Inequality? Or Just A Fact Of Life?

How Do The Rich Get Even Richer? 

I think most of us have heard the saying, “the rich get richer, while the poor get poorer.” And the rich keep getting richer mainly because many are paying little in the way of taxes, if anything at all. How is this possible? What are the brazen loopholes and tricks that the 1% use to stay ahead and continue to gain wealth?   

Over the years, there has been much discussion, studies, and headlines around a billionaires tax and what it means for us non-billionaires. So why is there all this talk about billionaires and taxes in the US once again? 

Well, that's for two key reasons. Firstly, the policymakers in Washington are trying to go after this class of people with new tax proposals to help fund the American Families Plan.

The other fundamental reason it’s back in the spotlight is the amount of wealth accumulated over the last decade by specific individuals. And their wealth has been taxed at extraordinarily low rates. 

Image Source: Lisa Larson-Walker/ProPublica. 

Thanks to the Secret IRS files, the data was recently brought to light, essentially a leak of tax information that ProPublica covered in June. The leak contained vast troves of IRS data on the tax returns of thousands of the nation's wealthiest people covering more than 15 years. 

The Secret IRS Files

This report uncovered some of the most Illuminating stats of people like Mark Zuckerberg, Elon Musk, Jeff Bezos, Warren Buffett, etc. From 2014 to 2018, the 25 richest Americans increased their wealth by a collective $401 billion.

However, they only paid taxes of $13.6 billion during that period, equating to an effective rate of about 3.4%. Crazy, right? And if we were to drill down into some of the richest of this rich list, the numbers get even crazier. 

The illustration below shows the taxes paid on wealth growth for Buffett, Bezos, Bloomberg, and Musk. Buffett only paid an effective rate of 0.10%. Paying such low tax rates, it's no wonder that Buffett has become one of the biggest proponents of raising rates on the uber-wealthy like himself. 

Image Source: ProPublica

Now, you can see the effect of rates is 0.98%. 1.30% and 3.27% for Bezos, Bloomberg, and Musk, respectively. 

Another interesting graphic from this report is the one below.  It compares wealth growth and taxes paid by Bezos and the average American family. That noticeable dip on the household graph is that during the 2008 recession, many families lost their homes, where the bulk of their assets were. Bezos mostly owned stock, so he escaped any foreclosure. 

Image Source: ProPublica

The point here is not to shame these billionaires, as they have built successful companies, and capitalism rewards risk-takers. Moreover, it's also worth pointing out that all these folks have been paying what is legally owed. 

They've been doing what any rational person would be, using the tax code to their advantage. But this report highlights that the burden of proportional tax is borne much harder by those less well-off. And the reason for that is because of that same tax code.

 

The Enigmatic Codes

So let's take a closer look into these complex codes. Before we can delve into the specific tactics used by the rich, we have to understand precisely how most of them make their money. That's because the way that they make money will impact the type of taxes they'll pay. 

Most people will pay an income tax on their income which is mostly your primary source of income. In the case of most of society, this is their salary or wage. This income is taxed at different rates and goes up to 37%  at the US Federal level for the highest tax bracket. 

The examples used are from US taxes. Although the practice is broadly the same in other countries, This income tax is usually hard to avoid, as it's taxed when it's earned, and in many cases, taken out of your paycheck. 

However, when it comes to the uber-rich, they own assets that are taxed as a capital gain only when they appreciate. Notably, long-term capital gains tax for assets held for more than a year is much lower than income tax. 

For example, the top tax rate for capital gains in the US is 23.8%, which is much lower than the maximum rate on ordinary income. Based on the raw percentage, that would be the same rate of tax paid by someone who earns between $86k and $164k. So, you can now see why so many of these billionaire founders of companies choose to take token salaries.

