Hives Core Values | RC credits and security through decentralization

in LeoFinance4 months ago (edited)

Have you ever experienced a delay in the transactions on the Hive blockchain?
Guess not. Me neither. Apart from the HF’s 😊, this blockchain has been running as smooth as possible. Especially when transferring coins.

Hive Core Values.png

A freemium blockchain

Hivers are so used to the fast (3 seconds) and free transactions that they almost never appreciate this. Only when they go to a blockchain like ETH, when the fees are skyrocketing at the moment, then they start to appreciate the free and fast transactions on the Hive blockchain.

Free transactions can be a double edge sward. They do allow users a smoot experience, but at the same time they open the door for spam and countless of useless transactions. If these transactions are recorded on the blockchain, it can grow in size fast and a lot, challenging the operation of the blockchain. At some degree this happened with EOS, that at this point is around 5TB in size compared to Bitcoin, around 300GB and ETH even less than that.

What are Resource Credits?

The easiest way to explain RC is Hive Power. To a regular user Resource Credits (RC) are equivalent to Hive Power (HP). The more HP you have the more RC you get.

The key difference between the two is that unlike HP, RC sole function is to provide the accounts with ability to make operation on the blockchain. RC are not used for generating curation rewards, or witness and proposals voting. The sole function of RCs is making operation on the blockchain.

On the other hand, RCs are tied to HP. The amount of RCs is proportional to the amount of HP one has. When someone delegate HP to an account he is also delegating RCs. In this way the account is able to transact on the blockchain, but it also has the ability to vote on post/witnesses/proposals and earn rewards.

At the moment RCs are non-transferable and tied to HP.

RC on Hive can be compared as gas on Ethereum. You need it to make anything on the blockchain.

Going forward there will be a possibility to separate HP and RC trough RC delegation.

What this means is that one can delegate RCs, the same way HP is delegated, but without the financial aspects of it. What this means you will be able to delegate units (RC) that are only used for transacting with the blockchain and not for rewards distribution.

This will be another way one can earn from its HP by leasing out the resource credits that come with it.

Now for a regular Hiver, this resource credits talks might not be as important, but they are huge deal for dApps and second layer applications. From what we have seen in the past second layer application will most likely be the main drive behind the growth of Hive.

Why are RCs important to dApps?

If we take a look at the leading dApp on the blockchain, Splinterlnads, recently they have announced a change in the account creation. This is due to the cost behind creating account. Account creation is one of the costliest operations on the blockchain in terms of RCs. We will be looking at the cost of the individual transactions bellow.
LeoFinance, another dApp on Hive that is looking to onboard more users on the blockchain is also emphasizing the importance of RCs and implementation of RCs delegation.
RCs delegation is very important for creating a lot of new accounts and onboarding on massive scale.

How much does individual operations cost on the Hive blockchain

If we take a look at https://hiveblocks.com/@dalz we can see the individual cost in terms of RC.

02.png

  • 1050M RCs for comment
  • 68M RCs for vote
  • 170M RC for transfer

Note these numbers are variable and can change depending on the usage of the blockchain.
For the blockchain, comment and posts are the same operation, just posts are top level comments.

At the moment 1HP is around 2 000 000 000 RC.
This is equivalent to:

  • 2 post/comment
  • 30 votes
  • 12 transfers

In 5 days, RCs is recharged so an account with 1HP will be able to do these transactions every 5 days.

As already mentioned, this can change depending on the usage of the blockchain. The transactions now are cheaper in terms of RCs when compared to a year ago.

A more detailed information on RC cost are provided by @holger80 on this link https://beempy.com/resource_costs

03.png

As we can see from the above comments/post are categorized depending on the size of them. The previous example is for a comment/post with 1000 Bytes size, that costs around 1 000 000 000 RC.

Interesting the values for the other transactions are not the same as the ones shown on hiveblock. Votes on hiveblocks cost 68M RC, and the above is almost 100M. Transfers 170M to a 477M. In the example above there is a value for the size of the operations, so it is most likely more accurate.

We can see the cost for a custom json transactions as well, from 100M to a 140M, depending on the size. At the end the cost of claiming a new account which is 6422M RC.

As we can see large posts with more than a 2000 bytes size are the costliest operations on the blockchain (except for claiming accounts). A large custom_json transaction can also be costly.

The cost of RCs changes depending on the usage of the chain

Again, a comparison with Ethereum. Ethereum recently hit a 300 gwei cost per transaction. This is around 30$ for a simple transaction of transferring coins. Now its bellow 1$.

I’m making these comparisons because Hivers have never experienced a congested chain. The cost of RC has never been so high so hivers will pay any attention to it. But it is there. Only much more scalable than ETH.

When the usage of the chain goes up, the cost of the transactions goes up as well.

