Hex Price and Game Theory

28th Mar 2019
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This is not a sponsored article no payment has been done to write about Hex. This information is for informational and entertainment purposes only. All content on this site is not financial advice. Kindly note, we have a Bias when writing this article, because there are affiliate links below. However, we have made the best effort to provide balanced information on Hex.

In this article, I speculate over the dynamics of the price of Hex. This is my opinion; I do not know everything about Hex, trading, complex dynamic systems and human nature. So take all this with a massive pinch of salt and use it as to do your research. We do not advise you to buy Hex if you do so you do at your own risk. There is no risk to your BTC when claiming Hex. There could be some risks to your privacy; please learn more: How to claim Hex.

The price of Hex will be controlled primarily by demand and supply.

Hex Holders, referrers, trading bots, market makers, the originator account and even those who are sitting on the sidelines will influence both the demand and the supply of Hex.

The price of Hex will be determined by

  1. The demand for Hex is created by people wanting to buy it.
  2. People want to buy Hex to speculate on the price, and those who want to stake it. Staking Hex generates passive income.
  3. In the short term, demand will be fueled by FOMO (Fear of missing out)
  4. In the long term, there could be more demand Hex becomes a store of value.
  5. The supply of Hex creates more potential selling pressure.
  6. Supply will be created by claims, referrals, dividend payments, FUD (Fear, Uncertainty, Doubt), payments to the originator account and investors divesting.
  7. A marketplace is needed to manage demand and supply. It seems that Etherdelta and Idex could be listing Hex.
  8. There are other factors which control the Hex price which I might have missed.
  9. Go to the Hex Website to claim your Hex.

Hex is a crypto ecosystem with clear and transparent rules, all other tokens have rules, but with Hex the rules are transparent and open for all to see. This makes Hex an excellent case study to learn about the dynamics of crypto projects.

Where will demand for Hex come from?

There is only one party creating pure demand for Hex and that is the Hex buyer.

Demand is driven by human greed, speculation and the potential to make a profit. Speculation and the quest for passive income will drive demand for Hex. Learn more: The Potential of passive income from Hex formerly (Bitcoin Hex).

Those who buy or keep their Hex, do so because they plan to sell their Hex at some point in the future. The buyers of Hex will buy either because of FOMO or because they see more long term potential in Hex than the sellers.

The initial demand for Hex needs to be triggered through marketing. There are three drivers spreading the awareness of Hex.

  • Richard Heart, the founder of Hex, is very active on Youtube and Twitter promoting Hex. He has created a website, faq etc..
  • A community of punters is forming around Hex, spreading the Hex message. The do so partially because of their excitement for the project and partially because the more people claim Hex, the more the reward pool is inflated.
  • Hex has an affiliate system that incentivises the promotion of Hex.

Hex holders will earn a passive stream of income. Passive income is a popular idea, this could drive people to claim (or buy) Hex. The Hex passive income will come from the reward pool. You can think of this as a dividend.

FOMO. The fear of missing out, This could be an important driver for Hex demand. Early adopters may claim Hex simply because it is free, if Hex coins can be sold for a price. Then there could be buyers wanting to stake Hex to get more Hex.

The potential waves of Hex adopters.

  1. The first group to “adopt” Hex will come from those who follow closely niche crypto markets and those who see potential in Richard Heart. The early adopters.
  2. If Hex gets listed on an exchange, this will attract more people to claim their Hex and then either stake it or dump it.
  3. This will lead to more crypto media coverage. Spreading more awareness of Hex. More claims mean more supply, but also more potential demand from buyers.
  4. Hex starts to get coverage outside of the crypto space.
  5. After one year, when the inflation is reduced to only 3.69% Hex could be seen as a store of value…

Where will supply for Hex come from?

Claims for Hex create supply. Claims are 100% free. There is no need to pay for Hex. If your BTC is included in the snapshot then you can take part in the Hex Airdrop by claiming your Hex.

The claimed Hex coins can be sold on the market and the more claims are made, the more potential supply there is. The unclaimed coins will go to the stakers, but the stakers are locking in the coins, so they are reducing supply.

While each claim will generate supply it will also generate demand because it is likely that Hex holders will talk, tweet and Reddit about their Hex more than others who have no Hex.

The reward pool will inflate the higher the total of Hex claimed and the more individual accounts claim Hex. The reward pool pays out stakers. In the first fifty weeks, there are a lot of bonuses which will inflate the reward pool, creating huge amounts of supply.