Bezos earns a measly $80k, and Steve Jobs famously took a one-dollar salary. Mark Zuckerberg and Larry Ellison have followed suit. By doing this, they're avoiding having to pay any income taxes at all. They are taking stock and options on a stock that will only be taxed at the capital gains rate, over 13% lower than they would have paid, should they have opted to take income. 

But the critical point is this capital gains tax is only due to being paid once the gain is realized, in other words, sold. They are not obligated to make this sale in any way, shape, or form. They can hold on to these assets for a lifetime and never pay tax on them, and that is precisely what most of them do. 

So, how can these guys afford to live without realizing those gains? There’s a common misconception that wealthy people try to avoid debt, and it’s actually quite the opposite. They are among the most prolific users, and they do it in ingenious and efficient ways. One of these is borrowing against their assets and living off borrowed money. They're using their vast assets as collateral to take out debt. 

Buy Borrow Die Tactic

They’re doing this because they don't have to sell those assets and realize that gain, so they can avoid paying any taxes on the rapid appreciation in their wealth and still live like kings. This self-explanatory tactic is called, Buy, Borrow, Die. 

In a nutshell, they accumulate valuable assets that can be used as collateral assets such as stocks, bonds, real estate, art, etc. Then once they have these assets, they move on to the next step, looking to borrow cash using the assets as collateral. Then, of course, the inevitable happens, and they leave their fortune to their heirs. 

The first two steps may sound similar to a home equity line of credit, but it's much more favorable than that. We usually have pretty onerous terms when we apply to get credit and use our house as collateral. We have higher interest rates, and the amount of credit we get on our homes is limited. 

However, if you offer a bank highly liquid securities as collateral, you can get an absolute bargain. According to this piece in the Wall Street Journal, some of these lenders don't even need credit reports. Goldman Sachs’s private bank has even offered securities-based loans on anything from $75k to $25 million, with no personal financial statements, tax returns, or paper applications. 

In terms of interest rates, Merrill Lynch quotes 3.2% for those with assets of over $1 million and a low 0.87% for those with assets of over $100 million. Those are rates of interest and terms that we could only dream about. Then once they have this cash, they can do whatever they want with it. 

Yes, they have to pay interest, but it's trivial. Moreover, the value of their assets usually appreciates more than the interest rate. This is termed Positive Carry, where they end up better off than before. 

But the real kicker is that interest on loans is tax-deductible. These interest payments can be used to offset their already low tax bill. And, of course, they don't really ever have to pay this off. The banks are okay with rolling it over into perpetuity. 

You get to live your best life and still retain the upside on all those assets. You see, it benefits the banks to have such high-value collateral. It's easy to liquidate, unlike houses, and the bank itself can earn high returns on those assets. It’s the rehypothecation process, and most of the nearly 1000 wealthiest Americans use this tactic. 

For example, Elon Musk, and cable billionaire, John Malone have pledged $150 billion of their stock for loans. There is the risk that the stock collateral falls in price and that these billionaires will get a margin call. Still, these assets generally appreciate, especially with all that money printing going on at the FED. 

Image Source: Tenor. Funarg

Now, there's a lot of accumulated capital gains sitting out there, and by some estimates, it's as large as $5 trillion. This wealth has never been taxed and never will be taxed in some cases. That's because of the final step required of these billionaires, which is to die. 

When these billionaires with so much wealth eventually die, they leave that wealth to their heirs. They may have outstanding loans that these heirs then pay off; however, they keep the assets. These assets may incur an estate tax, but several strategies around gifting, donations, and charitable foundations lessen the burden, but that's irrelevant when considering that these heirs won't have to pay those accumulated unrealized capital gains. 

It is all thanks to something called the Step-Up in Basis. Essentially, when people die and their heirs inherit their fortune, the “cost” of the investment in the eyes of the IRS is the value of the asset that they received. That makes the asset free from any capital gains tax. If or when the asset appreciates again in value, the tax payable is only the difference, not the original price.

