LeoGlossary: What Is Hive
Hive is a web 3.0 ecosystem that is designed to utilize the technologies that are projected to usher in the new era of the Internet. This was started in 2016 with the code being written by Dan Larimer. It was the next evolutionary blockchain he put forth after creating Bitshares.
The idea was to provide a social media platform which centered around blogging. Individuals would be able to reward content creators and curate articles based upon the value of their votes, which was a direct correlation to how much of the base layer coin was staked.
Over time, other elements of social media were added in addition to blogging.
Hive is a blockchain network that utilizes distributed ledger technology. From the financial aspect, it is monitors all transactions that occur on-chain. The ledger is mirrored on a number of different nodes simultaneously, decentralizing the control of the network. Consensus is required for all transactions to be included in the ledger.
It is a Delegated Proof-of-Stake (DPos) system. This means that stake used to vote on the block producers. On Hive, each person can vote for 30 nodes, called Witnesses. The Top 20 vote getters are considered consensus.
Block production is done on a rotation basis. As long as one remain in the Top 20, that node will get the opportunity to produce the same number of blocks as everyone else. It matters none whether a node ranks #1 or #19. All block production will be the same unless the node misses blocks.
The remaining nodes are included on a rotation basis. Thus, even though they get less blocks, they are involved in the process. This is important for further decentralization.
Hive produces a block every 3 seconds. This is one of the faster times in blockchain. In addition, as of Hard Fork 26, the chain boasts one block irreversibility, meaning that transactions settle on average under 2 seconds. Nothing like this is seen in the financial arena.
Fork Of Steem
The Genesis block started in July 2016 under the name of Steem.
Hive came into existence as a fork of the Steem blockchain. The latter chain endured a money attack by Justin Sun who was able to gain control of the Witnesses by acquiring stake that was ninja-minded before the chain went live. This was a pre-mine that was used against the community, allowing Sun to establish sock puppets as block producers.
In response, certain developers decided to fork the code. This went live on March 20, 2020. All $STEEM holders were airdropped $HIVE on a 1:1 basis. The original pre-mine was moved to a DAO, called the Decentralized Hive Fund. This provides the community with resources that can be utilized to fund development and other projects that benefit the ecosystem.
The fork went back to the Genesis block, incorporating all data into Hive. Here we see a seamless continuation of the entire database, causing no disruption to users in this regard.
Applications had to decide which chain they supported. Many opted to move to Hive while some remained on both chains. Over time, Steem started to fade while Hive gained more attention.
Due to a few hard forks, the code bases are now completely different. Features were added to Hive which are not present on Steem. We also see a major difference in scalability as great efforts were put forth to ensure Hive could handle future growth in traffic.
As of December 15, 2022, work is being done on turning the Justin Sun attack into a film.
Any blockchain that has a decentralized node system qualifies as a decentralized database. This is all part of what many are calling distributed computing.
The major component in this is what can be stored in the database. With a proof-of-work (PoW) network such as Bitcoin, it is a ledger that resembles a bank. The database is nothing more than financial transactions, coins moved from one wallet to another. Blockchain was revolutionary in that it solved the double spend problem. Since the ledger is mirrored across many different unrelated nodes, it is considered a trusted system.
Hive offers this same capability. However, it does go one step further. Due to the social media aspect, the database provides permissionless text storage. Anyone is free to post whatever text content to the chain. This is based upon the blogging idea yet evolved over the years as developers created more applications.
It is in this regard that the data on Hive resembles that of Medium or Wordpress. As users post their articles, they are stored permanently on the blockchain, an immutable database.
The social media aspect of Hive also offers many features. People can vote on posts, helping to distribute the reward pool. Follow traditional social media models, users can comment on posts providing engage. This is also eligible for rewards if upvotes are given.
Any on-chain data is open for any application to use. Many front ends are similar since they draw upon the same information. This adds to the resiliency of the entire system. When we look at a social media platform such as Facebook, everything that is generated on there resides on Facebook's servers. Hence, the user interface and the back end are all controlled by that company.
Hive is different in the fact the front ends have no control over the data. While they will read and write to the blockchain, the Witnesses host the data. They run the servers separate from the front ends.
Blockchains received a great deal of attention due to their first major use case: cryptocurrency.
Hive is rather unique in that it runs two different coins simultaneously.
The first is $HIVE. This is the value capture coin that is native to the blockchain. It resides on the base layer and has no counterparty risk. Any activity concerning the coin is done through the hard coded wallet system.
