Hive: A Resource Credit Crunch In 2021-2022

The comes a time with technology when things start to take off. After enough is developed, suddenly a point is reached where the heavy artillery comes out.

Many have wondered what the use case for HIVE is. At the most basic level, is it what allows for activity to take place on the blockchain. Ultimately, it all comes down to Resource Credits. One needs a certain amount of resource credits to be able to transact. This is acquired by powering up HIVE.

The more Hive Power one has, the more Resources Credits allocated to that account.

Many have heard that Hive is "fast and fee-less". It is the Resource Credit system that enables transactions to be fee-less. Notice it does not say "free". The transactions are not free. They are built into the system whereby one needs enough stake to warrant that activity.

Resource Credits operate like voting power. Nothing is actually removed from one's account, in terms of HIVE, and it does recharge throughout the day. Thus, to the user, there is no direct fees for transacting.

Up until this point, there is nothing, as a whole, to worry about regarding Resource Credits. There are plenty around as denoted by the liquid HIVE available.

According to Hiveblocks, here is what the present Hive distribution looks like.

hive.png

hive.png

If we include the HIVE that is locked up in the Proposal Fund, we see there is about 160 million HIVE. For the present activity, that is a ton of Resource Credits available.

The question is will that always be the case? My view is thing will be changing quickly as some of the heavy artillery is rolled out.

Here is what we see coming.

Hive DeFi

@blocktrades mentioned on the last developer call about setting up Smart Contract servers. At the same time, Hive-Engine is working on providing standardized smart contracts on its platform to enable developers to instantly be able to select the contracts they want to use and rapidly implement it into their development.

Whatever system is brought into existence, the key is that, on the second layer, there is smart contract capability on Hive. This is a big step forward since we see how valuable that has been to a chain like Ethereum.

One of the biggest benefits to this is it allows for Hive to insert itself, in a fairly significant way, into the DeFi game. A big drawback to DeFi on Ethereum is the transaction costs. When the blockchain gets busy, the fees skyrocket. To the larger players, this is not much of a concern. It does, however, exclude a lot of smaller ones since the numbers simply do not work out.

EOS and TRON are trying to take advantage of this. Both are starting to see DeFi projects offered on their platforms. Hive could also insert itself in the game by having the ability to set similar things up on here.

This is where the fee-less transactions come into play. People will be able to trade on DeFi platform to their hearts content. As long as the Resource Credits are there, one can perform the operations. At the same time, the way DeFi works, is HIVE will end up being locked up in liquidity pools.

Leo Microblogging

This is a feature that is going to be rolled out in V3 of the Leofinance interface. With all the negative attention given to cryptocurrency by the traditional social media sites, it is becoming a bigger risk to interact on there. Accounts are being banned all the time for discussing cryptocurrency.

We saw each of the Big Three go through their cycles. For this reason, a feature is being set up which will allow all people involved in crypto a place to share their thoughts in a short, concise way. This will actually be tied into the larger platform, being just one option that is being offered to users.

What is applicable to this discussion is the fact that people tend to send out many microblog posts a day. They also forward them, upvote, and make comments. In other words, they will require a fair bit more Resource Credits than the average "posts once a day and add a few upvotes" person.

Since the project has not been fully announced, some more applicable points are being omitted until it is made public.

3Speak

This one will not receive a lot of detail since I will probably do a more in depth post about this shortly. To be honest, I want to go through the audio again since there was so much there.

Let us just say that 3Speak is working on an upgrade to their platform that could change video social media as we know it. With all the censorship that is taking place, it is becoming an issue on the minds of a lot of people. For this reason, the upgrade starts with decentralizing video storage.

Hence we are going to see a situation similar to SIA. This will be available to Hive users to start. They will have the opportunity to use their excess hard drive space to house video content. Of course, in return for that service, they will be compensated.

At the same time, the platform is going to be able to incorporate all video platforms. Thus, one is able to use things such as Lbry along with this system.

The key is that content creators will not only be able to protect their content, but also tokenize their communities. Another feature is, eventually, the community members themselves could be incentivized to host the content creators videos. Thus, that community becomes it own economy.

If one wants to listen to the audio about this, here is the link:

https://peakd.com/hive-181335/@theycallmedan/hfjjxupc

None of these features focuses upon bloggers. Each is catering to larger communities, ones that are showing how much interest there is. Naturally, the job is going to turn that interest Hive's way. However, with all that is taking place, these opportunities provide Hive with some of the tools to make a push.