This is how some family dynasties have held onto their wealth for generations. They can pay legions of estate planners and accountants to structure the most sophisticated of vehicles that are beyond the reach of us mere mortals. 

 

The Ongoing Debate

Many progressive politicians looked upon these tax strategies for the elite rich with some indignation. They are now at the forefront of a debate around billionaire taxes in the US. A proposal by the Biden Administration plans to come after the unrealized gains of assets held by wealthy individuals to help fund the massive social spending and climate bill. 

Irrespective of what the bill will finally contain, it's clear that part of the effort to pay for it involves taxing wealthy individuals. For example, back in May, the initial target of the bill was the Capital Gains Tax rate. 

As they were aware of the fact that CGT was much lower than income taxes, the Democrats proposed increasing the top rate for CGT to 39.6%. If you include the Medicare surtax, it will be 43.4%, with some state taxes increasing those numbers. 

This proposal was a tough sell as it applied to anyone with over $1million in income, which is a much larger subset of people than just billionaires, so that was overturned. The Biden White House returned with the proposal to tax the unrealized capital gains of some of the wealthiest Americans, a much smaller subset of around a thousand people.  

That didn’t go down too well either, as it sounded like a wealth tax, and in fact, that’s how it was marketed to some progressives. Janet Yellen explained that it was “merely a capital gains tax on liquid assets held by extremely wealthy individual billionaires. I wouldn't call it a wealth tax.”  

 

The Terminology Not The Real Issue

Whatever they want to call it, it is clearly a tax designed to go after the wealthy for their unrealized gains, a tax that many legal Scholars said may even be unconstitutional. But it's not the terminology that was controversial; it’s the whole concept itself. Who would determine whether an asset was sufficiently liquid? Where do you draw the line?

And if you do draw the line, would this discriminate against some billionaires in favor of others? Would those billionaires who have most of their wealth in stock have to pay that unrealized gain tax, while others who own land don't?

What if these billionaires have to pay that tax in one year on a Gain, but the following year, there's a loss? Shouldn’t they be entitled to a tax refund on the back of that loss? Will the IRS pay that out? 

What if some of the most ultra-wealthy have to sell their holdings to pay these taxes? What impact could that have on the broader market? Assuming someone like Elon Musk or Jeff Bezos had to sell tens of billions worth of stock in the companies they own, would that not harm the stock market? The same stock market that millions of middle-class Americans are invested in with their 401ks. All of that, for a mere potential tax benefit of $250 billion. 

In response to the above questions, the answer lies in the evidence of how these wealth taxes have worked previously in Europe. In 1990, twelve European countries had a wealth tax, and however, there is only four today. One of the most recent casualties of the wealth tax was France which scrapped it in 2017.

This has provided a practical case study to analyze the real effects of these wealth taxes. In France’s case, since the 1980s, it has had an annual wealth tax on all those individuals who had over 1.3 million euros in assets. 

The first and most obvious impact of this wealth tax was that it drove the billionaires out. There was an exodus of wealthy people from France when it was in place, and because billionaires are the people who have the most means to move their tax domicile, they can easily move to more friendly regimes. By the prime minister's estimate, some 60,000 people with 35 billion euros worth of assets left between 2000 and 2016. 

Furthermore, the wealth tax was tough to enforce and costly. According to French Economist Eric Pichet, the cost of administering the tax was twice as much as was brought in. The country's fiscal budget was not only worse off than if it hadn't gone after this tax, but it now had even fewer billionaires to tax in the first place. 

Source: The Economic Consequences of the French Wealth Tax

Many other countries in Europe came to the same conclusion – the administrative burden just didn't make much sense. There were so many exemptions and loopholes that the rich could almost wholly avoid it. Then, of course, there was the impact this had on general Investments. 

Despite what most people tend to think about billionaires, their Investments do help to fuel innovation and economic growth. This was precisely the reason given by the Austrian government when it eliminated its tax, and it placed an “economic burden on Austrian Enterprises.” Switzerland also illustrates the potential drawbacks of a wealth tax in this article. 