Payments from the reward pool to the stakers create supply. If stakers decide to sell their dividend, then there will be more Hex supply on the market. They could also lock retake their dividends.

The first year there are a lot of incentives not to sell because the staking rewards are very high compared to the second year. This might lead to a lot of supply coming online in the second year as the passive income stream slows down.

FUD can stimulate the supply of Hex

FUD is a common term in the cryptoverse it essentially refers to fake news or sensationalized news. FUD is used by market manipulators, competitors, scammers and people who are feeling real fear. It can be used to push people to buy or to sell. When FUD is used to create buying pressure, it is referred to as FOMO (fear of missing out).

Let’s address some of the FUD risks.

  • Some claim Hex is a scam. Learn more in our detailed article: Is Hex a scam?
  • Hidden Originator account: The workings of the originator account are open for all to see in the public smart contract, so it is wrong to describe this as a “hidden” feature.
  • Originator account transactions: Any large moves of Hex by the originator account will attract attention. This will be probably the highest source of HEX Fud. Once the originator funds move to an exchange, the market will probably interpret this as more selling pressure.
  • Using the Bitcoin brand name: Hex was previously called BitcoinHex. This is no longer the case.
  • Loss of time and energy: Those who either claim or stake are at risk of losing their time if Hex fizzles.
  • Loss of capital: True, if you buy Hex, you are at risk of losing all your capital. This can happen because of bugs, lack of market interest and other unknown unknowns.
  • Loss of privacy. With a claim, your BTC and ETH addresses could be linked.
  • Richard Heart: At this time it all hinges on him. If he loses interest or disappears before Hex has gains traction, then Hex will probably crash and burn.
  • Richard Heart’s edge. Mr Heart has followers who love him, but also a cohort of followers who hate him. Some of this latter group goes out of their way to FUD Hex users.
  • Bugs in the Hex smart contract. Possible but the contract is being tested from a professional audit company.
  • Hex is hosted on Ethereum. If Ethereum does not fix its scalability and speed issues Hex will suffer. On the other hand, if Ethereum manages to scale Hex will benefit from new scaling and speed features.

Initially, the market might like Hex just because of its utility to be staked and generate more Hex. The miners are not getting the inflation, it is the actual coin holders who are in this case. However, the market likes announcements, partnerships and creation of more utility. The crypto press needs something new to talk about. Otherwise, there is little value in recycling old stories. At this stage, there are no plans to create more utility to Hex beyond the staking to earn shares of the reward pool.

Who are the Hex stakeholders and how will they influence the Hex Price?

There are four direct players in the ecosystem that control supply and demand, which ultimately will create the price discovery for Hex.

Hex holders. Who either have Hex because they have claimed it or bought it. They could

  • Dump as soon as they get Hex
  • Dollar cost average out
  • Stake for the first year and then dump
  • Keep Staking and just sell the dividends.

Hex Referrals

Hobbyists, Influencers, Commercial Entities might promote Hex for a reward. Each of these types of stakeholders will have different interests. Some will want to get paid for their promotion as they need to pay for their business expenses others can hodl.

Hex NoCoiners 

This stakeholder could turn into a Hex holder by claiming or buying Hex or FUD SM about Hex. They could do so out of their Hex perceptions or because they see Hex as a threat to coins in their portfolio.

  • Have never heard about crypto and Hex
  • Have heard about crypto but not Hex
  • Have heard about crypto but have not yet decided if they should claim Hex
  • Have heard about crypto but have not yet decided if they should buy Hex

Hex Originator account.

At this stage, we do not know the intentions of the Hex originator account.

The Originator account may control both the supply and the demand for Hex.

No one has claimed ownership of the Hex originator account. Mr Heart is the founder of hex. It would be best to assume that the originator account will do nothing for Hex. If you take this position and the originator account, takes positive action, then you can only experience upside.

The originator account will probably be the single most important entity which controls the largest bag of Hex. Asking in the Hex telegram, I got estimates that the originator account could own somewhere between 20% and 50% of the total Hex supply. This is staggering but not unheard of amount in the crypto community, in 2017 Ripple founders owned 60% of the supply.

The objectives of the originator account have not been disclosed. They can be in favour of Hex, negative to Hex and anywhere in between. The amount of Hex it will hold, plus its staking power can singularly sway both demand and supply.

