# Finance and Economy of Hive

I have written many posts about the reward systems at hive blockchain. When I did and do this, I typically look at it from the social network aspects and not from the nitty-gritty of the proof-or-stake blockchain that hive is. The blog element of this blockchain is something I am very passionate about and use it almost daily. Personally I use hive blog as a journal. I write whatever that is in my mind that day, and I get to look back to it whenever I want. I have been doing this from 2018 and now I have seven years worth of stuff. I do not write regularly and my topic changes. I used to write a lot of financial stuff and travel related posts, but lately I write a lot of quantitative posts (charts and plots) both on hive and splinterlands. I enjoy looking at how much my writing have evolved with time. 

That brings be to the topic of hive's reward system. I like to discuss this in the next section.

# Understanding the Hive Reward System

Although I have written about it from time to time, it still requires reenforcing from time to time. I am surprised how much community has embraced the [KE Ratio](https://peakd.com/hive-180505/@azircon/ke-ratio-a-personal-perspective). Even now, after many months after its inception, people write posts in favor or against the KE Ratio. One user suggested jokingly, do I get any royalty from KE? I don't :)

![Upvotes at Hive Are Not Entitlements_ - visual selection.png](https://files.peakd.com/file/peakd-hive/azircon/23u5bKfk1TMaLhu3U2cqPR361hFmC8ajWk9ndSvmX97CH6N8iMDxfBxt2WUP2egwuXWFv.png)





I used Napkin to generate these infographics, hopefully it summarizes my thought process better. I personally feel when you publish a post, getting an upvote or not is not entitlement. A lot of hive vote are automatic, so just because you got 600 votes, doesn't mean 600 people read your post and upvoted! Get over it. It is highly likely if you have gotten 5 comments perhaps 1 person actually read the post :) The other 4 are just commenting to _show engagement_. 

- **Subjective Value, Not Automatic Entitlement:** A upvote represents that a user derives value from a content. This value is purely subjective and relies on the judgment, taste, and particular community context of the individual. It's not an entitlement or automatic reward just for producing content. Also just because you published a post, doesn't mean you deserve an upvote. 


- **Proof of Brain, Not Success Guaranteed:** The "Proof of Brain" principle suggests that high-quality content, as vetted by the community, ought to be rewarded. It doesn't, however, promise that all content, irrespective of quality or applicability, will be rewarded. It takes effort, quality, and engagement that connects with people to get upvotes. This is a critical post and people often don't get it. Just because you have put a lot of effort putting together your 1000 word post, doesn't mean you will get $50. In reverse, a 300 word template post can fetch $50. It depends. I am not saying good or bad, just saying what happens.

- **Community-Determined Distribution, Not Central Allocation:** Rewards are allocated according to the weighted sum of upvotes from Hive Power users. There is no central body that decides who receives rewards or how much. If the community does not find value, there is no intrinsic "entitlement" to rewards. So the vote that you get are stake weighted, and generally you have very little control over it.

- **Dynamic and Competitive Environment:** The reward pool is limited and given out on a dynamic basis. People are continually producing content, and upvotes represent a type of resource allocation in this competitive system. To get substantial rewards, one has to stand out and repeatedly provide content that the community values. The other part is networking. People who votes manually typically likes to vote people that they know, so it is your best interest to know more people, just like in real world.

- **Influence, Not Requirement:** Hive Power users have an influence on reward distribution but are not compelled to upvote specific content. Their voting patterns mirror their personal evaluation of quality and aspiration to see specific kinds of content thrive. Do you like to have more influence on the chain? Increase your HP. Stake in king here. 

# Understanding Hive's Downvote System

Nothing get more drama than hive's downvote system. People always asks for explanation: "why my post is downvoted?": they never ask for "why my post is upvoted?" though! :) Downvotes are always taken personally as if people are taking away your money. The issue comes from the entitlement of the previous section. It is hard for people to understand that no one is taking _your_ money. The money you are talking about is not yours in the first place, it belongs to the common reward pool until day seven at payout. Just like you have no control over who upvotes you, you have no control over who downvotes you either.


![Upvotes at Hive Are Not Entitlements_ - visual selection (1).png](https://files.peakd.com/file/peakd-hive/azircon/23u5tDAiqTpnS72jfen1mrAzuR5xqGVhDwsXesdZogmnTpbJZX7d5Bk1n5vRuveqgrGUc.png)


- **Quality Control and Resource Allocation, Not Content Removal**: A downvote, also referred to as a "flag," is first and foremost a mechanism for quality control and proper allocation of the limited reward pool. Its main impact is reducing or entirely negating the potential rewards of a post or comment. It does not result in the removal of the content from the blockchain or hinder its availability for viewing. The most common thing that I have heard related to downvote that it is censorship; and nothing can be further from truth. Hive blockchain is immutable, anything you write here can't be removed and is supposed to stay here forever. That is the opposite of censorship.



- **Expression of Disagreement:** Downvoting is a means for users to express dissent or disapproval, or to signal that the content is considered spam, plagiarism, poor or no-value, misleading, or in some other way detrimental to the community. It is a form of decentralized moderation and feedback, which allows the community to self-regulate.



- **Decentralized Moderation, Not Central Authority's Choice:** Unlike conventional platforms where a central authority can remove content or ban users, downvotes on Hive are decentralized and distributed. There is no single entity that can "censor" content from the blockchain. In fact, censoring is impossible at hive.



- **Protection from Abuse and Spam, Not Opinion Suppression:** Downvotes are essential to safeguard the integrity of the reward pool and the health of the ecosystem as a whole. In their absence, the system would be exploited by malicious users posting low-quality, plagiarized, or spam content to illegitimately accrue rewards. They prevent the rewarding pool from being diluted for authentic creators. 

- **Transparency and Accountability:** The entire upvotes and downvotes are logged on the public blockchain, so the process is transparent. Individuals are also responsible for their voting behavior since their Hive Power is utilized in the process. Transparency prevents random or malicious downvoting since such activity would be exposed to the community.

Downvotes are rarely used in hive, especially when considering the total percentage of all votes. Typically total amount of downvotes at hive are less than 0.05% of all votes. Yet, you always here there is downvote abuse, but you never hear upvote abuse! :)

For the record, the issuer of downvotes doesn't get any financial benefit, however, the issuer of upvote does, he/she/it gets 50% of the rewards as curation reward (obviously at a stake weighted percentage of their vote).


https://media.giphy.com/media/v1.Y2lkPTc5MGI3NjExaDBldXhqODk4emZrcnNsMWFkZWhwbnc0OHI3OGxjcTdrdnJsc2hzeSZlcD12MV9pbnRlcm5hbF9naWZfYnlfaWQmY3Q9Zw/35pTQFiy14OeA/giphy.gif


https://files.peakd.com/file/peakd-hive/zord189/Zcxlm2md-azircon.gif