Consequently,  Europe got a real-life practical example of the Laffer Curve. This well-known economic theory shows the decreasing marginal returns of taxes, and you get to a point where increasing taxes brings in even less revenue. 

Image Source: Fee.org.The Laffer Curve

 

Closing Thoughts

Now we’re faced with the pandemic that destroyed our economies and pushed millions into unemployment, but the rich got even richer during this time. Not only that, but they managed to accumulate most of that wealth without having to pay their fair share of tax on it. 

Naturally, this has led to a backlash from the populace. It feels just so inherently wrong that Warren Buffett pays 0.10% on his taxes, while his secretary pays over 37%. But to Warren's credit, he has been the one to point out this disparity. 

However, having said all of that, the alternatives don't sound too appealing either. Taxing unrealized gains is a recipe for potential disaster that could bog the IRS down for years. A proposal that the rich would fight tooth and nail and which could be proven to be unconstitutional. 

General wealth taxes have also been highly ineffective when implemented in European countries. Their impact has made governments and citizens poorer, while the rich simply migrate to other more favorable jurisdictions and enjoy their wealth there instead.

Some argue that we shouldn't be taxing success. If you disincentivize someone enough, then they will reduce their economic output. (That's the Laffer Curve.) I’m sure many would not be happy if the government wanted to tax all the gains on the cryptocurrency they’re hodling that has not been sold or has any intention to sell.  

I’m sure that many homeowners feel the same about their houses or apartments. Does this mean that the billionaires who own stock cannot feel similarly angered by the proposal? It's a complex and sensitive predicament for sure. 

The fact remains, though, as pointed out by the likes of Joseph Stiglitz and many others, that inequality is a blight on our society; tackling inequality would make life better for billions of people and supercharge the world economy yet, it's easier said than done. 

Perhaps instead of targeting the wealthy individuals at the top of the pyramid. It would be better and fairer to go after the corporations that have made them rich in the first place. The corporations with billion-dollar profits and tiny tax bills. The corporations that offshore their income and treat their workers appallingly in many cases. 

Individual enterprise should be allowed to flourish, but corporate greed is a much more insidious and damaging force in the world. So, maybe they should go after that instead. What are your thoughts? 

 

 

Resources: Coin Bureau, ProPublica

 

ELROND – Taking Blockchain And Crypto To The Next Level

A Technology Ecosystem For The New Internet

Cryptocurrencies have many use cases. Some act as a store of value, others power blockchains that make it possible to create trustless digital contracts and permissionless, decentralized applications. Some cryptocurrencies are pegged to Fiat currencies to allow for stable transfers of value, and a few even underpin protocols that offer decentralized data, storage, and video streaming. 

Each of these use cases requires a particular set of blockchain attributes and economic incentives. This is why it's often said that there is no single cryptocurrency project that can do it all. That may well be true, but there is one that comes close. 

 

What Is Elrond? 

Elrond has combined the scarcity of Bitcoin, the programmability of Ethereum, and the speed of next-generation cryptos, like Solana, to create a cryptocurrency network unlike any other. Elrond is a platform built for internet-scale and capable of processing thousands of transactions per second at $0.001 per transaction, and able to scale to hundreds of thousands with demand.

Elrond’s distinction is being a project with a soul. One that has united forces of an incredibly vibrant community of 190,000 people, spanning 18 languages and in almost 30 countries. Elrond aims to create the backbone for high bandwidth, transparent financial system, and extending universal access to anyone, anywhere.

Elrond’s egold (EGLD) native token has exploded in value over the last year and seems to be poised for more gains. The Blockchain project has been considered under the radar and received very little crypto media exposure until now. 

Image source: Elrond · Growth

Historically, Elrond was founded in 2017 by Benjamin Mincu, Lucien Mincu, and Lucien Todea. The Elrond white paper was released in November 2018, and the elrond main net went live in late July 2020. Like Cardano and Polkadot, Elrond is a competitor to Ethereum and seeks to be the foundation for the “new internet economy.”

