We are beginning to see a lot more interest in cryptocurrency from some parties that are not exactly the ones we want looking too closely at things. Of late, the regulators and different governments have been talking about cryptocurrency in general, and **stablecoins specifically.
It is to the point that they realize the threat that stablecoins present to their power. This is something they are going to fight. Of course, they have a well developed power apparatus in place to push back against anything that is a threat.
In my view, it will be put to the test.
Decentralization Is The Key
We talk a great deal about decentralization these days. It is obvious this is the answer, both in theory and practice. The question is how well are we doing in practice?
The advantage that cryptocurrency has is that we can keep expanding and spinning up new projects as soon as they are ready. Hence, the attack vectors are spread out. This makes it tough for the existing powers to take down the entire system.
Thus, collectively, we are doing a fair job on decentralization. The challenge is that there are many points of weakness as we hone in.
That is not the case with a lot of other blockchains. For example, we know there is a large Ethereum stake in the Vitalik and the foundation. We also can look at EOS and consider how much Block.One is holding.
The true decentralized system is Bitcoin. That was opened up immediately for mining and the hashrate spread out over the last decade. Ironic, with China's recent crackdown on miners, it appears to be spreading things out even more.
Hive does not have a major stake held by one individual or entity. The largest position is less than 5%, at least of the staked tokens. In this type of system, that is where the influence comes from.
Delegated Proof of Stake
This is a structure that gets attacked by many. Is it ideal or are there so many flaws that it is completely vulnerable?
We saw the ability of this system put to test with the Justin Sun episode. Here was a situation where a big money player came in to "buy influence". Ultimately, it was successful, mostly due to the pre-mine stake that was still floating out there. This point of vulnerability was removed as stated above.
Obviously Proof-of-Work can offer a lot in the way of security due to the ability for anyone to mine tokens. However, this is coming under attack for how resource intensive this is.
We also see Ethereum switching to a PoS system. How is this going to work out? It is by far the largest blockchain to embrace that model. Will the validation abilities only end up in the hands of a few people? A case is often made that Proof-of-Stake ends up pushing more into the hands of the rich since that is where the inflation rate ends up going.
Over the next couple of years, Ethereum will continue to get a lot of attention. Is it going to become a chain simply for the larger money players? This is an outcome that appears very possible.
Flying Under The Radar
Hive is on nobody's mind and that is a good thing.
As much as we all want Hive talked about, sometimes it is better simply to operate obscurely while everyone else is getting the attention. While Hive is doing a fine job with things, we have to be mindful of attack vectors. There is also the issue of having to strengthen all that is here.
In a post that discussed whether HBD is the safe stablecoin, the point was made that we see the potential to have something that is out of the reach of the establishment. In fact, that part is already our reality. HBD cannot be touched by them. The only question remaining is whether it can hold a peg to operate as a stablecoin.
This is something that was recently tended to. HBD flew under the radar of the community, let alone the regulators. However, we might be in the process of creating something very valuable for the industry.
We are at the point where the FUD is mounting. Stablecoins are getting a lot of attention. Not to be left out, even that "late to the party crypto-expert", Jim Cramer, popped off about Tether. It is hard to deny the validity of the questions posed just the source.
Tether is getting a lot of attention with people questioning the lack of transparency. This is not only coming from the establishment but also people within the cryptocurrency community. What is something actually backed by is a valid question.
This is just one example of how Hive, operating out of the spotlight, is able to work on things that can aid in the future. There is a lot to be said for flying under the radar.
Who Is (Or Isn't) In Control?
Many point to the fact that Hive lacks a "front" person. There is no face of Hive. For many, this is a negative.
Aligned with the flying under the radar, this actually helps us. As the pressure from the establishment mounts, we are likely to see some of the more popular chains attacked in different ways. Do not believe the alphabet organizations are going to sit idly by.
We do, however, see another point. Ask yourself this question: Who is in charge of Hive? Come up with the answer.
It is a challenge. While one might point to the larger token holders, there is not a single entity that controls much. The influence one has is minimal compared to the total.
There was also the optimization of the chain over the past year. This enabled the system to operate with a great deal more efficiency. What this does is allows smaller players to get involved in node operation, something that is not likely with the switch for Ethereum. To be part of that circle, one needs some substantial funds.
By continuing to optimize the basic operations of Hive, we see the ability for more people to participate. Hence, if some of the top operators do not operate as the community wishes, there are plenty to replace them. We saw this with the Sun situation. It was only due to the founder stake (along with exchange voting) that the attempt was successful. Nevertheless, there were node operators who quickly found themselves out of consensus once it became clear where they stood.
There was a case where the lack of attack vector was exemplified for Hive. A mining company, Hive Blockchain, did not like the idea of this blockchain using that name. Under normal business circumstances, the cease and desist letter would arrive from some law firm.
It is likely they wanted to do the same thing with this situation. The problem is the attorney probably asked for the address to mail the letter too and none was available. Who do you sue?
The establishment has this issue at most levels. Who does it go after? Take down one URL, two more pop up. Remove one developer from the situation and there are others to step in. Go after one or two nodes and you find others around the world. Of course, they can pop up quicker than be removed.
Does this mean that Hive is safe from the powers that are? At this point, it is far ahead of most other chains. Is it impenetrable? Probably not and that is why more work needs to be done in this area. However, we already see how things are panning out with each new iteration that is added.
It is easy to look at price to conclude where things stand. At this point in the game, however, scalability and vulnerability have to be looked at. The former is getting some attention while the later is overlooked.
Hive must keep looking at its attack points and working to remove them. It is in this way that it will ensure that it is safe from the powers that seek to remain in control.
Fortunately, it is off to a nice start. This is how it can be a leader in the march towards Web3.
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