Confirming transactions works a little bit differently on the Hive blockchain. On most blockchains, transaction fees are paid with finite resources, ultimately providing buy support for their native layer 1 tokens. It is a time-tested model, but it is not the only option.
Like many blockchains, Hive uses a variation of proof-of-stake. Where it differs is that instead of paying miners/block producers (here called Witnesses) in HIVE tokens for accepting transactions, fees are paid using Resource Credits, instead. These are generated by staking HIVE tokens in the form of Hive Power, an act of commitment to the long-term future of Hive.
Your Hive Power will generate more Resource Credits when used, making them a renewable resource. This effectively means that if you have enough Hive Power, you never have to worry about transaction fees, and you will never lose any money to them. You will just lose access to an amount of HIVE tokens for a period of time.
There’s a lot to be debated about the effectiveness of this system, and discussion to be had about the philosophy driving it. On the one hand, Witnesses are forced to rely more on newly-minted HIVE tokens for their compensation, which theoretically causes inflation. On the other hand, it also forces people to lock their HIVE tokens in a form in which they cannot be sold.
What’s truly great about it from a blockchain gaming perspective, however, is that Hive Power—and soon Resource Credits themselves—can be delegated to others. Many people have way more Resource Credits than they need because of the amount of Hive Power they are staking, which comes with other benefits. These don’t have to go to waste.
In our case, we have a lot of Hive Power because the Blockchain Gaming Investment Fund is invested in Hive. We have therefore decided to pay the transaction fees for members of our Scholarship Program, as well as any new players of HashKings or Rising Star who ask. In this manner, we hope to ensure that playing will be free for our students and cheaper for all games in our Accelerator Program.
Info on HashKings scholarships: @wagginston/hashkings-farmer-sponsorship-program-faq
Info on Rising Star scholarships:
@wagginston/rising-star-scholarship-program-begins