 

Growth At All Costs

Unlike many smart contract cryptos, Elrond has a “growth at all costs” approach and has wasted no time onboarding individuals and institutions. It seems to be a perpetual process as Elrond has announced so many partnerships and integrations almost daily that it’s too many to mention here, so I’ll touch on some highlights. 

Coin98Analytics produced this graphic to demonstrate the enormity of the Elrond ecosystem.

 

The Ledger hardware wallet enabled support for egold in November 2020 and partnered with the Poly Network to make it possible to use Bitcoin, Ethereum, and dozens of other cryptocurrencies on Elrond as wrapped ESDT tokens.  

Elrond's documentation explains that they will be native to the Elrond chain, like e-gold. This means that they won't require a smart contract to issue and send like ERC 20 tokens on Ethereum. This protocol is very similar to Cardano’s Native assets, which have almost the same properties as ESDT Tokens. 

In December 2020, Elrond announced that it had partnered with Bitgo, which is one of the largest cryptocurrency Custodians. Also, Binance joined Elond as a staking provider. In October 2021, Elrond commenced collaboration with Ardana Stablecoin Hub on Cardano Blockchain to make egold (EGLD) one of the first native assets to collateralize stablecoins issued on the Cardano network. 

In the long-term, this collaboration will make it possible to bridge assets, such as the Cardano-native ADA token or other tokens issued on the two blockchains. This will allow their value to be leveraged in DeFi opportunities available on both networks.  

Beniamin Mincu, Elrond Network CEO says,

“This creative exploration of collateralizing a stable coin on one chain with the native coin of another can be a good starting point for interoperability between two progressive global ecosystems that are anchored in performance and innovation.”  

At the beginning of this year, Elrond began its initiative of onboarding the next billion people called 100 days of Hypergrowth. In addition to onboarding as many projects and users as possible, Elrond has launched its fully community-owned defy ecosystem, the Maiar DEX DeFi platform. The project describes itself as a technology ecosystem for the new internet. It includes fintech, decentralized finance, and the Internet of Things.

“By distributing Maiar DEX ownership to the next billion users, we lay the foundation for a truly global financial system that is accessible to everyone, everywhere,” said Beniamin Mincu, Elrond Network CEO.

 

What Makes Elrond Blockchain Different?

The Elrond blockchain uses Adaptive Stake Sharding to achieve incredible throughput features a robust consensus mechanism called Secured Proof of Stake and is smart contract compatible thanks to Arwen Virtual Machine.

In layman's terms, sharding involves breaking up a blockchain into multiple pieces called shards. This increases transaction speed because you can divide the transactions between different clusters of validator nodes running shards on the blockchain and process them in parallel. This is in contrast to regular blockchains, which require all the validators or miners to process one transaction at a time.

Sharding in the Elrond network was designed from the ground up to address the complexity of combining network sharding, transaction sharding, and state sharding. Elrond’s adaptive stake sharding takes this idea to the next level by dividing transactions, validators, and even the record of transactions between shards. The result is a cohesive protocol design, which not only achieves full sharding but attains the following goals as well:

1. Scalability without affecting availability requires increasing or decreasing the number of shards to only affect a negligibly small vicinity of nodes without causing downtimes or minimizing them while updating states.
2. Fast dispatching and instant traceability require that computing the destination shard of a transaction must be deterministic and trivial to calculate, eliminating the need for communication rounds.
3. Efficiency and adaptability require that the shards should be as balanced as possible at any given time.

A trivial step-by-step example of how it works is depicted in the animation below:

Image Source: Elrond Network

 

Secure Proof of Stake (SPoS) ensures that no single shard is corrupted by randomly selecting a set of 61 validators from each shard and choosing one to produce a block based on its stake and reputation. This unique setup makes it possible for Elrond to process over 5,000 transactions per second per shard.