$HIVE serves a variety of use cases. At the top of this list is the fact that it provides access to Hive. Users stake $HIVE, which becomes Hive Power. This is required to engage with the blockchain in any manner. If one does not have enough HP to perform a certain function, it is rejected.
This also is central in any governance. Those with stake are able to vote on different issues. Based upon one's holdings, a vote can be placed for Witnesses along with proposals submitted to the DHF for funding. Obviously, one's influence in these matters grows the more stake he or she has.
Due to is free floating nature, the price of $HIVE will fluctuate based upon the market. While markets are not perfect, the coin itself captures the value of the entire ecosystem.
The second coin is the Hive Backed Dollar (HBD). This is a stablecoin that is also resident at the base layer. Neither of these coins were created via a smart contract. They are contained in the code of the blockchain.
HBD is backed by $HIVE. Each coin can be converted to $1 worth of $HIVE through the conversion mechanism. This is where the blockchain can guarantee the value of the stablecoin. Of course, due to market trading, this may also fluctuate. The conversion process, however, is always available to people.
The stablecoin is also where Hive entered the fixed income market. If a user opts to place HBD into savings, a 20% APR is available. The payout can be claimed monthly. This is a rate that is set by the consensus of the Witnesses.
Steps were taken to ensure the value of HBD and protect it against attack. Since there is a correlation between HBD and $HIVE, in USD terms, a limit was placed upon the market cap of HBD in relation to the backing agent. This is the haircut rule and presently sits at 30%.
One of the core tenets of Web 3.0 is the idea that one truly owns his or her account. Traditional social media (or Web 2.0) is littered with stories where people had their accounts shuttered without notice. The release of Twitter notes by Elon Musk is showing how users were at the mercy of the company, often penalized for no infraction.
With Hive, one's account is in his or her full control. There is no company or authority with the ability to close an account. Engagement with the chain will occur as long as one has the private key along with enough resource credits to operate.
The idea of censorship resistant enters the picture here. Not only is the text placed on the blockchain immutable, but one's account cannot be cancelled or closed. This is a big step forward towards true account ownership.
Decentralized Hive Fund (DHF)
This is an important feature that was added during the hard fork split from Steem. The original pre-mine that was promised to the community as funding development never occurred on the other chain. As a result, it was weaponized against the community when the company holding the stake was sold.
Anyone associated with Hive is able to submit proposals to the fund. This is designed to provide financial resources to project teams that seek to advance Hive. Unlike many cryptocurrency projects which depend upon venture capital funding, Hive is self financing.
When a proposal is submitted, the community votes to see if it receives funding. The vote is based upon the stake one has. If the proposal receives enough staked weighted votes, then it will receive a daily payout of the funding. This will continue if the proposal remains above the funding threshold.
The first feature that stands out is the fact that wallet names are not a string of characters. Rather, when an account is established, it is named by the user. This is in alignment with social media as compared to a ledger. Over time, by interacting on-chain, people's digital identities start to emerge.
All transactions on Hive operate on a peer-to-peer basis. To transfer either of the coins, one simply enters the username of the other wallet and the coins are moved. This happens within a few seconds, with settlement occurring in a milliseconds.
Here is a list of a few options:
- Powering up of $HIVE to create Hive Power
- Powering down
- Moving HBD and $HIVE to savings
- Delegating Hive Power (and undelegating)
- Delegating Resource Credits (and undelegating)
- Claiming Rewards
- Swapping $HIVE for HBD on the Internal Exchange
Some of these features are dependent upon what the front end. Since these are all base layer functions, UIs have to option of what they show in their wallets.
This means that transacting in Hive can be viewed as an investment as compared to an expense.
Hive Power can be thought of as an access token. When one stakes $HIVE, this is converted into HP. Whatever HP is resident in one's wallet, that provides a certain amount of resource credits. Each activity on Hive requires a certain amount of RC to perform.
Some of the activities are:
- Voting on posts/comments
- Account creation
- Transferring coins
- Posting a blog/comment
- Delegating RC or HP
Each activity sees the use of RC. This depletes what is in one's account. However, there is a 20% regeneration daily. That means if one spent all resource credits, it would return to 100% in 5 days.
Hive is considered permissionless because anyone can push data to the blockchain as long as there are enough resource credits and one has access to the posting key.
This is one of the most important aspects to Hive.
There is a daily reward pool that is funded out of the inflation of the coin. This is meant to incentivize different behavior which benefits the ecosystem. Out of this daily inflation we see Witnesses paid for their block production, users rewarded for creating and curating content, and HP holders having their accounts adjusted to offset the expansion of the coins.
