Hive's Big Advantage: Social Media First

The situation with Hive as compared to the rest of the blockchain world is very interesting. We see some fundamentals that separate Hive from everything else. Well, the exception is Steem but we know the flaws that exist there.

Many focus upon cryptocurrency, seeing the monetary aspect of things. This makes sense since it isn't what is touted most often. For the majority, cryptocurrency is a way to get rich. This is the motivation of most retail investors and Wall Street firms are interested because of the money they can make.

This is not going to change.

There are, however, a group of people who look at this situation from a different viewpoint. While the monetary component cannot be completely ignored, there is a lot more to the story. We have an unfolding that is going to radically alter the structure of many things online. This could extend into the physical world at some point too.

So let us take a look at what we have unfolding and what Hive brings to the table.

Blockchain Foundation

Blockchains are databases. This is the core feature that everything stems from. It was the basis of what Satoshi Nakamoto created with Bitcoin and it holds for the networks rolling out today.

With Bitcoin, the database mirrors that of a bank. It is a series of transactions recorded on a ledger. This is nothing novel. What was new was the idea of distributed ledger technology (DLT). Here we have the ability to maintain the ledger in a decentralized manner. Also, the major breakthrough that Bitcoin provided was solving the double spend problem without the use of a centralized entity.

This had never been done before.

To be clear, all blockchains have the foundation like Bitcoin. They all monitor transactions, keep balances, and prevent double spend. Anything that is tied to a blockchain utilizes DLT for recording of the information. Hence, there is a financial component to all of them.

Here we see the starting point for most blockchains. Hive is a bit different in that it was designed with social media in mind. The base layer not only handles the ledger but we also see built in features that are used for social media activities. This has extended the database to not only include financial transactions but serve as a decentralized text storage facility.

For this reason, we see how articles and other text data can be saved. All of this is tied to the premise of social media on blockchain. While audio and video are not accepted, anything written can be integrated.

Thus, whereas the earlier blockchains were finance first, we can say that Hive was constructed for social media.

It is the major advantage that it holds.

Merging Of Finance And Social Media

Things are getting very interesting. Elon Musk altered the path of things when he announced Twitter as the "Everything App". He was very clear that his goal is to make Twitter the largest financial institution in the world. This stems from his experience with PayPal.

From this situation, we can garner great insight. For Musk to succeed, he has to integrate financial services into that platform. But let me ask, do you see any banks for financial institutions putting forth they want to become the largest social media company in the world?

How come we do not see the reverse happening?

It could be the bankers do not see what is taking place. So far, Musk is talk so he is not really infringing upon their market.

If Chase (JPMorgan) or Goldman Sachs came out with a new social media network, would anyone care? Would there be motivation to use it? Does the idea of using your bank account to engage in online activities of this nature excite anyone?

Not likely. Here is where we see the reverse does not work.

Yet, isn't this the same thing many are trying in the world of blockchain? My view is we are seeing a mirror image of this idea.

Different Structures

Finance is a completely different structure than social media.

Here is where I believe the major challenge enters. The idea that transaction fees and social media are congruent seems to be a stretch to me. In fact, this is a non-starter in my opinion. Regardless of how appealing the application is, if people have to pay each time they want to like or post something, it is game over.

Finance is built around transaction fees. It is a major funding mechanism for that realm. People are accustomed to it and it works there.

The same is not true for social media. Facebook and YouTube monetize in different ways. It is not a direct charge to the users. Could this be done with other structures? Sure. The problem is they are centralized.

It is a concept that goes counter to the idea of blockchain. Would you want to use a blockchain that collected and sold your data for example? That is basically reverting us back to Web 2.0.

Another issue is that many chains are not capable of handling social media. We see this with Ethereum. Smart contracts allow for the creation of these services. However, the question of scaling is already in play. Does this mean it will not be solved? Of course not. The challenge is doing it as other solutions enter.

For Ethereum, it comes down to is it a good idea to run smart contracts at the base layer? There are many who believe these are best on layer 2. If that is the case, what is left at the base layer other than a financial ledger?

Hive has none of these issues. It was designed to accept social media from the start. We are not a bank trying to incorporate social media in. Like Musk, we can take that realm and incorporate financial services. In fact, Hive has an advantage since a blockchain is a ledger completely with its own currency (Hive has two coins). Musk has to find 3rd party companies to partner with (or get licensed himself).

In addition to social media, Hive can enter decentralized finance (DeFi) in a large way utilizing layer 2 smart contracts and building applications providing the services needed.

In Conclusion

Hive used a design in reverse of what most other blockchains did. It is becoming clear this is a major advantage over what is being attempted. We have development taking place that is much different as compared to other projects. While they are trying to figure out how to scale and handle fees, Hive as that covered.

This is a huge advantage in structure. As we evolve in the Web 3.0 world, I think this will become much clearer.

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