Image Source: Elrond Network

 

The best part is that the Arwen Virtual Machine gives smart contract transactions about the same speed, which is quite rare. More importantly, the Arwen VM can operate between shards, a development hurdle many other sharded blockchains are struggling to overcome.

Elrond is a complete redesign of blockchain architecture to achieve global scalability and near-instant transaction speed. The underlying technology beyond the current state-of-the-art concept is better explained in the video below by our mate Guy from Coin Bureau. 

 

Wrapping It All Up

Elrond is a next-level project, and it managed to combine the best features of many leading cryptocurrencies in the space and even improve them. Elrond's adaptive state sharding is like the sharding Ethereum is working on in its 2.0 version, but better. Elrond’s secured Proof of Stake is like Harmony’s Effective Proof of Stake (EPoS) but better. Elrond’s Arwen Virtual Machine is like Cosmos’s Cosm Wasm Virtual Machine, but better. 

When you combine these three features, you get a blockchain that is theoretically capable of handling more transactions per second than every other smart contract Blockchain combined. Elrond’s development has been exponential since its main net launched last year, and the growth is well deserved with much more on the horizon.

Furthermore, with its highly regarded team, Elrond started out with very few proclamations but a lot of activity and consistent growth over time. Contrary to what often happens today, where the launch of new projects is preceded by too much spam, sensational announcements on social networks, millionaire ICOs to raise substantial funds before any commencement of technical work on the project. 

Conversely, Elrond’s development started out quietly and self-assuredly, without asking anyone for money, at least initially, and then managed to gain investors’ trust with a whole series of steps and transformations that have evolved over the recent years.  

I believe we will be hearing a lot more about Elrond in the future as momentum builds and the need for this unparalleled technology becomes paramount to enable universal access and transcend the global economy. Elrond will be the wave that will lift all boats, taking this massive opportunity from a niche group of people and extending it to everyone in the world. Elrond is set to open the flood gates to create a new market.

Disclaimer:  This content is provided for informational purposes only and should not be relied upon as legal, business, investment, or tax advice. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors and may not under any circumstances be relied upon when deciding to invest.

 

 

 

MARKETHIVE UPDATES AND INTEGRATIONS

• Wallet in final draft mode

• Staking the Markethive Way

• Staying One Step Ahead 

Markethive started out as a sophisticated inbound marketing platform with a social media interface harvesting a robust collaborative culture. The entrepreneurs of the Markethive community have been using the free system and tools, promoting their businesses, and branding themselves across the internet with much success. 

With the advent of Blockchain technologies, Markethive set its path on an unprecedented journey of combining marketing, social media, digital broadcasting, e-commerce, gamification, etc., with cryptocurrency and decentralized Blockchain, distributed ledger technology. An ongoing project of massive proportion to deliver sovereignty, financial and self, and freedom of self-expression for all equitably, without bias. 

Markethive is a Vision from the Divine Source. Its mission is to fill the vacuum for the world's entrepreneurs – To empower and enrich the lives of every individual on every level across the globe. And the timing couldn’t be more perfect as we witness the soul-less destruction, tyranny, and surveillance of humanity gift wrapped and delivered to us as protection and for our own good. 

We are building an ecosystem, and there’s an absolute need and use for our coin (HVC) for everything we do; therefore, the potential for the open market to accept and embrace HiveCoin is very promising. Binance has done similar to what Markethive is doing. You can read about its rise to success as an ecosystem in this article.   https://markethive.com/group/marketingdept/blog/theriseofbinanceakintothemarkethivejourney

 

Wallet In Final Draft Mode

The Markethive web wallet is in the final draft mode and has various functionalities. It’s currently being built on Ethereum and is a mechanism that has been developed from scratch to service the needs of the community. This is Markethive’s internal wallet, with the end goal of a wallet app accessible from your smartphone (external wallet) that includes built-in messaging, news feeds, e-commerce, and security measures. 

