Back To Basics: Hive Is Simply A Better Payment System
We often discuss topics of where Hive can be a threat to the existing system. This can be within the social media realm where we see blogging, microblogging and other features starting to take hold.
There is also gaming. With Splinterlands, Hive boasts one of the leaders blockchain gaming. This is being followed up with the development of other games, many which have equal potential.
Then we have finance. There are many articles written about the idea of bonding, lending, and providing an assortment of financial services. All of this has the potential to frame Hive in a completely different manner.
However, the more advanced we get, sometimes we overlook the most basic of concepts.
In this article, we are going to turn back the close and focus upon the most fundamental of blockchain concepts.
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No Third Party Intermediary
Bitcoin came onto the scene with a revolutionary idea. People could transfer value (money) and have it settled without the use of any centralized third party. It was a financial network that operated without any financial intermediaries.
This is something we overlook. Sovereignty was an important tenet in the early days of the industry. The idea that someone, through the private key system, could have complete control over his or her money was groundbreaking. As the system expanded, the ability to stop any transactions rapidly diminished.
Bitcoin, the network, does come with some problems. While it eliminates counterparty risk, the speed of the system is not ideal. Utilizing the Proof-of-Work consensus mechanism, we often see it taking a couple hours for transactions to settle. To be a global payment system, this is insufficient.
That said, it still does offer a secure, decentralized medium of exchange. Fortunately, Hive does this also.
Decentralized Stablecoin
Hive offers a decentralized stablecoin that is not backed by any company or foundation. The coin is tied to a blockchain that has nodes running all over the world. It has block producers who are unrelated in terms of their voting and engagement with each other. Through the Delegate-Proof-of-Stake system, nobody validates more than 5% of the blocks.
Volatility is a killer when it comes to a medium of exchange. A payment system requires a degree of stability in the currency being used to make the purchases. Here is where most cryptocurrency fails. As a method of payment, the fact that it can have 10% or even 20% swings in a 24 hour period makes it ill-suited for this purpose.
The industry uncovered this fact and, hence, the development of stablecoins. This is designed, through a peg, to operate in a more stable manner. Hive offers this through the Hive Backed Dollar (HBD), which can always be converted to $1 worth of $HIVE.
Again, since it is decentralized and tied to the base layer of the blockchain, there is no entity behind it. This means no counterparty risk other than the chain itself.
Fast And Feeless
In addition to a somewhat stable medium of payment, Hive also offers something unheard of within the payment realm.
Within the system, there are no transaction fees. Unlike other payment applications, with Hive, one simple sends the amount to another wallet without fear of a fee cutting into the total. Blockchain applications along with the traditional financial services networks, i.e. banks, charge for this service.
On Hive, there is zero direct cost. The only requirement is to have enough of the access token staked to engage with the blockchain.
At the same time, there are 3 second block time. Unlike the aforementioned Bitcoin, a Hive transaction will not take hours. It will either transmit or fail, within a couple seconds.
This is a fact that puts it on part with the traditional payment systems. In fact, when it comes to international communications, this could even outpace them. Hive's transaction time is global, meaning the physical locations of the participants is immaterial. Once the system receives the transaction, it processes the same it whether it originated in Malaysia or San Francisco.
Merchant Benefits
When it comes to payments, most focus upon the end users.
However, Hive's system offers huge benefits to merchants. This is something that is rarely every discussed but is crucial. Any merchant who realizes this will see how foolish it is NOT to use this payment network.
Retailers typically have what is called a merchant account with financial service providers such as Visa. These accounts enable the processing of transactions using the cards offered by the company. The merchant is not responsible for the validation of the individual nor worried about the ability to pay. That is all handled by the likes of Visa.
For this service, a fee is charged. This is most often tied to the volume that a company does. An entity like Walmart will get a fee of 0.5%-0.75% whereas companies that do less transactions might pay 3%.
Hence, when receiving payment, the fees are deducted from the total. This is simply a cost of doing business.
But not with Hive. There are no fees with the service, for the sender or receiver. If 10 HBD is sent, that is exactly what is received.
Another feature is when the money is received. With Visa, in the United States, payment usually arrives within a day or two. This is not the end of the world as all merchants are aware of it.
However, with Hive, the money is processed in a few seconds. As soon as the transaction is complete, the funds are available. Hence, we have a 24-48 hours timeframe verses a few seconds.
Finally, Hive offers one block irreversibility. This is something that is unheard of within the cryptocurrency and traditional financial world alike.
In the latter, the customer has a certain period of time to cancel the transaction. This is not the case with Hive. All transactions are final as they say.
The difference is the merchant knows they are financialized within a few seconds. In addition to 3 second block time, the time on irreversibility is a couple hundred milliseconds. Here we see how the claim is transactions are completely finalized on Hive within 1.6 seconds on average.
In Conclusion
Hive simply offers one of the best payment systems out there.
As a merchant, it offers benefits that are unrivaled. Visa become the leading payment processing company in the world, and earning a huge amount of money in the process. It built out a powerful computer network that allows for global transactions. Fortunately, blockchain offers that by default.
When it comes to speed and a lack of fees, Hive stands out. The fact it utilizes a stablecoin with a unit of account everyone understands, i.e. USD, we see how the learning curve is rather reduced.
