Thread by @DysonLogos

1/ Inspiration is a KEY component to encouraging roleplaying in 5e. It is one of the elements that really changes up the game by directly rewarding roleplaying without using XP as the reward.

2/ The assumption in the rules is that PCs earn inspiration whenever they roleplay their character's Flaws, Bonds, Ideals, and/or Traits. A typical player should be able to trigger this at least 3-6 times in a session.

3/ Inspiration is a binary thing. Either you have it or you don't. You can't have more than one.

You can spend inspiration in two ways

1. You can give it to someone else for being awesome. So if Fred pulls off an awesome stunt, you can throw Fred your inspiration.

4/ 2. You can spend it to gain advantage on any d20 roll.

I recommend spending it quickly, so you'll be able to get it again next time you roleplay a flaw, trait, bond or flaw.

5/ The trick to prevent hoarding is to hand out inspiration often. In my experience the only thing players hate more than the thought of not having a resource, is the thought of wasting it.

6/ Every time you give them inspiration when they already have it has them effectively "wasting" an inspiration.

7/ Once they know there's a good flow of inspiration, they start spending, and the game's "inspiration economy" steps into action. The big roleplayers will start handing off their inspiration to the players who don't roleplay as actively in order to make room for their next one.

8/ Hand them out like candy. The more often you hand them out, the more often players will start using them.

I use nice big fantasy coins to represent inspiration, so they are clearly visible and easy to remember, and make the "economy" aspect more tactile.

9/ From @HighScoreKid & @is3rith comes a change to truly perfect the inspiration economy - have the players be in charge of it. Limit them to 1 inspiration per Trait / Ideal / Bond / Flaw per session and claim it themselves when they roleplay said. GENIUS!