Does HBD’s 20% APR make it a scam?

This is an overdue article. Not completing it, I will consider it a waste of time.

Yesterday, after listening to @neopch uploaded video, I made some notes thinking to write later about the points raised in the HBD scam “debate.” Unfortunately, I got distracted by many concerns in the Business Office, such as the Bureau of Internal Revenue (BIR) penalty and the need to apply for amnesty to the Securities and Exchange Commission (SEC).

Listening to TCMD’s voice reminds me of a conversation with a friend a week ago. He shared with me that he invested his money in a government investment tool with a 6 to 7% annual return. Though I did not mention HBD, I mentioned the possibility of a saving with 20% interest rate. As an accountant by profession, his immediate response is that such a thing doesn’t exist. And so, I did not pursue the conversation for he might misinterpret me as pushing a “scam.”

Hearing the word “scam” associated with any project out there is sufficient enough for anyone to close his mind to take a serious look at that particular project. At this point, I think many have already heard such a heavy word used to describe HBD. The fact that HBD has a 20% APR is considered a red flag.

TCMD raised several points. One of them is clarifying the distinction between the contention that HBD is a scam from the question of the sustainability of the 20% APR and the feared “red flag.”

Perhaps, the critics are thinking that HBD giving 20% APR qualifies it as a scam. For TCMD, the response to the scam allegation is clear. Only those who know nothing about Hive will insist that HBD is a scam.

Turning to the other questions whether the 20% APR makes a project a scam or unsustainable, we need a different response. Another point that TCMD emphasized is that no single individual or any centralized entity made the decision to come up with such a high-interest rate. In fact, he mentioned that he favored the more conservative 12%.

And so, it was the community that made the decision to increase the APR of HBD to 20%. Another surprising idea I heard is about a proposal to increase the interest to 30%. We don’t know if this will pass the polling process or when will it be implemented. Perhaps, once such an increase is made, the voice of those who accuse HBD of a scam will get even louder.

Another interesting insight mentioned in the video is that the history of the market price of HBD is usually over the peg rather than under the peg of $1.00 worth of HIVE. Given that the token has a seven-year history (as far as the technology behind is concerned) and many digital applications are developed as well as the growing number of in-person economies utilizing the token, the fear that it might follow the footstep of LUNA is unlikely to happen. Perhaps, if no projects are being built on top of Hive, such dreaded crash may be justified.

Lastly, TCMD mentioned that looking back at the history of the price of the token, the typical swing is between 10% to 20%. Yes, no one can say for sure about the future direction of the price of the token, but if I will bet between crashing and price appreciation, I think the facts support the latter.

So that’s all I’ve learned from listening to the video uploaded by @neopch. Thanks!

Finally, I was able to complete this article and I feel satisfied somehow.

Grace and peace!

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