The answer to this question is going to depend upon what is built on top of it. For now, we are speculation due to the fact that Hive still lacks a robust smart contract platform that is accessible by any developer. That means we are handicapped when it comes to the conversation.
However, that is not always going to be the case. We know there are a couple projects working on bringing that to light. This brings the conversation back to technology.
Yesterday, we discussed how this is a field where Winner Takes Most. This is going to become a crucial concept within cryptocurrency. It is also a huge topic of conversation when dealing at the blockchain level.
Many over look the power of the networks we discuss on a regular basis. Whether it is from a data storage or scaling standpoint, both has to be addressed.
In this article we will discuss key points that could make Hive one of the leading blockchains.
Scalability And Smart Contracts
Here is where things get instantly cloudy.
When it comes to smart contracts, the two leading blockchains have issues. With Bitcoin, as of now, there are no smart contracts available. This might be added at a later date as the taproot upgrade supposedly allowed for it. However, at this time, we have no idea if there are plans to make that go live.
Ethereum, which is the leading smart contract chain, has them all resident at the base layer. This is something that was discussed at length with Hive and the decision is not to have them at that layer. Instead, smart contracts will reside on a sidechain, using Hive as the settlement layer.
This allows for a great deal more scalability. We know both Bitcoin and Ethereum have issues here. Another project is having the smart contracts at the base layer means all data is on each node. This can get cumbersome quickly.
With Hive, that is not the case. Even with a project like VSC, the idea is that only a certain number of nodes will house each contract. This allows for horizontal scaling since nodes can be added to facilitate more contracts.
This is going to be something that is imperative to watch. How this gets resolved could be the standard by which the industry moves forward.
Data Center
A network like Hive is a data center for text. We can post whatever is desired on chain, exercising the immutable nature of the database. This is dependent only upon the resource credits someone has to operate.
Decentralized data is something that is often discussed yet we do not see it taking place. Where is it happening? We know traditional companies, especially social media has nothing of the sort. In fact, they have no interest.
At the same time, immutability is non-existent. We see the issue where accounts are controlled by those same entities. Even something like International Movie Database (IMDB) is prostituted since Amazon purchased it. The ratings cannot be trusted as the company caters to its own shows and films.
Decentralization solves this. Imagine a database similar to this on Hive. Then all votes could be recorded via on chain polling, to truly resolve whether something was gamified.
It is important to house both data and transactions. Bitcoin is an immutable database of financial transactions yet has no other data for the most post. Ethereum allows for this but, in addition to scaling, is being questioned about centralization. We will see how this unfolds in the long run.
Social Media
We discussed the merging of social media and finance a great deal. This, to me, is the golden goose. When it comes to Web 3.0, here is where I see the major difference. Web 2.0 is powerful in the siloes that were built by the likes of Facebook and Twitter. However, when we look at a new paradigm, we see Hive having a couple advantages.
The fact there are no direct transaction fees is beyond description. This is one of the most overlooked factors of Hive. Other projects can construct something using a blockchain with fees if it does most of the activity off chain. This might be a viable solution but at the expense of decentralization.
From a financial perspective, there is a factor to consider. The one block irreversibility means that almost all transactions on Hive are fully settled in under 2 seconds. Consider what this means in the future. When coupled with smart contract technology, we could see synthetic assets created. Take a look at the stock market. It takes 2-3 days for a stock transaction to fully settle. With Hive, this could be done in a matter of seconds.
It radically changes the payment system. Here we have the ability to offer feeless accounts to merchants with instant, irreversible settlements. That is something the existing financial system does not have, nor will it. With so many gatekeepers involved, it is impossible for them to eliminate the times. Each layer has its own procedure for settling. Operate internationally, and we can be talking weeks.
All of this requires scaling. It reverts back to what we started with. While other blockchains are dealing with issues already. Hive handled 4 million per day without issue. We are certain the level is much higher with focus still being given to that.
In Conclusion
When it comes to technology, Hive matches up well. While it is true the best technology does not always win, when it is the plumbing, i.e. infrastructure, it is crucial. It is hard to be the winning technology when the foundation is lacking, especially in the digital realm.
Does this mean Hive will stand out? Not necessarily. We have to keep in mind a lot of the success is going to depend upon what is built at the second layer. The projects that attract users are vital. If something does go viral and get a lot of sign ups, it has a chance. However, if things remain hidden, then we are going be in for a long slog.
If we take this from the bottom up, we can see how things are starting to fall into place. While many are working on their applications, many others are tending to the infrastructure issues.
When this is complete, we will see what we have. To me, the potential is there to make a big statement within this industry.
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