Notably, active Entrepreneur One members will be the first phase of receiving the initial internal wallet upon release. It’s also important to note that the Entrepreneur One membership will no longer be available when the wallet launches. 

If you're considering taking advantage of all the benefits of the E1 upgrade for $100 monthly, which includes 1/10 of an ILP per year, go to the Membership Upgrade tab on your home page. Time is running out for this offer. Entrepreneur One Upgrade Explained.
 
Click here to learn more about the ILP (Incentivized Loan Program)

 

The Vault Has A New Home

Apart from documenting your reports, history, balances, and transfers of HVC, ETH, and other top altcoins, the Markethive wallet will display a live chart tracking the progress of the HVC value in real-time. Your HiveCoin balance total is shown, including the HVC you have staked, which means what you have deposited into the Vault and rewards you with additional HVC also displayed, thereby increasing your portfolio. 

The wallet also houses the Vault, which displays your Markethive Credits, subscriptions, and statements. The Vault, already in operation within the Markethive back office, is where you currently purchase Markethive Credits to pay for your subscriptions and various services; however, all the functions of the Vault are being upgraded and are accessible in the wallet, so it’s fundamentally a comprehensive economic center for the Hive.

The image below is a mock-up of the internal wallet to get an idea of what’s coming. 

 

What Are Markethive Credits?

A Markethive Credit is similar to a stable coin and is what generates all of the activity. One Markethive Credit = $1usd. These credits can be purchased through the Vault section of the wallet via Bitcoin, Ethereum, credit/debit card, or Paypal.  

You can pay for anything through the Vault such as the Banner Advertising Impressions, the Boost, Press Releases, and Sponsored Articles, gaming activities, and more as these services are implemented and introduced into the Markethive system.
Your Vault credit can be used to buy ILPs and future upgrades that will unlock extra services and incentives. These will follow once the wallet is launched. 

 

Better Than A Bank Account

Utilizing the Vault by having an ongoing threshold balance of Markethive Credits can be very lucrative. In other words, keeping a certain amount in the Vault above your monthly commitments (subscriptions) that are debited will award you compound interest paid in HVC of up to 5% and deposited directly into your CoinClip or Wallet. 

 

How Is the Interest Calculated?

Markethive releases coins into the market, in contrast to mining, via Airdrops, Bounties, Faucets, or Micropayments. Keeping a designated threshold of Markethive credits in the Vault is a form of staking. Staking generates interest, meaning you are paid additional HVC based on how many coins you hold and your other activities in Markethive.

Your Hive Rank score adds to your daily interest and can be a significant multiplier. Your CoinClip Score is determined by the spread of earned and current balance of HVC. Essentially, if you send coins out of the system, you lower your score for staking. If you bring coins into the system, you increase your score. 

ILPs count as coins, so buying ILPs can significantly increase your staking rewards. Upgrading your membership adds to your staking interest, and logging in every day is rewarded with an additional interest increase.

Transferring any chosen amount of HiveCoin, HVC, from your wallet into the Vault for a set time period (e.g., 30 days) will earn interest also. Essentially, you are staking those delegated coins, and the higher the balance of staked coins, the more interest earned. You can choose to keep it in the vault and accumulate or transfer it to your wallet for transactional purposes. 

 

Image source: Fool.com What Is Crypto Staking

What Is Staking In The World Of Crypto? 

Staking is a way to put your crypto to work and earn rewards on it. Staking in general crypto terms is how many of the cryptocurrency blockchain projects verify their transactions, allowing participants to earn rewards on their holdings. 

Staking simply stands for holding a delegated amount of cryptocurrency in your wallet for a fixed period and is integral to the Proof of Stake protocol and a way of supporting the blockchain of a cryptocurrency in which you’ve invested.

