There are some things that have an enormous impact.
For the last few years, we discussed the technology behind Hive. The core development team has done a terrific job scaling the chain while also providing some basic features which makes Hive stand out.
Of course, this has not translated into users or even developers. Things are still operating at a trickle.
For the moment, that is not a problem in my view. We still have a lot of things we need put into place. One of them we covered repeatedly, smart contracts. This was a major hole in the Hive ocean liners, and a huge one at that.
We do have some teams taking different approaches there. One that I watched is VSC. This is really making strides and a few of the X (tweets) really capture where things are going.
Hive As A Transaction Settlement Layer
We all know how other chains can be frustrating with transaction fees. In a world of financial transactions, this is not catastrophic. People are accustomed to transaction fees when engaging in many financial services. Of course, when sending money (or transferring assets) there are also fees tied to it.
An example is the title to a car. Try to transfer that to someone else and see what it costs. This is likely over $100 in the simplest of casts.
With blockchains like Bitcoin and Ethereum, we see the same thing. Fees can get up there to the point where moving things around become impossible. While most focus upon the cost of send BTC or ETH, there are other aspects to this.
With Hive, we have a feeless system. The cost to settle on this blockchain only requires Resource Credits (RC). That means anyone (or any Node) that wants to transact just needs enough HIVE powered up to write to the chain.
It is that simple. Of course, the benefit is we are not dealing with a one off situation. RC recharges each day meaning that what was used yesterday will be "returned" today. A good way to think about this is a battery. You use your phone throughout the day, recharge it at night, and you have juice in the morning.
The key is VSC is setting up an expandable node system which will allow the scaling of the smart contracts. By utilizing this approach, we are seeing a decentralized node system that does not require each to run every contract. Node operators can choose what contracts they run.
What this means is there is no honeypot of the funds. A honeypot is a wallet that contains the money tied to a particular system. By distributing the transactions, contracts, and collateral among many different nodes, there is no single point of vulnerability.
This means that Hive can operate at the settlement layer for bitcoin. It is the Lightning Network in action. That said, payments are just the beginning.
Fortunately, there are a couple of other possibilities that become evident.
Finance And Gaming
The first thing which pops out is why is this limited to bitcoin? It isn't.
We can see these contracts expanded to offer the same service for any coin. Bitcoin is not the only network with high fees. In fact, it does not just have to be expensive. For those doing a lot of moving around on BSC, even 25 cent transactions can add up as you will see in a second.
Another idea that comes to mind is a financial network. We discussed this a great deal regarding Hive. Why not for other assets? How about Bitcoin Bonds? These could be developed on this network. Want to create something similar to a decentralized mutual fund with Synthetic Assets? No problem.
Basically, once the infrastructure is in place, developers can create whatever they want using the technology. The benefit to Hive is that it becomes the settlement layer.
As much as we know finance is huge, gaming is no slouch either. There is something that stands out which is worthy of note.
On the last tweet it mentions a NFT contract.
We just mentioned the idea of a 25 cent transaction fee adding up. With fungible tokens, you have to be doing some serious moving around of funds. This all changes with NFTs. While that amount isn't much, what if you have 5,000 NFTs? Trying moving those on Ethereum.
There are many instances where people decided to leave a game yet were only able to liquidate a few of their NFTs. The reason is the transaction fees. In this instance, they were relegated to selling their highest priced NFTs since the others simply were not worth it.
VSC can eliminate this. Once the NFTs are set up using that protocol, the ability to move them around becomes like any other transaction.
This is important when dealing with the DEX, which also has a contract.
We are looking at the ability to create tokens (both fungible and NFTs) along with the DEX to trade them.
One is of little good without the other.
Hive Backed Dollar( HBD)
What gets exciting is this is a Hive Backed Dollar (HBD) based system. There are a couple things regarding this which are important.
The first is in staking. This will use HBD as a staking mechanism to cover the "transaction fees". It is similar to the Hive Power concept. By utilizing the return from savings, fees can be paid out to the specific node operators actually processing the transactions. On Hive, individual accounts stake HIVE and are able to write to the chain through the resource credits. This is no different.
Another piece is the fact there is now a stablecoin native to VSC. By piggybacking off HBD, any service can utilize this for payments. To me, the potential use case for this coin will explode. Consider the DEX having HBD as the default pair on all tokens created on there. Certainly, other tokens will be used but it is a way to insert HBD into the center of the system.
As more advanced services are built out, they can also utilize this. How about a lending platform that collateralizes assets in return for a loan. What is the payment on the loan made in? HBD.
In Conclusion
It is evident by the interaction from the VSC team that things are getting closer with this project.
To me, this will be a major addition to Hive, checking a number of boxes. Quite frankly, the value it will provide cannot be calculated. Just one of these ideas taking off will load the system. Having millions of dollars in transactions occurring each day through smart contracts is not a big number. To achieve this, we are looking at millions of HBD being staked to the system.
This is what smart contracts offer an ecosystem like Hive. Having a robust system where developers can create what they need will push things to a level not seen with this blockchain. Using Hive as a settlement layer essentially means that it can become the transfer system for man other chains that depend upon high fees.
We cannot underestimate the concept of feeless. It is a difference maker.
Posted Using InLeo Alpha