We have base layer development and then there is what is happening with the applications. While the latter gets a lot of attention, the former is vital to the future of Hive.
It is easy to over look what is being done to the blockchain. After all, this is rather slow moving, kind of like watching a glacier move. People being what they are, we would rather watch a speedboat.
Nevertheless, it is important to stress what is taking place at that level to remind ourselves how strong the foundation is.
The core software that is run on the network of nodes is vital to all else that is build on top.
With the next fork coming in a few weeks, it is best to look at potential impact of Resource Credit delegation.
What Is RC Delegation?
Before we can answer that, it is best to define what Resource Credits are.
The best way to think about them is they allow access to the blockchain. Hive is permissionless, with no direct transaction fees. To interact, one needs a certain amount of Hive Power.
Resource Credits are basically a quantifying of all activity on chain. Each feature utilizes a certain amount of RC, which is deducted from the total. Like most base functions of this sort, it recharges as time passes.
Obviously, the more $HIVE staked, the more RCs one will have.
At present, if one wants to help out a new account, proving the capability to engage with the blockchain, he or she is delegated Hive Power. This not only provides the RC but also increases the voting power. By definition, this also decreases the VP of the one delegating.
At the same time, when applications do this on a widespread basis, their ability to claim accounts is reduced.
This is all eliminated with Resource Credit delegation.
Once that goes live, Hive Power can remain in the original account. Instead, only the RC is delegated providing the second account with the ability to operate. This is a big change.
Will This Make $HIVE More Desirable?
How all of this will turn out is hard to speculate upon. Things have a tendency to forge their own path, especially when technology is involved.
That said, we know that RC need is tied to on chain activity. Hive is still waiting for that breakthrough application that brings a large number of users to the ecosystem. There are a number of possibilities, with contenders coming from gaming, social media, and even financial.
It is important to understand that the total capability of Hive in terms of engagement is dependent upon the total $HIVE that is powered up. Since RC is directly related to Hive Power, the only way to increase the former is by staking more $HIVE.
Does this make it an even more attractive investment?
This is hard to determine at this point. It is possible that project teams figure out a way to reward individual to delegate Resource Credits to their users. This could come in the form of the second layer tokens.
Since decent-sized accounts (and larger) do not utilize all their RCs, delegation is a way to turn an idle asset into one provide a return. One could generate an income by putting the RCs to use.
Of course, this makes the entire ecosystem more efficient, allowing for more activity with the same amount of RCs available.
This is not something tested to this point yet could be vital in the future.
RC Delegation Is A Big Step Forward
Allowing newer accounts to operate on chain is crucial. The way Hive is structured makes this difficult. It is a double-edged sword though. One of the advantages to this blockchain is the lack of transaction fees. Instead, RCs credits are required, something that comes from having HP in one's wallet.
As more applications and games start to gain traction, the needs start to spread out. Consider it the decentralization of focus on Hive. Instead of all attention on blogging and base layer operations, the applications will attract users interested in what they are offering. Here is where interaction is important.
This means that applications are likely going to take on a more prominent role in the holding of $HIVE. Simply put, they are going to need access to the RCs to satisfy their userbase.
Hive's core, like most blockchains, is in being a distributed ledger. For this reason, the recording of data is dependent upon the number of transactions taking place. At this point, Hive still hasn't done a lot with smart contracts, driving the formation, along with trading of, digital assets. We only scratched the surface with NFTs. The stablecoin, HBD, is still in its infancy in terms of utility and development.
Nevertheless, all of this offers enormous potential. Fortunately we see projects in the works that will likely increase the traffic on Hive. This is going to mean more Resource Credits for basic interaction are required.
Increasing efficiency is always a positive and this is what RC delegation will bring to Hive. It allows for scaling in a way that enables applications to claim more accounts yet still service their users.
And who knows, people might just find out that Resource Credits have value.
Could we see an exchange built in the future?
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A great article, very informative and worth reading again and again we look forward to a more active community yet earning via activities.
well, if this becomes a thing before the next bull than we may see some nice ATH
bear bull cycles are about 4 years so you do the calculations :)
I think this aspect of hive could really change things up and allow Hive to have even more power. Delegation of the RC power to applications that could use it, rental etc are all possible while still remaining in control of your hive in your own wallet which I feel is CRITICAL for people. Lots of new possibilities.
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This is really a big change. For now, most of us won't understand what this change means, but in the future everyone will better understand what it means.
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With RC delegation becoming a possibility for transactions am assuming we will still have HP delegation in place for Apps that needs large HP to reward it's users through upvotes?
Will be exciting to see from the next HF RC delegation coming to life, having to delegate and note reduce my VP is more than welcome.
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I believe when RCs can be delegated...meaning RCs are no longer dependent entirely on staked HP, it will further preach the decentralisation thingy.
There is one coming up? What exactly is it about? Its aim?
Honestly, I remember a time when I was very much active and then RC got exhausted. Good one you said it was a double-edged sword cos I wanted to say that RCs can limit newbies but we can not leave the old guys alone!
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Oh... Thank you very much!!
I’ve been assuming that since the HF that allows for RC delegation is base layer, that a base layer token (HIVE or HBD) would be the most likely payment. Maybe my assumption is wrong?
No the payment would have to be developed at Layer 2, just like payouts for HP delegation to Leo and such.
The delegation would likely be base layer but the project team would pay out in their native token.
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I do not think RC delegation is baselayer. The reason that it is happening with a hardfork is the RC delegation code relies on updated baselayer code that is happening with this hardfork.
Looking forward to this kind of possibilities and I think this will really improve the growth of the Blockchain and every individual.
