We had some friends over for dinner tonight and I decided to take a bit of a different approach when explaining the future of income with some of them. During dinner, we were talking a little about the world, changing employment environment (we are all colleagues too) and I mentioned how the future of income generation is going to to come through multiple sources and some will be passive, something that seems hard for career oriented people to grasp. So, I decided to frame the investment side of it a little differently - in a more clear way for them to visualize.
The company I work for has been transitioning from a perpetual license model (by once and use indefinitely) to a SaaS model, Software as a subscription, meaning to continue usage requires paying a subscription, like streaming services. This transition takes several years and is very costly, and it has ramifications. For example, while it seems great to always have people needing to pay to use, it also means that churn of client becomes an issue, so user retention is necessary. This means there is more accountability and focus on development for retention leads to a better product overall, or risk losing out to competition.
While there ae many things in here that are relevant to crypto investing and especially Hive, I decided to reframe yield from passive income as ARR, Annual Recurring Revenue. It isn't quite the same, but for people who have been living and breathing the term for a few years now, it was far simpler to for example, explain an investment into Splinterlands.
For most so far who have any understanding of NFTs, all they see is the "buy and sell" of them. Buy low, sell higher - enjoy gainz. But, this process is changing rapidly as people look to develop yield. In relation to ARR, for Splinterlands cards to have investment value, there has to be ways to earn on them. There are several paths for this with one being playing, but another main one is, renting for a yearly return. This isn't an annual subscription (it could be), but it is many people "subscribing to use" for short periods of time, with the blockchain keeping track of all of the contracts and processing automatically yearly, daily, hourly or every three seconds as needed.
As said, this isn't a one-to-one metaphor, but it sufficed for those listening to be able to visualize what is going on and when I sat them down and showed Splinterlands, the rental markets of Peakmonsters and various other services out there, they were better able to overlay their understanding with what they saw and start to get a handle on why it is valuable.
But, what really did their head in was that while the game has generated hundreds of millions in value, the founders of the game and the investors aren't necessarily the owners. In fact, if they want to "get high off their own supply", they have to buy like everyone else. But as I mentioned, this sets up a far healthier incentive for them as owners to bring value to the game and the distributed owners of the game assets. For the value of their holdings to be valuable, just like a SaaS model, they have to make sure that people don't churn at a greater rate than they bring value to the table.
In Splinterlands for example, this is quite a challenge, as there are so many moving parts in the economy of it, but there are also a lot of very bullish investors willing to support, which are like very large companies who are loyal to the product and paying the subscription fees. This means that development has to take place, but it is increasingly looking toward user adoption and retention as the mechanism to drive value, not sales of products and services to enrich only the founders.
This means that there is a wide range of value/ wealth generation processes that keep people committed, reducing the likelihood of a mass exodus. It is likely because of this that throughout the bear market, Splinterlands stayed largely flat, but as soon as there was a .niff of the 2021 bull around the corner, it shot up in value and will likely remain going up down the other side of the bear, as it becomes a holding pen of wealth for the future. NFTs are interesting for this, especially ones that don't need to be sold in order to generate some income, as depending on what is held, there is the potential to sell into a niche demand market. One Bitcoin is only going to be able to be sold at or below market value, but one NFT is not like another NFT, so each has its own market mechanics in play. Scarce is scarce and just like a mansion, not everyone might be able to afford to buy, but there are buyers out there.
What I am trying to get across to at least the people I know who hold some crypto is, buy and sell is 2017, the future of income in even the near-term is going to be yield, multiple streams of passive value, Rates of Return that are based on usage of assets, not just holding assets. This is also why the projects that are looking to survive in this industry are going to have to start adding real usecase to their product ranges, not just yield to earn some other token, as *anyone can do that. There has to be market differentiation and competitive advantage and as we know, competing on price (or artificially increasing yields) is a race to the bottom.
What I like about the HIVE token on Hive is that it has many potentials to use, even if only trading backwards and forwards for other secondary tokens to increase holdings. But overall, there are many ways to use it and feel the power that ownership delivers. A lot of that power comes in being able to empower others to take part in participating in the industry too, not just to enrich ourselves as individuals. This is an imperfect science, which gives it a lot of dynamic and attractive qualities for people like me, largely analogue and manual, trying to use what I have to improve my experience.
And this is the future if income.
People will be earning on their career a main salary, but on the side, they will be earning on what they love to do, doing what what they love to do, building with the people they love. For some it will be 5% more, others 50%, and others still will be living off it completely, outperforming any salary they can get paid as an employee. But, the goal is to create a world were we can generate value doing what we are good at and, we are retained because we love what we do.
Very few workplaces are able to offer this.
But they can offer some relative security of income, so they aren't useless yet.
[ Gen1: Hive ]
Note: Orchids are sexy.
I took these pictures tonight.
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