2022: Hive Forecast
We are closing out the year known as 2021. Now it is time to turn our focus to the year ahead. With so much happening, where will our ecosystem be in a year. Here we will attempt to uncover come possibilities.
This article is not going to focus upon price since markets will do as they wish. That said, it is safe to say we should see higher levels in the price of HIVE. Of course, a bear market could trump whatever development takes place.
Instead, we will concentrate our efforts on some of the projects we know are on tap and how they will impact things.
This past year provided a bit of a glimpse into what can happen on Hive. The success of Splinterlands really emphasized how Hive works. This is something to keep in mind as we go forward.
Now let us look at the year ahead.
HIVE Will Become Scarce
This is an idea which is hard to see at the moment since there is so much floating on the exchanges. However, when you think about it, we really should be powering up all the HIVE we can.
The reason for this is due to the utility of the token. What does HIVE create? For the answer we have to look at the basic fundamentals of the chain.
HP power produces:
- Resource Credits
- Account Claiming
Splinterlands showed what can happen when hundreds of thousands of accounts are added. What happens if this moves into the millions? Quite simply, there are not enough accounts.
Fortunately, as time passes, more accounts can be claimed. This, however, is not at a pace necessary to keep up with potential demand.
One of the first tests could be when #projectblank rolls out. If this can see the light of day by the end of the first quarter, it will have the opportunity to top the 2021 sign ups by Splinterlands. Couple this with other possible breakthroughs as well as the ongoing success of that game and we can see how an issue arises.
Once they are signed up, we know Resource Credits are required to engage on-chain. While the system is being changed, the bottom line is Resource Credits are created by Hive Power. As more HIVE is powered up, the greater the total amount of Resource Credits available. This, of course, expands the amount of activity that can occur.
The growth of Hive in 2021 was terrific. If this is duplicated again, we might find ourselves in the situation where there is a scarcity of HIVE.
Hive Backed Dollar (HBD) Will Become A Centerpiece
Here is another area that we saw a major breakthrough in 2021. After being basically ignored for the last half decade, attention was finally paid to the chain's stablecoin.
Because of the actions taken, we enter 2022 with HBD starting to take form. Granted, there is still a lot of work to do yet we are heading in the right direction.
Here again, we can see scarcity becoming an issue. Fortunately, there are options with this token as compared to HIVE. The latter has a set distribution (inflation) rate that should never be changed. We risk too much of a loss of credibility if that were to happen. Instead, we need to focus upon the amount of HBD that is generated.
One of the other utilities of HIVE is that is can be converted to HBD. The challenge here is for each HIVE that is converted, that cannot be powered up to help generate accounts nor provide Resource Credits. It also could potentially take away from the market cap which affects HBD.
An increasing market cap of HIVE enables for more HBD to be created. This is going to help as people start to make this the centerpiece of their activities on Hive. At present, we have the savings account paying 12%. It is a number that can be adjusted by the Witnesses.
While this is advantageous to individual users, it is a major innovation for games and applications. They can utilize the savings as an income producer to reward their users. It is easy to see how some communities might start depositing HBD into savings and start to use the proceeds for contests and things of that nature. Here again, creativity and innovation are going to generate use cases.
Ultimately, we will see HBD become a payment token in 2022. This is something that might take until the second half of the year as more work is required to tighten the peg. Either way, the stable-ish coin should become stable.
Development Will Accelerate
One of the overlooked developed is the Hive Application Framework (HAF). This is something that gets a bit technical for most of us yet can provide huge opportunities to developers.
An issue with blockchain is that most upgrades can only come via Hard Fork. While this is not a problem from a development standpoint, it affects the frequency they can be done. Since exchanges have to shut down transactions, it is causes a lot of disruption. For this reason, we see perhaps two Hard Forks per year.
The HAF will allow for updates with greater frequency. Since applications are going to engage via this mechanism, any changes to the HAF are instantly available. Obviously, areas such as governance are still going to be at the core layer but this will help to alleviate some of the issues with developers who are not blockchain experts.
Here we should see the interest of developers increase. There are a lot of people out there who understand Java, Python, and other programming languages, The ones who know Solidity, for example, are much fewer in number. This causes delays in expansion and development.
HAF enables any developer to operate as long as he or she knows how to interact with databases (which they all do). We can see how this can open the door to more development by appealing to a wider range of application developers.
Naturally, this can feed into the first two forecasts made. As the number of applications increases, there is the potential for more users to get involved. This will only enhance the need for both HIVE and HBD for the reasons mentioned above.
Smart Contract Capabilities
This is an area that was lacking on Hive for the last few years. Actually, it was the case since the beginning but over the last couple years we realized how important it is to have this functionality. Hive-Engine was the first to start bringing this to the chain. Now we see more taking place.
By the end of 2022, we will likely see another few platforms that have smart contract capabilities. This is going to include the team from @dlux-io and perhaps Blocktrades. We are going to see the emergence of SpkNetwork during the year which will also aid in this effort, albeit not directly to start.
Having this will open up a host of possibilities. We are going to see more Decentralized Finance (DeFi) applications built along with NFTs. Hive is off to a good start in both these areas.
Decentralized Autonomous Organization (DAO)
This is the final thought as we head into the new year. The last couple years saw the emergence of DeFi in 2020 and NFTs in 2021. My guess is 2022 is going to see DAOs really start to take off.
What is happening in the rest of the cryptocurrency world will be occurring on Hive. There is already the Decentralized Hive Fund (DHF) which is a DAO at the base layer. We will see this idea expand over the next 12 months.
Do not be surprised if there are some people on Hive who create outside projects that utilize the DAO business structure. Through the layer 2 token creation mechanism, we will see these funded and operated. Experimentation with governance systems will take place, hopefully moving the entire concept forward.
Many entrepreneurs are going to start seeing the value of this and toy with the concept. Hive will have a few set up by the end of the year.
So what are your thoughts? Do you see these forecasts taking place? What are some that you believe will happen?
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