What is Magi and why is it important?
The answer was simple. A chance to win money
... and I'm a sucker for a chance to win money plus I needed to make a post today.
However, unlike other posts I'm not going to add any technical jargon (if I can help it). I'm just going to say why it is important. Scratch that. I'll give you a story and an analogy of why its important and let you decide if it is worth checking out Magi for yourself. Also 
It all starts with a property in the middle of nowhere.
I have property in Rosswood, BC. It is a beautiful place surrounded by mountains, forest and rivers about 40km from the nearest town called Terrace. Honestly its quite a beautiful place.
But here is a little something that sucks about the place. There is only one road in and out of town. That road is a provincial highway so it is well maintained so it gets priority work done. However if that road is unpassable? There is no way to get to services.
In addition to that there is no public transit from Rosswood to Terrace. There is no bus, no train, no taxi, no plane, and no boat to get from one place to the other. If my vehicle doesn't work...I have to walk 40km
Do you see the problem here?
There is only one point of failure
... Road goes out? I'm screwed
... Vehicle stops working? I'm screwed
How about Hive?
Hive is a beautiful little place with an awesome community. Like Rosswood it only has one path in and out for funds. The Hive-Engine. The hive-engine is battle tested and works very well. There are steps involved for sure.
hive-->swap.hive-->swap.ltc-->withdraw to external exchange
but it reliably gets hive from the hive blockchain to the larger crypto ecosystem. One road into and out of town that I use extensively to bring funds in and take funds off.
But what if that road were to get clogged, blocked or otherwise become impassable?
Just like in Rosswood.
... Road goes out? I'm screwed
Did you notice the similarity?
I sure did. That is the first of two really big reasons why I like having the Magi network. It gives a reliable second way to get funds onto and off of the Hive blockchain (mainnet). Sure the hive-engine pathway works fine and has proven to be trustworthy. However, I always think that having a second option is always a good thing.
Wrapped VS Validator...Jargon sucks
Now if you are reading the other articles you are going to hear about centralized wrapped options and decentralied validator options and get an awesome technical analysis that will baffle the average non-crypto reader. So I have another analogy.
My mother lives in a small town called Unity in Saskatchewan. A beautiful place but pretty quiet and very small. It has one credit union that has been there forever. It is a great place to do your banking. Deposits, Transfers, Chequing, GIC's, Mortgages and all other manner of banking. Works great and they are great people.
There used to be a second option (a bank of montreal) but it closed up. People who had accounts there can still do basic banking but they need to use an ATM as there is no branch in town anymore. In fact they use the ATM at the local credit union because ATM's are network based not branch based and anyone from any Canadian bank (and most foreign ones) can use the network.
I'm pretty sure you know how ATM's work and pretty sure you know how banks work. Both are very secure and both are very useful. However, a bank is location based and if it shuts down you have no options. The ATM on the other hand is network based and available everywhere. Still, if the network goes down then you are still out of luck.
In short one is Centralized (bank) and one is Network (ATM). Both are great in their own way. Banks tend to be easier but you are depending on their staff. ATM's are much more complex to setup but aren't dependant on people but you are depending on their network.
Guess what. The hive-engine system is kind of similar to a bank and the Magi network is kind of similar to ATM's. They both provide access to your money and they both present a different level of risk. One is custodial and one is validator. Both can fail. In fact I've had both burn me in the past.
QuadrigaCX had one custodian of their crypto wallets. When he died all funds in the exchange were lost.
Nicehash has a validator type system for their wallets. It fell victim to a hack of the exchange and funds were lost.
The ONLY secure funds are the ones which you hold yourself with your own keys. But that's a pain in the butt so I'll give up some security for ease of use.
Still the validator system is more flexible. Just like ATM's can work with multiple networks so the Magi system can also work with other systems (in theory, I don't know the guts of things).
In general though? For those people who don't trust the wrapped (custodial) assets that the hive-engine uses. For those people who want a network based settlement system that is more attractive to external exchanges? The Magi network may be just the thing.
All your banking needs
When you do banking a bank of credit union can do a great job. When you have it setup properly online banking and an ATM can do a great job. In the same way hive-engine has been giving reliable NFT and Tribe tokens for years. Magi offers to do the same. HOW they work are fundamentally different but the end result is likely similar.
Which is better? Time will tell. Which is more resilient? Time will tell.
The only thing I know for certain myself? I like choices
I'm happy that there is a second road for my HIVE onto and off of the main network. I'm happy there is a second choice for NFT's and altcoins branched off of Hive.
I love HIVE and am glad that it is getting a second path in even if I don't use it much.
Still, I should drive the second path even I don't really need it right now. So I went onto the Magi network and set things up. I moved HBD from HIVE to Magi. Converted some of that HBD to Bitcoin. Then I could have withdrawn to my wallet but instead decided to add to the liquidity pool so it could do some work for me.
Check out below if interested.
Starting on the Magi system
Login
- Enter usename, use Hive Keychain, Done
Starting at Zero
- Brand new. Nothing here... Except 10 Magi Resource Credits
Adding Tokens
- Click on Deposit and enter the fields.
- I'll be adding HBD from Hive Blockchain to Magi
Enter the fields
- I want to transfer from Hive so I chose Hive Mainnet
- I wanted to transfer my 10 HBD so I entered 10
- "Clicked on" Review Deposit
- Clicked Deposit and clicked confirm.
- Now I have 10 HBD on the Magi System.
- I used up half my Resource Credits to do it
- It shows my deposit on the transaction list
Purchasing actual bitcoin
- I clicked on cross chain swap on the right hand menu
- This window popped up.
My goal is to get half of my HBD into bitcoin so I'll choose 5 HBD on the "From side" and convert to BTC to leave on the Magi Network. With equal amounts I should be able to add liquidity to the Magi HBD/BTC pool.
NOTE: I could just as easily add to my own bitcoin wallet!
Now I wait
- I wish I could say I'm the proud owner of 6148 Satoshi but....
Bitcoin transactions are slow. Many confirmations before it goes from unconfirmed to confirmed. I'll check back in 30 minutes to ensure everything worked. Hive is fast, bitcoin is not, in case you didn't know.
And I have 6148 Satoshi
Putting the money to work
Now I could just hold the tokens and let them do nothing but
I hate money that does nothing so I'm going to add them both to a liquidity pool in the hopes of getting some pool rewards :)
- Click on Pools
- Click on Add
- Enter equal values of each type of asset
- Click Review Add Liquidity and sign with keychain.
Done
My HBD and BTC sort of disappear but in reality they are hard at work allowing other people to cash out HBD or convert BTC into HBD
I clicked on the pool info and...
My HBD and BTC disappear
Honest
It currently reads that I have only 0.003 HBD but
The blockchain knows that I've added coin to the liquidity pool. How do I get the money back someday? No idea. I'll have to keep looking. Until the transaction shows up in the list I doubt I have any way to find out right now. Still, I'm pretty sure I didn't just burn 10 HBD. And....
15 minutes later.
- My liquidity position shows up
and with it an option to remove liquidity if I so desire. So I know how to get my money back in time :)