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.
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.
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.
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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