The Need For Resource Credits Will Push The Price Of Hive

Hive has a unique system in dealing with fees. It is fee-less whereas other blockchains have direct transaction fees.

How can this be?

Notice it says "fee-less' and not free. There are no free transactions on Hive. The blockchain, like all others, costs money to run. However, people can get involved without having to pay a direct fee for each transaction.

This is the novelty of Resource Credits. As long as one has enough RC to conduct the transaction, it will go through. If, however, one lacks that, nothing can be done.

One major advantage is the power is rechargeable. This means that while one can use it all up, it will regenerate each day. The model is that 20% of one's total returns every 24 hours. When an account is completely used up of RC, it will be full in 5 days.

Here we see a built in sink that is very powerful.

The Need For Hive Power

There is one way to get Resource Credits and that is to stake Hive. This turns it into Hive Power. Therefore, the greater the need for RCs, the more HP that is required.

We see a lot of discussion about how this topic starting to arise. For example, we see how RC Pools Are Priority #1. While these are valid discussions, we need to highlight one thing:

More traffic means that more Resource Credits are needed.

Hence we see the push to get more Hive Power taking place.

Of course, this can happen one of two ways.

  • The individual users can acquire some Hive and power it up (stake). For the cost of roughly a common transaction on Ethereum, enough Hive is acquired to operate mostly without issue.

  • An application can delegate it to the new users for a certain period of time.

Both accomplish the same end. The second one, however, is what commonly appeals to newer users. After all, when people are new, they really have no idea what this is. Hence, them investing money to transact is not going to sit well with most. In this instance, the application (game) can delegate some HP for a month or so to get the individual started.

Buying Pressure For Hive

We are already starting to see the impact upon this for Hive. While the price has not strayed much from overall market movements, there are some signs that things are beginning to happen. Much of this is presently due to @splinterlands. However, we could see a couple of things driving this idea in the future.

Let us start by looking at the sign up activity. We will be using the charts from @penguinpablo for this.

The latest report shows us this in terms of new accounts:

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As we can see, the last month or so really saw a major increase in the number of new sign ups. Depending upon how many of those users get active, this pushes the need for Resource Credits. Hence, someone is going to require the Hive Power.

We see something interesting from the How Much Hive Is Leaving Exchanges Report:

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The timing on all this is interesting. Not long after the signups exploded, more Hive was being transferred from the exchanges. As we notice, this broke a long established trend of the exact opposite. People were moving Hive from the on-chain to the exchanges consistently.

What changed this?

Splinterlands Moves A Lot Of Hive On-Chain

We only need to look at the reason for the increase in new accounts to get to the bottom of this.

@gadrian highlighted some information in an article regarding the powering up.

We see a couple of tables pulled from @penguinpablo that help us to uncover what took place.

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Simple calculation shows that more than 450K Hive was moved on-chain to their accounts. We can only presume this was to facilitate these new accounts with some Resource Credits to operate.

Resource Credits Will Push The Price Of Hive

The situation with @splinterlands is showing exactly what our future looks like. It is important to remember this is one application at a single point in time.

We can expect two things:

  • More growth from this game, as presented in their road map.

  • A large number of applications following suit.

Imagine for a second if we have 3 or 4 other games/applications doing what this one is. The need for Resource Credits would be even greater. Again, it doesn't matter who provides them, someone needs to have that Hive powered up.

Another thing we need to keep in mind is the fact that games tend to have the least "expensive" transactions. Since they are sending Custom JSONs over, this requires the least amount of RCs. Posting and commenting use up a lot more on a per transaction basis.

Why is this important?

Here we can see the potential of #ProjectBlank that the @leofinance team is working upon. They seek to create "Twitter™ on the Blockchain" by developing a new data structure as it applies to Hive. This will allow for people to operate the same way they do on Twitter but using an interface that also posts to Hive.

The difference here is that the Resource Credits required for those transactions is greater than what a game uses. Hence, we are going to see even more need for Hive.

What happens if #ProjectBlank gets 50K or 75K users? This is just another application that is going to have a thirst for Hive Power to delegate.

The old "rinse and repeat" enters the picture.

It is easy to see how the need for Resource Credits, which is basic to operation on Hive, can drive the price. At some point, there will be buying pressure simply to allow users to engaged with team's applications.

Of course, as outlined in Three Reasons I am Super Bullish on Hive, we also have the @threespeak SIP arriving somewhere around the same time #ProjectBlank is projected to be released. This will start the process of removing Hive from the market, affecting the supply side.

Limiting of the supply side while driving up the demand side can only lead to one thing: higher prices for Hive.

The need for Resource Credits will have a lot to do with this.


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