Do you think HIVE could be worth $13 billion? Does that seem absurd to you?
Unfortunately, it would see that many find themselves in this camp. However, if we ignore the knee jerk reaction of that being impossible, we can start to consider the potential. If we start with a ground up approach to our analysis, we can see how this could be feasible.
In this article we will look at some correlations in an effort to understand how things could evolve.
What Is Hive?
This is a question many ask. At its core, it breaks down like this:
Hive is a public, decentralized, immutable text database.
Each of these is an important component to the overall. Hive is a database that is available to anyone. Nobody is in control of it and what is written cannot be removed. Even though it is a blockchain, it contains more than financial transaction, allowing for the capture of any form of text.
Hence, if we want a $13 billion market capitalization, we simply need a database worth that. Of course, there is more to this puzzle than simply data storage. Nevertheless, this is the starting point.
Network-State
Over the past few years, we discussed the topic of the network-state. This is an important analogy since this is how things are likely to unfold as networks become abundant. Since they are now monetized, we are dealing with economies. No longer are networks simply companies. This is why the public aspect to Hive is crucial. Anyone is free to participate and enjoy the financial benefits.
When dealing with an economy, we get a different viewpoint as compared to looking at companies. Here we are concerned with total economic output. This traditionally has been denoted by gross domestic product (GDP) figures. In spite of its limitations, if we look at the rankings, there are 146 nations with a GDP higher than what Hive's market cap would be.
Hive simply has to equal the economic output of the Bahamas.
Naturally, there is no way to directly capture the economic value of a nation. The growth is not applied to each citizen, at least in a tangible form. That is not true with network-states. Due to tokenization, we have a base layer coin that captures this value. Hence, the greater the economic output, the more each person holding the coin will have.
Hive is the epitome of a network-state. While many consider themselves to be users, the reality is it is more akin to a population. People within the ecosystem could view themselves as citizens.
That means building out services the population requires to fill its needs.
Economic Growth
We live in a technological era. This means things are put on steroids.
Over the last 20 years, the biggest growth stories are companies related to technology. If we look at the largest in the world, names like Amazon, Microsoft, Apple, and Google all appear. This is not a mistake.
Right now, 7 of the top 10 companies by market cap are technology. This could be 8 if TSMC passes Berkshire, a difference of only $8 billion.
The world of bits is much faster than that of atoms. It is also exponential. So when we see the development of digital platforms, the opportunities are leveraged for much greater gain. This is why we see enormous valuations on these entities.
Network-states, by their nature, are technological. This means they are going to follow the same curves that exist for technology companies. Here is where is simply becomes a matter of size. The benefit is smaller entities can achieve growth rates that are difficult for larger entities. The numbers favor the later but, as a percentage, they fall behind.
Here is where the newer networks like Hive have an advantage. Every metric can be increased significantly since they are so low. This is the starting point of the journey. Is a 10x increase with small numbers unachievable? Not at all. Can Apple 10x their revenues in a year? That would be impossible.
Again, for reference, if we look at Hive as a company, there are 233 entities with market capitalizations higher than HIVE would be with a 100x. This would make it comparable to Splunk.
Of course, this will all change in the next 10 years. Technology is going to keep pushing the economic output levels much higher.
Here is the overall impact of that as shown on this from Ourworldindata.
As we can see, the chart went hyperbolic. This is what technology does. Considering a large percentage of global wealth was created in the last 25 years, this is going to compress since technology is accelerating.
What Will It Take?
The challenge with exercises like this is that people want to believe there is a magic wand that can be waved and we will get to the levels discussed. We are not going to see a $13 billion market cap without a lot of work.
Is it possible? Absolutely.
To achieve this end, builders have to step up. We need to fill the database with information that others can use to build their applications and games. On top of that, we need services that people utilize. Again, thinking of this as a new nation being formed, the business sector has to step in and provide the population with what is requires.
Achieving this end still have Hive as a small entity, especially in light of the pace of change that is occurring. The benefit here is we have so many different avenues that feed into the value.
If people truly grasp the merging of social media and finance, we see how this can evolve. It is crucial to remember that, when it comes to complex systems, the network always wins. Hence, if we take a network science approach, we can see the adaptability of the ecosystem in play. This is how complex organisms evolve in spite of difficult circumstances.
The challenge is most do not focus upon this layer. Instead, their attention, in whatever field, is on the specific species.
Of course, if the network has nothing of value to offer, it will eventually die off too. Here is where the choice of each "citizen" enters. Are people willing to build the network to enhance the value? Those that do realize the exponential nature of the technical world.
In Conclusion
A market cap of $13 billion can be in the cards. For this to happen, a major shift in the mindset of the community is needed. We have to take a ground up approach as opposed to trying to shortcut things.
Unfortunately, with the focus on users, most of the other stuff gets overlooked. Hive doesn't even offer the most basic of information, let alone an ecosystem of services.
Going back to the geographic analogy, [What if Hive was a town, yet there were no services offered in this town. Do you think people would remain without buildings, food, utilities, or places to shop? Even if you kept drawing people to the town, they would leave.
As always, the networks that build are going to win.
Will it be Hive?