It can sway demand, by not selling Hex or selling Hex and then using the funds to promote Hex. It can alter supply by just selling Hex and do nothing for Hex with the proceeds.

What are the options for the originator account: (Complete and utter speculation on my part, not investment advice)

  • Do nothing –  This would generate no supply or demand but would keep the community guessing on what will happening which could be the source of FUD.
  • Stake the Hex and use proceeds, not for the benefit of Hex – If the originator account staked he would take a large slice of the reward pool, this would reduce the returns from the stakers, and I am guessing that it would not go down to well with the other stakers. Reducing the demand for hex.
  • Stake the Hex and use the proceeds for the benefit of Hex. This is a possibility but it has not been confirmed anywhere. It would generate demand. There is no evidence whatsoever that the originator account will pump Hex in any way.
  • Sell the Hex and do nothing for Hex with the proceeds – Any movements from the Hex originator account will be visible on the public blockchain. Such movements will be FUD fuel. It is unclear if legally the originator account can state its intentions. If they do, Could Hex be classified as a security?
  • Sell the Hex and do something for Hex with the proceeds – Again this is a possibility which has not been confirmed anywhere. Similar to the above para. It is unclear if the originator account can make any statements which could make Hex a security. If Hex is classified as a security, some exchanges might choose to delist it, and it would be negative for hex.
  • Some other action not listed above.

Alternatives to Hex. Crypto systems which have elements of Passive Income.

Hex primary function is to generate passive income. There are a host of other crypto projects which have a passive income functionality. They are competitors to Hex and could drive demand for Hex lower.

A copy of the Hex System

Someone might clone Hex, for example instead of a Bitcoin snapshot they will take an EOS or Ethereum snapshot. Mr Heart has taken steps to avoid this from happening to the extent that if someone copies the system, it will be hard for them to get listed on exchanges. It seems that the claim tool will not be open source/public.

Minex bank

Minex bank has been around for more than one year. They offer the ability to stake coins for a fixed period of times. Minex varies the returns according to certain variables. Some of the highlights of their road map is issuing a debit card and creating a p2p market.

Other staking systems

There are countless other coins that offer online or offline staking. Hex has the advantage that the staking is done offline; there is no need to be connected 24/7 to the internet. Coins like Loom, Decred, Cosmos provide passive income. Similar to Hex, Decred, Dash and Pivx have aspirations of becoming a store of value, and they all provide crypto passive income. See a full list of revenue generating coins.

Masternodes

In a nutshell, masterodes are crypto project which uses a system similar to CD which generates yield. They need to be online, and the minimum collateral can be quite high. They also have a treasury system where anyone can submit a project to be funded. There are many examples these include Dash and Pivx.

Learn More:

Passive income from EOS

EOS has been the incubator of a number of dApps which have the functionality of offline staking and sharing of dividends.

There are also rumours that on the 1st of June 2019 Block.one will announce a UBI system which might have some form of staking.

Learn more: How to generate passive income from EOS.

Crypto Lending

There are two types of lending, on-chain or off-chain. When lending off-chain you do not own the keys, so all you own is an IOU. Not your keys, not your coins.

Learn more about Crypto lending: 39 crypto lending sites.

Hex Market Makers

Liquidity will be an important factor in the Price of Hex. Liquidity is the volume traded, of a particular coin. Without liquidity, price can experience extreme fluctuations.

Conclusion

The risks of buying Hex are high and in no way do we recommend to buy Hex. There is no risk to your Bitcoin when claiming Hex so why not claim it? It’s free money.

The price of Hex will initially be a fight between FUD and FOMO. Those who will control the narrative will sway the opinions of the Crypto sheeple, and in turn, they will increase demand or supply.

Hex appeals to a very niche market in which there are numerous providers of some form of passive crypto income. It needs to establish itself as a store of value in order for the coin to have long term value.

Learn more Hex Website

Not investment advice. Not financial advice. Consult your financial advisor. Not a recommendation to buy, sell or hold. The staff of this site may own these digital asset/s mentioned on this page. Investing is risky and you may lose all your capital. See full disclaimer.

Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice for you.

Author: Jim Reynolds
Jim Reynolds. Is passionate about finance, passive income and cryptocurrencies. He writes about his passions on NodesOfValue.com. He has worked in the tech and financial industry for a few decades. He holds a masters in business admin and a bachelors in IT. All his writings are not investment advice.

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