This are really starting to line up.
Hive is actually in a very strong position. Within the blockchain world, the technology that is being developed around this ecosystem is powerful. This is something that is going to benefit all of us in the future.
It is easy to overlook what is taking place. However, when we look at the bigger picture, we can see how this technology will enter in the future.
In this article we will discuss a report that predicts what blockchain finance will look like. We will also delve into why Hive will stand out.
Allied Market Research: Over 60% Annual Growth
Allied Market Research released a very detailed report regarding the future of blockchain finance along with its projections. The numbers are, to say the least, impressive.
The prediction is that this sector will see a CAGR of over 60% annually from now into 2032. This will put blockchain finance near $80 billion per year.
What is interesting is the fact that it believes public blockchains will continue to have the majority of the activity.
Public blockchains leverage significant computational power, making them ideal for maintaining large distributed ledgers associated with financial transactions. These factors are anticipated to boost the blockchain finance market.
This is counter to what many believe, instead viewing the future as private blockchains established by centralized financial institutions. The point about computational power is valid. Public blockchains keep adding to the infrastructure. At some point, private companies reach a limit with the rate they can grow this at.
We also see what is believed to be the major use cases. This should come as no surprise.
The cross-border payments and settlement sub-segment accounts for the dominant market share.
Sending money around the world is a nightmare. Blockchain make this a great deal easier. The simple fact about public blockchains is they reside in no country. Hence, there really are not any cross-border transactions since it is really just moving coins from one wallet to another.
Of course, here is where Hive is positioned to excel.
Hive Advantages
There are a number of advantage Hive has in this arena.
Base layer Stablecoin
The Hive Backed Dollar (HBD) is a base layer stablecoin. This is crucial for medium of exchange. When looking at many other blockchains, the coin is value capture, not a stablecoin. Here we see volatility potentially presenting a problem.
We also have a unit of account that most are familiar with. It can seamlessly integrate into most accounting systems since the denomination is the same.
Feeless Transactions
Allied Marketing Research has this to say about the reason why blockchain finance would be adopted.
In the survey, over 50% of respondents believe that lower payment costs — both domestically and internationally — is crypto’s primary benefit, the report notes. The statement complements Allied Market Research’s report, which bases its growth trajectory prediction on cheaper and safer alternatives.
We keep going back to this point because it is crucial. Hive is feeless. Instead of having transaction fees, we operate utilizing a stake=based system. The ability to transact is based upon stake.
This is an idea that is being duplicated on a sidechain that is being constructed to handle smart contracts. Here is where we see the potential to build financial applications.
There is nothing cheaper than zero. When compared to other systems, fees are charged. With Hive, this does not exist.
One Block Irreversibility
When dealing with financial transactions, settlement becomes crucial.
A major part of the issue with the present financial system is how it takes forever for things to settle. How does until you have access to the funds from an out of state check (forget out of country? It take a number of days for a stock trade to fully settle? Cross border payments can sometimes take weeks.
With Hive, the average is 1.7 seconds. This means that a merchant has the money, paid and cleared, in under 2 seconds. Try that with Visa.
This is something that is overlooked since most simply use the financial system. It is a much different story for those who are involved at a deeper level. Someone is paying for that delay.
Hive can be one of the most powerful settlement layers due to this feature. Nothing out there even comes close. While the bitcoin maxis feel that is the solution to everything, how often do transactions get caught up for hours (even days), only to get rejected?
Infrastructure Does Matter
Infrastructure is something that people bypass when discussing the monetary system. If we are honest, the financial system is really nothing more than a series of interconnected digital networks run by an assortment of players.
It all stems from the fact that a major component to this is communications. In this era, we are talking about the aforementioned digital networks.
Whether you are dealing with a central bank, Visa, point-of-sale system, ATMs, or commercial bank, all are running their networks. They maintain ledgers of all transactions processed. utilizing little currency in the process.
Blockchain is able to take this a step further. By providing a distributed, global ledger, it can eliminate many of these networks. The financial intermediaries are suddenly not required. They will fight this of course but that is the reality of what the technology offers.
On Hive, we have the base layer. Couple this with smart contracts and these intermediaries can be replaced with applications providing the same financial services. There is no need for their record keeping capabilities. We have a master ledger we can operate from.
One of the key focuses over the past two years was scaling. In the last hard fork, the size of the database was cut almost in half. This means we are dealing with a more efficient networks. Steps are being taken to further this.
Do not be mistaken: infrastructure does matter.
When it comes to the financial system, much of the inefficiencies are due to either outdated networks or inter-connectivity issues that comes from so many players being involved.
Hive solves this problem. It also does it better than most public blockchains out there.
If Allied Market Research is correct, and I think they understate the potential, then Hive is in an ideal position to take advantage of this growth.