Spotlight On HBD: There is Hidden RISK Involved in “Chasing Big Numbers!”

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4 min read

In the course of the past couple of months, there has been a lot of talk and discussion about the growth of Hive's own ”Hive Backed Dollar” (HBD) and its potential/promise as a stablecoin for the greater world.

To WHAT do we open the door?

I can see why this all is exciting, because it's always exciting to ”chase the big numbers,” and earn a hefty return on your investment.

Maybe I'm being "unpatriotic" here, but it already makes me slightly nervous that the HBD interest rate was raised from 12% to 20%... but WHY?

Chasing the big numbers can be a very dangerous proposition that often leads to ruin, rather than riches.

Just to clarify, in this case I am thinking of the term ”chasing big numbers” as what happens when a company, or an organization, or an individual grows impatient with the often laborious process of organic growth and declares ”we have to do something!” And typically that "something" takes the shape of something big and flashy... that people also tend to conveniently overlook the long term cost of.

It's easy for us to get stuck in our little microcosm of the world of Hivelandia, or even the microcosm known as cryptocurrency, but the history of business is literally littered with the wrecks of organizations that lost sight of their core idea and went off in search of "big numbers…" usually because somebody else in their industry was suddenly going off on a wild tear.

The great Peter Lynch — founder and steward of Fidelity Investments’ highly successful ”Magellan” mutual fund for many years — was fond of using the term ”di-WORSE-ification” instead of diversification to characterize what tends to happen when an organization loses sight of their core mission because they decide ”more growth is needed — NOW!”

So why is this really a problem?

Well, if what you are offering is fundamentally really good, resorting to competing with the "bargain basement fire sale merchants" — on their terms and turf — in order to draw a crowd can be disastrous!


Because they are just looking to make "a quick buck now" and move on... not to build a solid foundation for the long term.

With Hive, presumably what we're all looking for — in an ultimate sort of sense — is to become large and successful. But the problem with trying to become large and successful too quickly is that it tends to attract a lot of what you might call ”fast money.”

Here today... gone tomorrow

Fast money definitely represents the typical character profile of those who chase "big numbers," but fast money is also very fluid, has little loyalty to anything other than seeking the next profit opportunity, and will leave you just as quickly as it came to you.

When you back up a bit and project that forward over the longer term, "fast money" represents little more then those sudden upspikes we can see in almost any crypto chart or even recent wunderkind IPO stock chart.

Fast money can definitely make your balance sheet look super impressive — for 24 hours, or maybe a couple of weeks, or a couple of month — but it can also make your balance sheet look like a trainwreck when that fast money moves on to the next grand scheme out there... because they suddenly posted an even bigger number.

A lot of it is no more than simple psychology: People tend to expect exactly what you promise them.

So if you promote your nice four-star restaurant by offering "Free beer and BBQ" to draw in lots of people... you will get LOTS of people looking for free beer and BBQ, and as soon as they realize that an actual dinner will cost $40 a person, they'll be taking all their excitement and ruckus with them to the next place offering free meals... while you suddenly find yourself "playing to a nearly empty house."

So what's the MESSAGE, here?

Make sure the people you draw to your venture... be that your own new business, or Hive... are actually the people you WANT. If you're looking for long-term builders don't cater to "big number chasers," no matter HOW alluring their numbers might be!

Thanks for reading, and have a great weekend!

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