While 160 million tokens on the open market sounds like a lot, it really is not. Many will say it is impossible for Hive to get to the point where there is a crunch if Resource Credits. I recall this same conversation about Leo and that it was impossible for it to run into liquidity issues, yet here we are.

As we can see, a bit of activity really changes the sentiment quickly. The online world is full of people who love to interact. Facebook, YouTube, and Twitter all leveraged that to their own benefit.

We are starting to see the tools appear that will enable Hive to really push forward. All that is cited here was mentioned publicly. At the same time, it is by teams (individuals) who have a history of getting things done.

Thus, I feel confident in saying that, over the next year or so, we will see things changing to the degree where Resource Credits become scarcer. This means that people will have to pay up to get them. Since HIVE converted into Hive Power is the only way to generate Resource Credits, it is easy to guess where that impact will be felt.


If you found this article informative, please give an upvote and rehive.

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Bang, I did it again... I just rehived your post!
Week 30 of my contest just started...you can now check the winners of the previous week!
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So technically with having hive automatically Makes you own resource credits which can help one navigate the chain. Truth is, resources credit is then technically feeless since you're automatically owning it with hive. I believe DeFi would have been flawless with a concept as resource credit and all and this is one aspect of hive I'm always grateful for.

As for 3speak I would love to see those lovely little things they do, Dan has got a lot of ideas and stakerz and the rest team too are brilliant people. I would love to see them come up with something that makes 3speak attractive again for adoption

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Correct. Owning Hive and powering it up automatically provides Resource Credits. It is what allows everyone to be active on Hive. Those who only have a few HP realize they ran out of RC if they try to do too much.

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Since HIVE converted into Hive Power is the only way to generate Resource Credits, it is easy to guess where that impact will be felt.

I love this and believe it is needed. Needless to say more about it, we all know what it means. Thanks for keeping us updated, I really appreciate it.

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You pointed out three directions which enrich HIVE each and every day or could do that in the future - DeFi. There are many features from tribes that could be simply scaled up to Hive and make it thrive like a monster it is. But somebody needs to take initiative and I think others will follow.

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That is key @behiver. I only pointed out a few projects. We obviously are seeing some initiatives that are outside what is listed here. It is good to see it moving forward.

The reality is that Hive's success depends upon a lot of projects succeeding. This will really increase the value.

I just read how STEMGeeks just did a rather large token burn. It is great to see that project getting some movement. I look forward to see what they are doing since they hold great promise in my opinion.

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@taskmaster4450 this is a really good post man! You actually have me less bearish on Hive price now (which doesn't bode well for my bet with @edicted) and sounds like I should be leverage 3speak, there is opportunity there for content creators with followings that are growing. Thanks!

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Yeah I am going to put together a deeper post on what 3Speak is doing. The post that Dan put up is packed full of information. So I want to spend some time really going through the points. It is a really important platform they are creating.

I am glad I could perk you up a bit my friend. Ethereum is a near $50 billion chain, and likely going higher.

There is no reason that I see why Hive cannot be a $3-$4 billion chain.

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(Edited)

The fees are one of the main reason all these new ERC-20 tokens actually add value to the ETH market cap, it keeps a steady pace of demand for the main fabric coin. With HIVE not having any fees, will things built on top of HIVE truly add enough value to counteract any value that they might pull from the project? I actually just posted about that today :)

https://hive.blog/hive-167922/@jrcornel/what-is-going-to-drive-demand-for-hive

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Fee-less is not free.

The fact is that people need those RCs to interact to avoid the "fees". This is how we pay out fees.

If Hive got a small amount of that same type of traffic as Ethereum, in terms of DeFi, the thirst for HIVE would increase a substantial amount.

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Well sure, and if HIVE got the same amount of money invested in it as BTC, it would have a tremendous market cap! :) Tongue and cheek I know, but how are we going to bring that level of defi interest here? Just because you build the defi product doesn't mean anyone will use it. I've seen plenty of defi pools with no volume, in fact that is pretty much the norm.

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I think yes, because users still need to stake a little bit of HIVE to gain resource credits in order to interact with second layer tokens and smart contracts.

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Leo Microblogging

That will be a nice addition.

When I see number of users twitter have, 400 million+ Hive also look tiny amount. A better RC estimation tool is needed so that Hive can onboard millions of users.

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I didn't know about the developments with 3Speak looking to become more decentralised, that's pretty cool!

Another good thing about resource credits is that it also ties in with account creation - which may be significant when more people want to get on to use HIVE powered dapps. If you have enough HP, you can create account tokens which you can use when you bring people on board if there's a struggle during peak times. Seem to remember when I first started that I had to wait 3 weeks for an account on STEEM which seemed a bit silly given that you can just sign up instantly elsewhere.

