This is a day that many have been waiting for.
It is safe to announce that smart contracts are nOW live. There was a video posted by the @vsc.network account explaining what is taking place.
We are to the point where any developer can create smart contracts. This is operation as of this writing meaning that a new phase in the Hive evolution is taking place.
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Hive Smart Contracts Live
For those who haven't been following alone, in this instance, Hive refers to the ecosystem and not the blockchain. This smart contract technology is not on the base layer. It is resident on a sidechain, named VSC.
The idea here is to provide better scaling, keep the base layer as condense as possible, and provide enhanced security.
A lack of a robust smart contract platform was a hole in Hive's infrastructure. That is no longer the case.
Before going any further, here is the video for those who have not seen it.
@taskmaster4450/re-leothreads-knartt8p
A few key takeaways from the video.
To start, at the moment the programming is using Assembly. This will be expanded to utilize other languages in the future such as Rust. This means we are dealing with more than just Solidity which is what the EVMs use.
The second point is it can run in the local environment.
Finally, for now creating smart contracts is free. However, in the future, there will be a fee, probably 10 HBD.
As a side note, this is a recurring theme with VSC. The Hive Backed Dollar (HBD) is appearing in many areas within the network. Not only will it be the stablecoin for all transactions, it is also going to be required by nodes as collateral. There is also discussion about creating a Resource Credit type system by having people stake HBD, thus eliminating the direct transaction costs.
This is a fantastic way to generate demand for HBD and, ultimately, HIVE.
What This Provides
The toolbox of developers is about to get a lot more powerful.
Without smart contracts, the ability to develop is limited. Applications and games are basically limited to the features provided by the blockchain. Anything beyond that requires integrating components from outside the ecosystem.
How often has we seen initiatives utilizing BSC or WAX for different things, especially NFTs, since none of that was possible on Hive?
That is rapidly changing.
VSC is expanding the potential for both gaming and finance. The entire DeFi world is built upon smart contracts. This is why Ethereum tends to be the leader. It was the one with smart contract on scale, something that provided the first mover advantage.
Naturally, we know the issues with fees on that blockchain, something they are trying to address.
With Hive, there are no direct transaction fees. This means that we can see a feeless system used for settlement. As stated in the past, this is the opposite of what Bitcoin is doing. To circumvent the fees, the transactions are being pushed to the second layer.
VSC is going to feed into Hive due to the fact that we can settle all transactions without a direct fee. Node writing to the chain will require Hive Power since that is the access token.
Examples
Here are a few things that can be built:
- exchanges
- community tokens
- games of chance
- lending platforms
- futures contracts
- wrapped tokens (Bitcoin is already in development)
- synthetic assets
- transparent voting systems
- supply chain management systems
Basically, anything that is transactional in nature can be done by building a smart contract and integrating it with the blockchain.
The Impact On Hive
What can the impact on Hive be?
If we look at this through the layering framework that is common with digital platforms, we can see how this could have enormous impact.
As mentioned, the fact the base layer coins are going to be incorporated into the system means we are already looking at a direct link. This means we can see a direct correlation between the success of VSC and it translating over to Hive.
Just focusing upon the finance for a moment, if there are millions of dollars in wrapped tokens, as an example, the nodes are going to require enough collateral to cover that. Here is where the demand for HBD grows.
To transact, nodes have to be able to cover the monetary value flowing through, negating the incentive to act in nefarious ways. This is the idea of collateralization.
Moving to the development side of things, here the impact is clear. Essentially, Hive has joined the like of EVMs, Cardano and others in having the ability to create applications utilizing smart contract technology. The key is the individual developers can build what they need. Over time, I am sure a library of contracts will appear, accelerating the pace of things.
Imagine, if you will, CryptoKitties. This game became highly successful on Ethereum but it also nearly broke the chain. It simply could not handle the volume.
With Hive, this is not a problem. VSC is highly scalable being able to handle any volume of transactions. Teams can simply add more nodes to run their contracts on. They also get to choose which ones they run.
At the same time, movement of the assets has no cost. Try this on Ethereum. We know there are millions of NFTs basically locked up due to the fact the value is worth less than it costs in tx fees.
Finally, there is the long-term benefits which are hard to picture at this moment.
We know blockchain is going to be involved in many areas in the future. For example, what impact does it play in voting systems? This is speculation at this point. However, transparency is something that people are starting to consider. What can be built with this technology in this regard?
Taking it in another direction, what about a digital identification system? We know that our world is becoming more digital. Hence, what type of ID will we be using in the future? How can this be tied to the real world, providing the ability to prove who one is while also maintaining privacy?
Obviously, we do not know the answers to this. It will be solved and may never operate on Hive. That said, due to this, the ecosystem is at least in the game. The potential exists for someone to create something like this.
For the end user, it will be some time until the development teams build these contracts and start to integrate them. We will look for future updates from the VSC team as to how that is progressing.