How to allocate blockchain resources and price them properly is a science. If you have used other chain, like ETH or EOS, you will notice there is more than one parameter. On ETH you have gas price and gas limit. The first is the cost, the second is the complexity of the transfer. There is a difference between a simple token transaction and a smart contract transaction. On EOS you have GPU and CPU. Again, more than one parameter and way to allocate blockchain recourse.

The resource credit system on Hive is a single number that combines a few factors in it:

  • blockchain size
  • computational load
  • state size

Ill not go in details above the above and will put a link bellow for further reading for anyone interested. The main point here is depending on the parameters above the blockchain will determine the cost of the transactions in RCs. Its not one single factor that is used to determine the price but a multitude of them. Before the RC system, there was a bandwidth system, where the main parameter to determine the cost of a transaction was the size of the transactions. Because of this there was more spamming back then. After the implementation of the RCs system the spam is lowered.

If in near future, we come to a point where this blockchain is started to being congested we will se the price of RCs going up and the transactions on the blockchain becoming more expensive. If this happens in an organic way, it is a good problem to have. It will mean that the chain is used a lot. Then we will se RCs at there full capacity where a delegation pools will be used a lot.

Security trough decentralization

Blockchain security is extremely important. Investments in millions goes only if the blockchain security is at high level. Security is provided trough decentralization and having no single point of failure. Hive has gone through the ultimate test.
It was sybil attacked with a purchase of a large pre-mined stake. Now that stake is gone. There is no single entity that controls that much of a stake that can attack the chain in the way it was before. At the same time there is enough users and stakeholders willing to participate in the ecosystem. The blockchain is much more secure and decentralized now then it was before.
Also, there is a 30-day non-voting rule for newly powered up stake that basically neutralizes the stake on exchanges. Because as we have seen the second major treat can come from stake on exchanges.

A lot can be said about decentralization and the different aspects of it, but here we will just stipulate in short that Hive is more decentralized and more secure than a year ago.

If we look at the @arcange chart on stake distribution on Nov 1, 2020 looks like this.

04.png

  • 39% stake - 33 whales (500k + HP)
  • 27% stake - 291 orcas (50k to 500k HP)
  • 19% stake - 1833 dolphins (5k to 50k HP)
  • 10% stake - 8871 minnows (500 to 5k HP)

The largest know stakeholder, the @freedom account owns around 13M HIVE, or 3.5% out of the total 373M HIVE at the moment.

We can see that more than 10k accounts hold a share of the token. This might not seem a lot but for a blockchain project is great. Apart from Bitcoin and Ethereum very few projects can say they have more than 1000 legit stakeholders. Furthermore, then 1000 significant stakeholders. Ill do a dedicated post on the level od decentralization on Hive compared to the other coin.


Obviously the above is not the whole picture. The core value to a project is the idea and the community behind it. The above is just a part of the puzzle. There is more to Hive than the system that manages blockchain cost and decentralization. There is a lot more to be done so these things can take into full force. More apps, more users, more marketing. But their need to be a stable system to support all the above. Having secure and scalable blockchain with years behind it can means a lot.

All the best
@dalz

Resource credits links:

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Hive is a really awesome Blockchain. It is easy to use and fast. Keychain feels more simple as metamask and co.

The only thing I don't like about Hive is the "no Vision" problem. I don't see any Vision everybody understands and wants to follow. It's more like " we can do this or this or that or whatever".

That's why marketing doesn't work at the moment.

What is Hive?
Hive Token will be what in the Future with side chains with own governance token?
Which benefit do you get to power up 1 Million hive?

I think in the period that follow a lot of the questions that you asked will clear out.
What will be the prime function of hive, and the "vision".
Till now the main devs were focused on this hf.
Some talks are already happening in the community, posts as well, and we can already feel some changes that will happen. More community feedback will be gathered in the following period and then execute that in the following hf.

Marketing of this blockchain worked really well before it was banned.

@jerrybanfield ran a fantastically successful crowdfunded campaign of Facebook & Google paid ads from May 2017 to April 2018.

It drove a huge improvement in every metric. Record new users of over 20k per day on 29 Jan 2018 - The day before the ad ban.

It not about "vision".
In a decentralised community anyone can market - you don't need permission

Marketing doesn't work in the past. Look onboarding. It kills every conversion rate if people need to wait 2 weeks.

Add Marketing works (and should work for different front ends), but influencer marketing works 100x better. But here again, hive cant absorb 50k sign-ups a day (or even less).

btw, it's all about a vision. There are competitors blockchains and it's simple. If they work better hive dies.

I've got a whole lot of statistics that show that marketing DID work in the past.
Here is my post about it https://peakd.com/marketing/@apshamilton/advertising-works-it-worked-amazingly-for-steem-in-the-past-and-it-can-work-for-hive

Great analysis.
You've correctly identified painless resource "charging" one of the biggest advantages of the Hive blockchain.