Probably digressed a bit but there's a lot of ground work being put in to be ready when we get to the point of more users.

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A very good point. Account creation is one part of the process that is going to be vital to those who own the platforms that are created.

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Lots to get excited about. I expect to hear some incredulity from newcomers, at some point, that Hive was ever available at 10c.

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This means that people will have to pay up to get them. Since HIVE converted into Hive Power is the only way to generate Resource Credits, it is easy to guess where that impact will be felt.

You're celebrating this as if it's new and revolutionary. It's exactly the same old system which DID NOT do much for steemit. A previous post from you shows that this system does not convert ENTRY USERS into BUYS.

IMG_20201102_124133.jpg

That is a slice of the main chart but the only portion I use and need to determine how well a system is at converting traffic into token price. So then.... the hard truth is... the system is working against itself. Because though a million plus have come through the door, the system was only able to sustain a tenth of that, and worse (since this is a money game) it's only convinced a small group of crypto die hards to buy big.

Coincidentally, the recent report from pablopenguin shows that some of those die hards themselves, have decided to power down. Likely because they want to get on the BTC boat.

My point here is not that the RC System is flawed. My point is that thinking that IT will change the price of the token is.

So then what's the remedy?
I make this point often.

ATTENTION RETENTION.

That the system first needs to build its audience.. BIGLY. These platforms also must understand that "poor people" is going to be their main audience for those early stages. Likely also going to be the bulk.. always. So really, making it easier for those users to stay and feel welcomed is what the system should be.

For example as a new user, you can't even make a community. As a new users, you're literally a nobody. The platform promised rewards, but once here users quickly realise that they need to pay2play and most certainly pay2win. So again by design, the system destroys it's ability to retain that audience and by that kills the likelihood of projects taking off that actually need a large audience. Which is why so many relatively good ideas like quello (mimicking quora) fail, because not a big enough audience to generate activity.

As it stands the only 2 tribes people see as successful here as Splinter and LEO. Personally I only see LEO as the sole success story because that splinter is more about extracting wealth then actually granting it as an opportunity.

LEO exists as a gem because:

1). It's about crypto in the world of crypto (so its audience is already here and the wider audience of blockchain exist as potential).
2). They've identified that ALL users should feel welcomed and have granted many a true ability to be winners.
3). They've realised where the system is working and improved it (UI, Onboarding), or where the system was failing, and changed it (rewards curve, comment engagement).

With that, their recent report shows that their user growth, retainment, attention, content, rewards spread.. are all healthy.

There's no speculation there of "because of this, we will moon." Their efforts are focused on building and then reflecting on the incremental benefits.

I simply have not seen that with Hive.

Anyway I think you do great work for maintaining morale, but it's often on future (hasn't happened) maybes. Personally I don't see that video from 3Speak positively. They want to give an option that ONLY makes sense when a very large audience is aware of 3Speak.

Repeating the same mistakes of steemit.

Cart before the horse.

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I think those who were lucky enough to claim account creation tokens realy hit a jackpot. A fast growing social media chain could be having 1 million new accounts created per day. Correct me if I'm wrong; if you pay 3 Hive to make an account that fee is burnt. That's even less supply to satisfy the Hive demand. Those who had more than enough RC will be basically mining accounts for extra passive income.

I'm a big fan of this overall trend of HODL for rewards/services instead of paying someone fees for something. Crypto.com VISA card actually gives 8% cashback on your purchases if you stake $180,012.50 worth CRO (their equivalent of Hive) There's even a DeFi platform. Imagine https://hivepay.io could expand beyond merchants and 171 fiat currencies and go straight for a crypto debit card. Possibilities are huuuge for Hive.

https://leofinance.io/hive-167922/@d-zero/would-you-like-to-get-paid-usd8-for-every-usd100-you-spend-by-having-usd180-012-50-in-the-bank

I have ZERO worries about Hive price for future. I beleive Hive could go up X1000 (A Mere $118 per Hive) That's still less than current marketcap of ETH. Based on @coingecko stats ETH is 50 billion USD marketcap. $118 Hive would be 43.8 billion USD.

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How much useful information did you give in this post.

I missed Dan's post and now I'm going to read it to get some more details on the development of the 3speak platform

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On the one hand, it will mean a price jump if demand jumps.

On the other hand, it creates a barrier to entry if costs are too high.

On the other other hand, our platform is ad-free, subscription-free, and offers the regenerating RC once an account is in place, and content creators get rewarded with more RC.

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