The reward pool is Hive's coin distribution mechanism. Each day, individuals receive rewards based upon the value tied to their activity on-chain. This is often measured by the total stake associated with the voting that takes place. After the 7 day voting window closes, one can claim his or her rewards.
This process utilizes the Proof-of-Brain PoB) mechanism. It is a system of voting based upon the total voting power, both direct and delegated, that each vote casts. Over the course of the voting window, rewards are adjusted based upon changes in voting power of each cast. Upon the close of that period, the total is locked in and payouts occur.
While there is a reward pool at the base layer, Hive also offers a similar feature with many layer 2 applications. By creating tokens on sidechains linked to Hive, and incorporating the PoB mechanism, many communities also reward content with their own token.
Most will follow the same voting window yet have different from Hive in terms of the staking/unstaking times. Hive utilizes a 13 week power down period to provide stability to the system and to deter outside attacks. Many projects opted for a shorter unstaking period on their tokens.
Web 3.0 Social Media Epicenter
Hive started as a blogging platform. The original intention was to have it as a place where long-form content could be posted and curated by a community of people. Since that time, developers took the vision even further.
Over the past few years, Hive witnessed the introduction of many different applications which, collectively, offer a nice plethora of social media offerings. There is the ability to create vlogs by posting video content. Microblogging recently started to get some attention. A content discovery application was just introduced.
All of this combines to offer content creators and social media fans a nice offering of useful tools.
This is also serving as a foundation for what is being called Web 3.0. On Hive, one can access all the applications via the same account. Unlike traditional social media where a new account is required for each platform, with Hive it is all the same. This means that ones list of followers is the same regardless of the application.
Fast And Feeless
Due to the resource credit system, Hive has no direct transaction fees. This allows for the community to promote it as feeless. The fast comes from the 3 second block time that is now augmented by one block irreversibility.
This can have a tremendous impact upon the world of finance. With irreversibility taking place in under 2 seconds, this means that Hive might be able to boast the fastest settlement time in the world.
Since the implementation of Hard Fork 26, Hive offered the ability to engage in resource credit delegation. This enables users to delegate the RCs while holding onto their Hive Power.
Podping is an application that is built on Hive, utilizing the feeless nature of the transactions. Since there is no need to pay transaction fees, a service such as this can operate.
Essentially, this service uses the blockchain to post updates of podcasting episodes. This allows podcasting applications to receive the updates without having to run servers to constantly scan different feeds. It all is contained in the Podping software.
This is quickly becoming a protocol for the industry to use. As of the end of 2022, 15% of all updates were done through this service.
Hive Power Up Day (HPUD)
HPUD is an event that is held the first of each month where Hive users stake their $HIVE into Hive Power (HP). It is meant to stress the importance of staking the base layer coin.
Adding to one's HP increases the voting weight on-chain, gives one more resource credits for engagement, and improves the curation rewards.
This inspired other events of similar nature such as LPUD by Leofinance.
Off-Chain Lite Accounts
This is a project that is being developed by the 3Speak team. The idea is to be able to post content in a decentralized manner, with full account ownership yet not going directly on-chain.
A great deal of content does not require immutability. Here is where the idea is to generate lite accounts, using Metamask to sign in, whereby the indexer is able to pull data from two different places and merge it together. This will be done on the front end to provide the user with a seamless experience.
Another database and node system is created off-chain, with the data being posted there. This enables the front ends to pull the data from both sources, reducing what is actually posted to the blockchain.
It is also technology that will allow for the creation of Hive proxy accounts.
This was announced in early 2023.
The feeless nature of the Hive blockchain means that micropayments are possible. This are transactions that are miniscule in amount. Often they are a fraction of a cent (or pence). Obviously, the traditional financial and monetary system really does not have a way to deal with this since the currencies do not reach that level of denomination. Here is where cryptocurrency can alter things.
When a currency can be broken into much smaller fragments, the ability to transfer this then depends upon the network. Those blockchains with high transaction fees will not be able to engage in micropayments.
This is an area that could really evolve into a significant part of transactions. When we look at things such as infrastructure and royalty payments, we see how this could revolutionize the approach people take towards compensation packages as an example.
- Peakd - Website
- 3Speak - Website
- Leofinance - Website
- CTP Talk
- Veews - Website
- Splinterlands - Website
- Hiveblocks - Website
- Keychain - Website
- Cast Garden
- Hive Glossary
- Hive Crypto Guide
- List Of Blockchain & Cryptocurrency Terms
- A Users View of What is Hive
- What is Hive and How Does it Work? A beginner's Guide
- What is Hive? What Did I Find There?
- Blocktivity Website
- Steem White Paper
Posted Using LeoFinance Beta