will continue to go down until it is just below 1% eventually. For POB, it follows the same deflation model as Bitcoin, with a capped supply of 21 million tokens (which won’t actually be reached because of burns) with a similar halving event every 4 years. In other words, the amount of new tokens issued on a yearly basis is currently decreasing. Thus, there are less tokens being distributed through the rewards pool, and it will be harder and harder to obtain stake through posting content.

To me, this makes perfect sense. I’ve never viewed the inflation-derived reward allocation through stake-based voting as a long term solution for content monetization. Rather, I see it as a method to enable the users of a platform to become co-owners and thus have an aligned incentive with the growth of a platform through participation. And where early adopters have that additional incentive to use a platform while it is still somewhat premature and can benefit from helping it grow. Thus I don’t see any problem in the fact that HIVE will sooner or later not be able to sufficiently reward a large userbase through the reward pool, but instead have to use the many benefits of its native currency to provide similar platform economic solutions as other web 2.0 platforms except with the added benefits blockchains provide (self-custody of accounts, p2p fee-less txs, transparency, potential for trustless smart contracts, etc).

What I am getting to with all of this is the fact that it may never get easier than it is today for users to acquire stake. Both because of the reduced inflation, but also because of potential higher competition. As prices goes up and more users flock to Hive or to a tribe to share their content, existing stakeholders will have more to choose from when curating. This will result in many receiving less upvotes whether in the form of lower percentages from active curators who then also choose to support more users, or from people no longer upvoting them as there are now better content made by others.

It may be a bit of a paradox that writing content when prices are high can end up being less rewarding than writing when prices are low. I think it is similar to how people seem to only want to buy a crypto or a stock after they have seen it go up a lot in value, as they want proof first that indeed it will go high in price. Similarly, people who wait to post good content and engage frequently on Hive or in tribes such as proof of brain or leofinance will find themselves obtaining less stake than those who were persistent also during the bear market or early stages of a new tribe. You may want to keep that in mind not only during the next cycle, but also today if you believe the price of these tokens will eventually increase. If the current price increases do indeed attract new people who then also want to compete for the same rewards, you may not be able to get your stake back as easily as you obtained it.

So don't get distracted by the moving prices, and put your money and your brain where you believe there is real value long term :)

Fredrik


Posted via [proofofbrain.io](https://www.proofofbrain.io/@fredrikaa/it-only-gets-harder-to-earn-proof-of-brain-tokens-as-the-value-goes-up)