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RE: Announcing the Launch of Hive Blockchain
To all who shout "Horray!": you guys realize that the value of the currency unit halves if the total number is doubled? Which is effectivly the case (minus the exempt wallets). Monetary value cannot be "hardforked" in the real world. Despite the Fed saying it can be, and also doing airdrops.
But who gives a fuck in times like this...
The value of a currency is not determined by the supply...it is determined by the supply and the demand for it.
Think about it this way, if suddenly a new country is born out of thin air and issues it's own currency does that mean that the US dollar will go down in value because of it?
Of course the US dollar would lose value - if the new country consists of half of the former USA.
And demand doesn't double if the supply is doubled. There are over 5000 cryptos out now, so everybody who wants to invest has more than enough to choose from.
This is correct if we make the assumption of a zero-sum game. The point is that the demand is not determined by the supply (and viceversa). The issuance of new tokens on a blockchain is determined programatically and has no correlation with the price. The demand is determined by the expectation of potential buyers.
Of course part of the expectation of future value has some correlation with the supply but once both products start to diverge in development that correlation goes down.
In the short term the value will be split but in the long term we will see that each coin will capture different market segments (or not). Since the crypto market as a whole is tiny compared to the "real" economy we can't assume a fixed demand (in the long term) and therefore it is not a zero sum game.
Well, what happens in the long term is impossible to say. But for the moment the crypto market is a zero sum game, the total market cap has not been growing for some time now. Only the number of coins who share this market cap has, and that is not helping at all.
But anyway, I don't really care if a Steem, or a Hive, is worth 7 Cent or 15 Cent. I have been wondering for a while now if this reward system is a good idea for a social community. So far, it causes more trouble than being benefitial.
There are more factors at play than just math. Trust is one: The value will be where people think it is. As an example, if Germany announced to leave the Euro and start over with a new Deutschmark on Friday, the bottom would likely fall out of the Euro and the new Deutschmark would go through the roof (if the German gov't would fairly exchange every last cent w/o screwing people over).
In that respect, value can be "hardforked" or "printed", if only enough people go along with the concept. It is the basis of every modern fiat currency. The disconnect between real value and currency is clouded over by the massive real value people see all around them (in developed nations) and the values they can buy every day.
This fork might well be a great new start. One can hope.
Cheers, Folker
I hate Rothschild. So, what you say is accurate inside a vacuum. So, in other words, yes, when Hive forks from Steem on Friday, assuming that happens, then the value of the two cryptocurrencies may lose half of their value like you said. But that does not mean Hive cannot quickly recover after that. Hive can have potential that can weather this storm in the long run. You spend money to make money. Losing value during this fork is the cost, perhaps. This fork may not be the same as what Rothschild and others did.
It is not doubled. Hive will be completely different currency in a different blockchain from Steem.
Edit: To clarify, it will have its own value.
Ok, I give up.