Here are a couple articles (here and here) explaining how breakfast was purchased using HBD in Venezuela. Both the customers and merchant experienced the benefits outlined in this article.
For this reason, it is easy to see how a Hive brings the original tenets of cryptocurrency to the table. It is for this reason, and the fact that it does it better than any other network out there, that it is a threat to the existing payment system.
Hive is simply the best payment processor there is.
If you found this article informative, please give an upvote and rehive.
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Thanks buddy for those wonderful boost on Hive's reputation, I am in 100% agreement with you.
Hive is home
Just another point of how spoiled we are here on Hive. I think about BTC and how slow it is, but really it is pretty fast compared to the traditional system. Then you have Hive and it just blows them both out of the water. It's pretty amazing.
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Sorry I am a bit late in answering the comments.
Ironic I just did a post about Bitcoin Maxis never understanding Hive. It is interesting that they have to build a network on top of the Bitcoin network to do what the Bitcoin network was suppose to.
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Yeah, that is pretty crazy. I also think it is funny that there are several self professed BTC Maxi's on Hive. I'm thinking but you post on Hive... It's like subconsciously they know it is better, they just don't realize it yet!
Very clear statements, many people doesn´t know the difference between cryptos as medium of exchange and cryptos as speculative assets, this article explains clearly this difference.
My dinner last night (delicious burges and fryes) were paid with crypto BTW 😊
, good post!
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🗳🅨ᴏᴜ ɢᴏᴛ ᴍʏ ᴠᴏᴛᴇ ✔
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Glad to see you using crypto for food. That is a big step forward.
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Just join hive recently. Seem fast but there is a minimum requirements.
It is accelerating. A lot of work went into infrastructure.
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Very fast but so far still safe.
Here in the state of Sucre, where we are working with the adoption of crypto HBD, we know all the characteristics in favor of receiving HBD merchants as a form of payment.
Beyond being a stable currency, we offer them that there are no transaction fees and that they can have this cryptocurrency immediately available for their use.
The speed with which the transfer is executed is faster than swiping a debit card for payment, as well as decreases the problems in terms of giving change for cash and I am talking about dollars.
Example: the account is 3.5 $ and I have a 5$ bill the merchant mostly never has to give change in dollars, and gives us bolivars and we lose the cash in dollars, then to eliminate several headaches we pay the HBD per dollar one by one, in fact the payment would be 3.5 HBD in a fast, safe and simple way.
So we continue working hard friend, good to read this type of content that continues to show us the way, beyond the concepts that we handle us, greetings from Cumana Sucre state Venezuela.
This is something I never thought of but it makes sense.
Another point that shows how much people prefer the USD to bolivars.
HBD solves these problems.
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To better appreciate Hive's payment system it is good to go back to basics now and then to see what we have and it's potential as we advance into the future.
HBD's performance over the past year has been nothing short of impressive.
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When I look how much hive and hive-engine tokens I send just between my own accounts, I could never do that with any type of other payment system... In most cases, I couldn't even accept payments without a third party...
Yeah we would go broke with the swapping we do between Hive and Hive engine.
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Si observamos el comportamiento de Hive se a mantenido a pesar del invierno criptografico esperando que vuelva ese Nobiembre 2022 donde llego casi a 3$ usdt nuestra criptomoneda.
Si observamos el comportamiento de Hive se a mantenido a pesar del invierno criptografico esperando que vuelva ese Nobiembre 2022 donde llego casi a 3$ usdt nuestra criptomoneda.
Yes, I agree, Hive is very fast and the fact that there are no commissions is a significant advantage.
For a merchant it could be the best way to receive payments.
I am convinced that the more people get to know our fantastic ecosystem, the more they will start adopting and using it in a thousand different ways.
It is slowly growing. I am watching the expansion in Scure. That is a great testing ground.
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Sweet list of advantages for Hive to be acting as a payment system. What I would like to get out of it is to have a steady passive revenue stream that could fuel a startup project on the blockchain. But still a long way until there, I need to be more creative.
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Well you are your own business. The great part of Hive is we all can build.
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I can easily see Hive becoming the Network State as described by Balaji Srinivasan.
I believe it will be one of them. It won't be the only one by any stretch of the imagination. However, we are laying the foundation for that.
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How much HP would a merchant need to process 1000 transactions in 12 hours? I don't have a good feel for how quickly RCs "regenerate" over time and how many are required per transaction?
Someone could correct me if I'm wrong, but I believe the RCs necessary for processing the transaction would come from the buyer. So your RC would reduce when sending the payment with no affect to the merchant.
In any case, if the merchant needs more RC, leasing costs would just be a cost of doing business.
You are correct. The sender is the one who requires the RC.
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The receiver doesnt require any. It is the sender.
A merchant will only need resource credits (HP) when sending the HBD out of his or her wallet.
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Really well-written and very thoughtful as always.
Is there a list showing the stores accepting HBD? I haven’t seen any locally. Even BTC is not widely accepted. (Canada)
We are addicted to credit card points and Apple Pay.
Not that I know of. Hiveblocks on Twitter was putting together a list. I am not sure how up to date it is.
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I agree with all the reasons you have up there. It just stands out to me when we have to wait a few business days for money to go get transferred when all the numbers are is some numbers in some textfile/database.
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