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Being able to delegate RC instead of Hive Power will be a great capability to have on the blockchain. With RC delegations, newcomers wouldn't have to wait for their RC to recharge, they can just do about their business without worrying much about it.
Do you think there will be strong incentives for bigger accounts to delegate their unused RCs?
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there will be somebody who will create a way to monetize delegations in order to incentivize delegations. I'm guessing some of the larger curating bots would be interested in some more RC's
The base function of RC is not changing. Use it up, delegated or owned, and it will have to recharge. That always comes down to how much one has.
Certainly, especially if there are applications that need them and they offer incentivization through payment in their token.
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Have you noticed that many of the devs (@blocktrades, @howo, etc) have mysteriously had low on-chain activity the last few weeks (hopefully just on vacation)? I only find it odd since we are approaching a hardfork in what I thought was only a few weeks. Do you know if a hardfork date has been announced yet?
I'm for sure not on vacation : https://gitlab.syncad.com/dan :-)
Just super busy right now with final details of hardfork and HAF release.
I'll make a progress report in next day or two. I'm debating whether to push hardfork out to first week of next month (currently it's set for end of this month, but that's awful close, and maybe too close since we haven't notified exchanges yet), but also want to discuss timetable change with our Polish tech lead (who is out on vacation right now), to see how this will affect their work.
Thank you Dan! I forgot you all had moved to GitLab. I was trying to find the project on GitHub with no luck. I hope you can get a vacation after the hardfork.
I havent seen it but I believe it is the end of July unless it rolled into August. They were trying to get some final coding done and then head to testnet.
Maybe problems there.
As for on chain activity, they tend not to do a lot with that so I am not sure it is a big deal.
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How will the fork you speak of separate the tokens from the second layer of #Hive or will it be another way
It has nothing to do with second layer tokens. It is only dealing with the Resource Credits and being able to delegate them instead of having to delegate HP, which will see be possible.
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Have a great weekend sir. Hive has given great opportunities top all.
I’ve been looking forward to this since I first learned of it.
I usually delegate HP to a few projects that payout in whatever. It’ll be nice to be able to pull that vote weight back and still be able to get a return.
Having said that, delegated HP may now be more appealing since the separation of governing authority may be an issue for some that currently rely on delegated HP. I can’t really think of an example but I can remind you absence of evidence isn’t evidence of absence and drop the mic like an asshole. 😁
It is a major move. Separates out voting weight for both governance and curation. Now it allows one to provide access without giving up either of those.
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Delegating HP does not change your governance abilities.
You mean if I have 100 hp not delegated it’ll carry the same upvote value as it would if I delegated all of it? I think that’s what I was probably intending.
Your upvote weight will change (for rewarding authors) but it will not impact voting on witnesses and proposals (governance).
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Very interesting explanation of Resource Credits and what the future might hold for them. Personally, I feel as thought the use of NFTs as login-capable keys, a la using a PFP to login to a website, may be something worth looking into. As one concept, participants in Splinterlands could use their unique assets to login (in lieu of HiveSigner or KeyChain).
I think the concept of RC delegation is extremely practical. I've noticed a similar issue with other chains, like Cosmos. When ATOM is staked from Layer-1, it loses liquidity, unless used in something like Osmosis' Super Liquid Staking which could enable further yield-farming from your initial coin via derivatives. Hydro.Finance is actually working bringing out value from the locked-up $ATOM that's held by validators and longterm hodlers alike. $HIVE seems to be a transactional cryptocurrency as currently constructed.
I wouldn't say there's no speculation in the price of $HIVE tokens, but, since it's not known at the same scale as Ethereum or Bitcoin, it doesn't attract the same rampant big money specs, which is a good thing for the time being imo. $HIVE could be cast as THE "Social Networking Cryptocurrency" which solves many of the censorship problems with legacy media like Twitter, Facebook, IG, YouTube, Spotify, and the gatekeepers of P2P finance like PayPal/Venmo & Block's CashApp, or Wise.
$HBD could be much more in the greater ecosystem, as in, instead of making 2nd-layer tokens and token economies based on $HIVE, link them to $HBD instead, which would further encourage use of $HBD as a Hive Blockchain Application currency, expanding use on all the different front-ends that have been created, and then expanding into custom APIs much like how Stripe enables accepting fiat payments anywhere online, or how BTCPayServer provides code for custom-designed BTC paywalls + invoices.
There seems to be a lot of potential financial applications that can be built on the Hive blockchain that would alleviate some of the pressure being put on people by the legacy gatekeepers in both media & finance.
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I think RC delegation has a lot of potential. You can definitely get people started on it without having to hurt people's vote values on the chain. I am just wondering what applications will cause the demand for RCs to increase and what will happen when there are too many transactions. It's not like we can increase the size of the block so we are stuck with higher costs for new users.
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Great article. I also did a piece on RC delegation a week ago here.
The thing that worries me, though, is that the structure of RC delegation is peer-to-peer, and so is too simplistic in nature. How many users out there, by themselves, are going to actively look out for newbies out of RCs and delegate to them? Only a handful would.
The developer proposed a much more complicated but viable model of delegation that enables the genesis accounts of tribes and communities to establish a pool of RCs, to which people could delegate to, and then the genesis account would delegate a portion of that pool to whoever is in need of RCs. This model was scrapped, apparently, because people couldn't wrap their heads around that concept.
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It's an exciting development. Hive is constantly innovating.
LOL loved it. You have a great way with words 👍😎
Now think about a person who just joins the Hive platform having 0 Hive Power, then he cannot do a simple comment or post because he does not have that Resource Credits with him. This is an obstacle delegation of RC(s) by applications on the blockchain will ultimately eliminate when it comes into full play .