But Hive not only has the best mechanism for charging for resource usage, it also uses real computing resources far more efficiently than blockchains like Ethereum and EOS.
The ability to run full API nodes on cheap & common computers with low RAM requirements is huge.

The combination of much lower resource requirements and an excellent and almost invisible to the user method of charging for usage is a real winner.

BTW: the spelling is "through" not "trough"

The ability to run full API nodes on cheap & common computers with low RAM requirements is huge.

Yep, one of the cheapest out there.

BTW: the spelling is "through" not "trough"

Thanks, corrected :)

Been a long time I've seen a detailed post about the technical aspects of hive. I haven't really placed so much attentions on RC until I started hearing about how it could solve monetized or so I'm not sure, back then from exyle on steem.
Really in-depth stuff here. I'm informed a whole lot of people should be informed too.

Thanks!
One can go in even greather technicalties about rc :)

That's quite enlightening. Well I look to you for everything stats and stuffs of this sort. Hopefully more to come.

@dalz, Absolutely agree with one Point and that is, everything have it's Dual Side. If one aspect is providing benefit somewhere it's giving birth to it's own flaws. Thank you so much for sharing your Indepth Knowledge with us. Stay blessed.

Thanks!

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Welcome.

Reading this post
brings a sense of responsibility
for each hiver to stay informed
and feel good for the state of this blockchain.
The minute this blockchain is congested
it means the value will rise and more people
will have to power up in order to transact.

Posted Using LeoFinance Beta

Thanks!
It will be interesting to see this blockchain congested at some point :)

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really very useful post on the difference between HO and RC.

the next HF25 should focus precisely on the separation of the two values, in order to optimize operations on the blockchain, especially at the Dapps level

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I hope RC delegation will be implemented in the next hf.

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I can’t wait for RCs ane account tokens to have a marketplace where dapps can just pay for what they need to support their growing user base and users with stake can profit in more ways for having stake

Yes account creation tokens might be a thing as well.

I collect my account tokens every week :) ready if there's a market place I think I've got like 70 now

Most of us do not use even %1 of our RC and if it happens, RC will bring more Hive for the users while providing more mana for the developers and dApps. Both incentivized and win-win situation 😎 I love it 😌

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Very well explained,

It's amazing how much RC costs can vary - you only really notice it when you go to claim accounts, usually I think I can claim around 12-13, but sometimes it's as low as 9, I think right after the HF when no one was doing anything it was 20 odd!

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Thanks!
Yes, since claiming accounts is costly and you can notice the difference there.
As mentioned, RCs are like gas for eth and the cost can vary depending on the level of the congestion of the chain.
p.s. on keychain there is an option to automate the accounts claim.

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Oh cheers, I might just do that!

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Congratulations @dalz! You received a personal badge!

You powered-up at least 10 HIVE on Hive Power Up Day!
Wait until the end of Power Up Day to find out the size of your Power-Bee.
May the Hive Power be with you!

You can view your badges on your board and compare yourself to others in the Ranking

Do not miss the last post from @hivebuzz:

Next Hive Power Up Day is November 1st 2020
Trick or Treat - Share your scariest story and get your Halloween badge

really looking forward to RC delegation

#meto :)

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Again to the point and again thanks for sharing your way of thinking

...and a !BEER from me

Thanks for the beer!


Hey @dalz, here is a little bit of BEER from @detlev for you. Enjoy it!

Learn how to earn FREE BEER each day by staking your BEER.

Great post, always was curious about the RC costs of operations.

Congratulations @dalz! You received a personal badge!

You powered-up at least 100 HP on Hive Power Up Day! This entitles you to a level 3 badge
Participate in the next Power Up Day and try to power-up more HIVE to get a bigger Power-Bee.
May the Hive Power be with you!

You can view your badges on your board and compare yourself to others in the Ranking

Do not miss the last post from @hivebuzz:

Next Hive Power Up Day is November 1st 2020
Trick or Treat - Share your scariest story and get your Halloween badge

Grateful for the information, a good job clarifying in detail what the CR is for, recently I could not make publications and it was that I had little CR, I needed this clarification.

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Great post 👌

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Autoprice scaling is awesome and means that attacking by submitting a lot of garbage will cost you in hive. @edicted did a post about a 64kb post :) comments on that are cool. Node operators must pay to store everything we submit to the chain so stopping the spam is quite important. If we allowed everything through, it would get real costly real fast.

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Nothing to do with your awesomesauce post above @dalz, but you're in spot #42 for this week's The Hive Engagement League 🏆 post by @abh12345. I'm sponsoring it with a 0.500 Hive @tipu tip. However, since the nodes are still a bit wonky after the hard fork, TipU (and others) are still having issues so for the time being, I'm sending the tip directly to your wallet. Happy Hiving!

Hey, thanks!

Excelent