What Is Hive Blockchain? A Comprehensive Guide
By Nerly Shammah Sep 17, 2022
To learn about the decentralized web 3 social media visit this comprehensive introduction to hive blog, this post is much focused on the underlying technology that powers the ecosystem, the hive blockchain.
What Is Hive Blockchain?
The hive blockchain is a powerful technology built for web 3, unlike regular blockchains, hive is fast, scalable, and powerful. Hive was created as a community fork of a hostile chain, making it a community-run project with over 126 decentralized applications(DApps) and communities.
- Hive is a decentralized and open-source cryptocurrency and blockchain project, created by the community as a resistance to the censorship of the parent chain.
- Hive is a fork of the steemit blockchain, it has outgrown its parent chain in terms of development.
- Hive is a fee-less chain with 3 seconds transaction time, making it free and one of the fastest blockchains.
- Hive is robust, developers can build on hive without worrying about security or scalability.
- Hive assets include Hive Coin and Hive-Backed Dollar, an algorithm stablecoin built to reward creators while also serving as a funding currency for the ecosystem.
Understanding Hive Blockchain
Hive is a decentralized blockchain with built-in functionalities that ensures the ecosystem is best accommodating to builders or developers, content creators, consumers, and investors. Achieving data accessibility with front-ends, Myriad dapps, and APIs, Hive identifies itself as a scalable ecosystem designed for the future and a pacesetter for web 3.
Hive is built on delegated proof of stake consensus mechanism, allowing its users to enjoy the ecosystem as the first successful censorship resistance and scalable network, governed by the community via a voting-base system that fuels its economy.
Hive blockchain supports content creators via time-based monetization of content where users are rewarded in hive coins, the native currency of the network.
As aforementioned, Hive was created as a community-driven fork of a burdensome parent network, the steemit blockchain. Since its inception, Hive has realized great growth in userbase expansion, developers, and inevitably, projects built on the network are in numbers.
What Is Hive Coin? HBD? - Understanding Hive Assets
The Hive ecosystem and economy are based on and governed by hive coin, a cryptocurrency with diverse utility structures including governance participation which requires the coin to be staked to the network as “Hive Power”(more on that later).
Additionally, hive coin is a reward token for content creators, curators, stakeholders, witnesses, and the Decentralized Hive Fund(DHF), with asset allocation following 65%, 15%, 10%, and 10%, respectively to the aforementioned categories.
That said, Hive-Backed Dollar(HBD) is an algorithm stablecoin that serves as a reward currency alongside the Hive coin. HBD is designed to maintain a value of $1 while tracking Hive coin as the backed asset for value redemption. Simply, like most algorithm stablecoins, HBD can be redeemed for $1 of Hive coin and vice versa.
What Makes Hive Feeless? - Resource Credit Explained
Resource credit is a rechargeable fee structure on the hive blockchain. Unlike other networks where a user has to spend a portion of their balance to foot the transaction cost, on hive, resource credit is consumed for a transaction to be processed.
How Does Resource Credit Work?
Typically, when an account is created on the Hive blockchain, a limited amount of resource credit is assigned to it, this ensures that right about anyone can utilize the network on the go without investment. These resources are not exactly visible like coins or tokens in a wallet, however, they are tied to an accounts stake, which is typically locked up hive coins.
That said, the network is designed in a way that relative to a user’s stake, a proportionate amount of bandwidth or resource credit is available for use. This incentives users to hold more hive coins in other to transact more.
It is relatively impossible to run out of resource credit once a certain amount of staked hive is acquired.
Note: It is not a requirement for one to buy or hold hive to transact on the blockchain, a newly created account can still transact on the network but with limitations. Typically, an account with 0 hive stake can make about 17 transactions on the chain.
Now, there are a few things to note, resources can run out, even for accounts with staked hive if the staked amount is low. However, remember that they are rechargeable, thus one can continue transacting the next day. The resource credit recharges at the rate of 20% a day if entirely used up.
Hive Governance - Understanding Delegated Proof of Stake(DPoS) and Hive Power
Bitcoin uses proof of work(PoW) for its consensus, this keeps the network in check based on security measures, however, PoW as with the case of bitcoin makes the currency irrelevant in governance, giving voting rights to miners based on hash rates.
On Hive, things are a bit different, in a way that gives the ecosystem more flexibility in not only how it is governed but also in how it can scale seamlessly.
Delegated Proof of Stake(DPoS) is considered a democratic consensus mechanism. It brings to light the economical value of proof of stake while getting rid of its slightly centralized nature.
Simply, DPoS does not require a witness, who is a representative to users of the ecosystem, one that validates transactions and keeps the network secure much like miners, to hold a massive stake or hash rate as with PoW to join in block verification.
Delegated Proof of Stake is a vote-based governance framework for blockchains, whereas witnesses are elected via community voting while holding rights to do so, typically while holding the network assets like hive coin.
This brings us to “Hive Power” a staked form of hive. Hive has quite the utilities built around it, in its different forms it can be used valuably. That said, Hive Power, most commonly called “HP” is what hive coins are called when locked up.
Locking up hive, or as it is called on the network: powering up hive, gives one the right to participate in governance which includes voting for witnesses and also voting for proposals to receive funding from the Decentralized Hive Fund(DHF) on the hive blockchain.
That said, a locked or powered-up hive can be unlocked or powered down at will, either fully or partially. It takes 13 weeks for all assets to return to liquid form, however, segments of the total sum unlocked become liquid every 7 days until all is retrieved.
Staked hive never leaves a user's account, it just changes form and unlocks other abilities on the network.
Considering the nature of the hive blockchain where "resource credits are required for users to perform transactions on the network, some may run out and thus would no longer be able to carry out activities.
Currently, there is an option to buy hive and power up to gain more resources or just wait for it to recharge. However, if an individual will have to do more than an average transaction, delegations can be offered to them where they can't afford it.
Delegations are typically hive power(HP) sent from one account to another. For hive to be delegated, it must first be powered up, or locked up. Basically, when HP is delegated to a user, the sender losses a couple of things that come with having hive staked and that is "curation value" and "resource credit".
That means the receiver gets to use those resources while not actually having any extra hive in the wallet he/she controls. Delegations don't exactly leave the senders' wallets, only the resources do.
Hive Keys - What are the different sets of hive keys?
There are different keys on hive, all serving a different purpose and ultimately making accounts more secure. These keys include:
Owner Key: The owner key can typically change the ownership of an account as it is used for regenerating other key sets thus setting a new password, recovering accounts can also be processed with this key.
Active Key: The active is the transaction key, this enables any account to transact on the chain. Typically, when an account is signed in with its associated active key, it can perform transactions such as transfers, voting for witnesses, and even approving DHF proposals.
Posting Key: Posting Keys are typically used to publish textual files to the chain, that is, posts and comments. An account cannot do so if not logged in with its associated posting keys.
Memo Key: Used for decrypting encrypted messages within the memo parameter of fund transfers.
Signing Keys: These keys are created by witness accounts to indicate that a witness is available for block production or verification of transactions. This key is unique to that witness and can also be used to show its unavailability or discontinuity of block production.
Where To Buy Hive?
You can buy hive on the largest cryptocurrency exchange Binance using different payment methods and even with Bitcoin or USDT.
To learn how to earn hive for free, see this post to get started.
Want to learn more about hive? see their official website hive.io