Staking is available with cryptocurrencies that use the proof-of-stake model to process payments. This is a more energy-efficient alternative to the proof-of-work model, which requires mining devices that use computing power to solve mathematical equations.

 

Staking – The Markethive Way

In the case of the Markethive, the Vault section of your wallet is where you can stake the coins you hold and is an easy and passive way to earn income. The rewards and interest that one gains from staking vary depending on the length of the time, the amount of HVC staked, and Hive Ranking. 

Because Markethive includes the Markethive Credit threshold balance in its staking protocol, it would be advantageous for you to keep it above the threshold along with an increasing Hive Rank enabling you to earn the maximum amount of interest. The Vault will notify you if you go below the threshold. 

By buying or earning HiveCoin and banking it in the Vault, you are essentially burning the coin, and it is a good thing, as explained in this article on how Markethive creates coin velocity. There are many ways to burn crypto coins which is advantageous to the wealth and health of the currency. 

In this instance, to burn the HiveCoin means pulling the coin out of the marketplace and staking or holding it in the Vault, so there’s less supply. The less supply, the greater the demand, which in turn increases the price of the coin. 

So there are three types of currency in Markethive. The HiveCoin, (HVC), the ILP Tokens, and the Markethive Credits. And remember that the Markethive Credits are always equivalent to $1usd of which you buy products and services. Keep in mind the more you use the vault, the higher the interest rate. The more you use the system, the higher the interest rate. 

The four facets scored for stake interest are Hive Rank, Coin Clip score, Loyalty Level, and Attendance Bonus as illustrated in the schematic below. Also, total interest is paid on both your vault balance and coin clip, or wallet balance, and the interest on this combined total is paid at the end of each month. 

 
CEO of Markethive, Thomas Prendergast, reported in a recent email to all in the Markethive community, 

“The wallet is in its final draft and design. How long this can take is still to be determined, but we already have a working wallet. When the interface is completed, then we will announce the wallet to be released. I don’t easily get excited, but this has me rather anxious as this is a major milestone of the many milestones we have reached.”

 

Meanwhile, Two New Systems Implemented 

Two other vital upgrades were accomplished this week: 

1. New registration and login system. 
2. Markethive support ticket portal. 

Markethive’s registration and login system is now owned and operated by Markethive. This is important as we now do not have to rely or depend upon 3rd parties such as Oneall Login API Services. 

You choose which email networks you would like to log in with, and the ability to log in with your domain email will be integrated. When logging in with the new system for the first time, enter your email or username. The system will recognize you have an account and send an email with a link to log in initially.

Once logged in, go to Login Networks in your settings and add the other networks displayed. There will be more added as we move forward. 

The social networks you have linked to your Markethive account are now for remote broadcasting only with the added advantage of the bounty program that is in the works. This means you will be rewarded for registering all your separate accounts through the Markethive platform and by subscribing and following the many Markethive social media accounts will qualify you for the Infinity Bounty Program. 

Markethive Ticket Support is now active. This system enhances personalization, keeps records and information on all tickets you generate. You can upload documents and prioritize your queries, streamlining the support process. 

Ticket support can be found at the far right on the blue bar on the Home page. Fine-tuning to this system is still required, so your feedback when using the ticket support will be much appreciated. 

Now, our Telegram Support Channel can become a support for the Markethive community. It will be a place where people can ask questions or seek assistance from other Markethive associates about anything they may need help with—Eg., uploading a video, etc. 

These two new implementations make Markethive a more independent force, galvanizing its armor protecting its community from the oligarchs’ control and oppressive antics where many have fallen victim. Markethive – A sanctuary from the world chaos and storm that is brewing with intensity. 

Come to our Sunday meetings at 10 am MST as we approach massive major upgrades and be the first to know about it. See and hear explanations, ask questions, and witness the ever-evolving technology and concepts of Markethive as we stay one step ahead of tyrannical technocrats.  The link to the meeting room is located in the Markethive Calendar. See ya there.