Let me introduce myself to the people who don't know me. I started my Hive (known as Steem then) journey in 2017. I had been heavily involved in the community before I decided to leave the chain in 2018, because I felt there was not future in this chain anymore.
I started out with about 6000 Hive and since then I grew my stack in other blockchains which is more than most of the top 21 block producers who have powered up all their block earnings such as @themarkymark (currently he has 1,043,992 HIVE).
I am not pointing this out to brag or neither to bash on Hive. But I write this out of my past love for this community. As I see many of my old buddies @starkerz, @anarcotech, @tarazkp, @fredrikaa, @howo and more, pouring their souls into this blockchain but don't get rewarded in monetary value. Also many of the witnesses I respected @blocktrades, @gtg , @roelandp , @therealwolf and more don't get money for their efforts, same for big investors like @theycallmedan.
I already wrote 2 sort blog post about why I think Hive is failing. Due to a recent post by @spknetwork.chat, in which he showed the tweet by Dan that he knows the inner failings of Hive better than anyone. As somebody who has been in this community and also outside the community I think I can bring some valuable insights to why Hive is failing (or more so is doomed to fail).
I will try to write as much about this in 1 post, started writing 2 short posts about this, but after seeing the @spknetwork.chat, I think it's a good opportunity to write more about this subject at once. There is a lot to be said about the failing of Hive, so I will try to keep this post as general and fundamental as possible. And later on will dive into more details. And frankly I don't want to spend too much time on this chain, but I feel that I have to write something about this, because it's sad to see the lives that are being destroyed by this social experiment of Dan Larimer.
So what is wrong with Hive?
I will discuss the problem on two levels, the blockchain level and Hive as a blogging platform. I know Hive is working to become an application platform, I don't mention the application platform because it's all tied to the blockchain level.
The Hive Blockchain
Oh the blockchain with big promises of scalability and zero transaction fees, all under a Delegated proof of stake (DPOS) consensus. Most of you probable know already with DPOS is, but I will try to explain it in my words, as this is where all the problem starts. Consensus is crucial for a blockchain to exist. The most popular consensus models are proof of work (bitcoin) and proof of stake (soon: ethereum). Without going through what their differences is (you can look this up) the underlying idea is that each blockchain needs validators. The consensus model determine which validators gets paid and how much they are paid. In bitcoin these are the miners, in ethereum these are the validators and in Hive these are primarily the top 21 block producers, aka witnesses.
The problem
The problem is that Hive is inflationary because of DPOS, which is not economical sustainable while bitcoin has a very very low inflation and ethereum is low inflationary and might even become deflationary. Why high inflation is not desirable? Simply, as you don't want to hold dollars because they have high inflation, you don't want to hold Hive or any coin that has high inflation.
While Hive's inflation is much less than the dollar it's still much higher in comparison to bitcoin and ethereum. Why is this? This is because there are no transaction fees. In bitcoin and ethereum miners and validators are paid with block rewards and also network fees, but on Hive you don't have fees so they have to be paid with block rewards. So from a money perspective bitcoin and ethereum are much more desired to be held, even if Hive's inflation will be like 2% in the future. On a side note, the low inflation of Hive could be a huge problem if the Hive token is at a low price because the witnesses will receive less money to pay for their equipment to secure the chain.
Even though Hive has no fees, it actually isn't free to make a transaction on Hive, in fact it's not free at all, because people NEED to have hive powered up. This mechanism however, is good for the witness rewards, because it adds buying pressure on the Hive token. However, only when this buying pressure is present then everything is oke, as we saw in the bull runs, but when this pressure is gone, Hive is in huge trouble. Because if witnesses are not paid enough they can't secure the blockchain well enough. In this sense DPOS works kinda like a ponzi, everything is well if people buy hive, but once it drops it only snowballs for the worse. And the fact that nobody really wants to buy Hive (more of this in the next part) makes hive ECONOMICAL broken, thus unsustainable. And there are more problems to DPOS such as decentralization but this can be for another blog post.
To end this part, why the hive wont work as an application platform, because it wont be sustainable for applications to use the hive blockchain because to use the platform they have to buy hive, and that token is just not sustainable. It would be economical suicide for any serious application builders to start building on the Hive applications layer.
Hive as a blogging platform
Why hive has failed on being a blogging platform, which was its initial value proposition to bring buying pressure to the hive token. In my opinion a good decentralized blogging platform needs the following things:
- censorship resistance
- friendly user journey (signup, UI, wallet setup etc.)
- decentralized honest upvotes (not community curation)
Censorship resistance
In my opinion Hive has failed on this promise to be censorship resistant. Which already apparent from the Justin Sun period, but aside from that in my opinion Hive was never able to really guarantee it would be censorship free. Because for a chain to be censorship resistance it has to be decentralized and Hive with its 21 block producers and maybe another 50-100 standby producers is not decentralized at all. And I know many of you have opinions on this, but take it from me 21 active block producers for + 1 million transactions is not decentralized.
Friendly user journey
On this point I can be short, I think you all have a feeling this is not user friendly at all. The signup, the key management, learning how to include images and other links into the posts, not user friendly. After coming back in 4 years I am surprised not much has been done to improve on this. I tried to embed a Twitter link for example by just copy pasting the link, but it didn't work. While on other social platforms this a given now.
Decentralized honest upvotes (not community curation)
This last point is most dear to my heart. The time I was on hive I was a curator for @ocd (created by @acidyo) and @curie. At the time it felt I was doing important work to help new authors to be discovered. I even created @promo-mentors to help new bloggers. But now I see all the curation communities are an effort to combat the symptoms of the problem instead of the core. Which is very sad because many endeavors from curators such as @m31 and @livinguktaiwan, and curation guild builders such as @pharasim spend countless hours on curation.
The problem with curation guilds is that curation becomes centralized, ironically on a platform that is supposed to be decentralized. Youtube and TikTok is more decentralized when it comes to content discovery than Hive. When content discovery is truly decentralized then content that is valuable really comes to surface and then there is true engagement. As we see on the main page of hive and even in the top subcommunity posts, there is most of the time 0 engagement. And this is logical, because there are only a curation guilds who determine what is good content or not. The average consumer doesn't have a say. Curation guilds practically have become the rule setters of what is "good content", I would even dare to compare it to communist countries who chooses what news people are allowed to see.
In conclusion
Hive is failing on two crucial level, the blockchain level and its initial killer app, the blogging platform. Because Hive is failing on the blockchain level, application makers are not incentivized to work on the application layer of hive. And hive is already behind many smart contracts platforms such as ethereum both in community and brainpower. Hive was always meant to fail. The recent bull market run and the comment from Dan might've been awake up call for many.
I know I might have used extreme examples in this post, and my purpose is not offend anybody. I am writing this out of love for the Hive community I once had, and still embody. I hope to give people the outside perspective that they need.
EDIT
@forthefree19 asked me what I think could be a possible solution for Hive. I don't have a concrete answer, as this is very complex, but the direction I think hive could go is to join ethereum as a layer 2 and figure out how to become a good decentralized blog. Because as an application layer, hive is falling far behind. By doing this, Hive benefits from the decentralization and security of Ethereum while retaining its transaction speed.
Much love,
Futurethinker