There is a lot of discussion, of late, about what Hive needs to do for it to proceed forward. Many feel that adding smart contract capabilities is the way to go. This would allow for much greater variance in the opportunities presented to developers on this blockchain.
Which brings up the question should it be at the base layer or a secondary one? Before we get to that, another important question is what about SMTs (Smart Media Tokens)?
Source
Let us first start with this then proceed to the smart contract discussion.
Tokens
When it comes to smart contracts, most people are looking at the tokenization process. As we know, Hive already offers a couple tokens. We also see many tokens being created on Hive-Engine.
- Smart Media Tokens:
For those unaware, Smart Media Tokens (SMTs) are meant to operate on the base layer. They will be coded into the blockchain, thus requiring a hard fork. It will take consensus from the Witnesses for this to go through.
These tokens will be limited in scope. Essentially, they will mirror HIVE. They utilize Proof-of-Brain and that is it. Thus, the 6 or 8 functions that are available to HIVE will also be a part of each SMT.
Advantages: Inexpensive way to set up tokens. There will be a nominal fee to tokenize a community. There is also the added benefit that it will provide instant decentralization in terms of the validation. Since this is at the base layer, the transactions are run through the nodes just like HIVE. Thus, the established infrastructure will handle it.
Disadvantages: The limited flexibility. There is nothing else that can go into the tokens other than what is programmed at the blockchain level. Hence, there will be no NFTs or variance in programmable money. All tokens are HIVE clones.
- Hive-Engine Tokens:
We already has a system in place to create tokens. There are probably more than 100 created on this platform. This is a layer 2 solution so does not operate on the blockchain. Instead, the transactions are sent to Hive via custom JSON.
Advantages: Since it is already in operation, we see how it works. Many are already familiar with it. At the same time, all transactions on the platform are free. There is a fee to add or remove HIVE but when operating on there, there is no transaction cost.
Tokens are based upon smart contracts so they can be more than PoB. We already see NFTs appearing. The team is rolling out new smart contracts in an effort to add to the offering.
Disadvantages: The biggest one is that it is centralized. Hive-Engine operates under the control of one entity. All transactions are on private servers controlled by said entity. Unlike HIVE, which is validated on different nodes, operated by different people, this is the exact opposite. There is an additional URL (leodex.io) that could cushion the Hive-Engine URL getting shut down, but it is limited in what is can do.
There is also the cost. To set up a token, it cost a bit of money to get started. To be fair, in the developed world it is not onerous but could be prohibitive for many third world communities.
Smart Contracts
So far we have one in operation yet a couple in the works.
- Hive-Engine:
As was just mentioned, we are familiar with this one. They are rolling out more smart contract "templates" to make development of applications quicker and easier. The advantages and disadvantages need not be rehashed.
This is the developer who put together the smart contract layer that Hive-Engine is using. He is now off on his own project, looking to create another smart contract layer for Hive.
According to his latest post, this is more of a "virtual machine". There is not too much to comment about since the post is technical in detail, so perhaps some coders could further elaborate on the concept and where it stands in the comment section.
Just as a reference, Buterin has often referred to Ethereum as being a "virtual computer" for the world. Therefore, we could see this modeling that idea.
Here is the post:
https://peakd.com/hive-163521/@harpagon/the-smartscript-virtual-machine-is-now-available
According to previous posts, this "machine" will be what powers the smart contract layer that he is building for Hive. It appears the software is such that anyone can run it, thus offering the decentralized aspect from the start. More clarification on this one would certainly be helpful.
Throughout numerous posts over the last month or two, along with comments made on one of the developer meetings, Blocktrades put forth his idea for smart contracts on Hive.
Basically he feels a server based system is the best. This could be set up in such a way using a number of servers to provide the decentralized aspect that is wanted. From the sounds of it, this would be a solution that could be put together rather quickly.
One drawback to this is fees. Servers obviously cost money and a fee of some form would be required. Since there is CPU utilized, a proposed solution would be to airdrop CPU tokens on Hive holders. This would provide them the ability to operate on the smart contract servers.
Some might question whether this would destroy the "fee-less" aspect to Hive? No it would not.
Think of this as Uniswap and Ethereum. When using Uniswap, there is a nominal fee tied to that application. Once that is completed, there is also a fee for using Ethereum which, depending upon the usage, could be more than just nominal.
With this system, there would be a "fee" in the form requiring CPU. This is what allows for operation on that platform. Anything sent down to Hive would not require anything more what exists now. As long as someone has some Resource Credits (via Hive Power), the transaction will post to the blockchain.
So which is the best and how should we approach this?
That is what the discussion needs to be about. From my point of view, for the smart contract layer, the more the merrier. There is no harm with different teams setting up their own contracts. Certainly there will be differences among each. In the end, providing developers with more options is a good thing.
This brings us to tokens. Should they only be at the layer 2? Personally, I feel that going ahead with SMTs is a good idea. Sure, some will say there is redundancy. However, SMTs will be inexpensive for communities to set up and will be tied with the original idea of "tokenizing the web". Many online sites do not require anything more than a SMT, thus having a seamless way to provide that makes sense.
Another advantage is the blockchain has a history. SMTs could inspire more confidence since they will be running on something that is nearing 5 years of operation. Anyone can look back through the logs and see how the blockchain performed during that entire time.
That said, the drawback, as noted, is that SMTs have to go through a hard fork. For this reason, based upon the scheduled time, we are looking at a minimum of another 6 months before that can even be entertained as coming to life. Therefore, we need to have some other possibilities going. This is where the smart contract layers are required.
Decentralized smart contracts is what Hive is missing along with other ways to create tokens.
A number of variables to consider but this appears to be the main points of conversation.
What does everything think? It is time to start voicing some of our ideas.
If you found this article informative, please give an upvote and rehive.
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SMTs are decentralized and cheap. SMTs can be easily converted into HIVE and back via Automatic Market Maker (AMM), which is the Hives' version of DeFi. Without AMM SMTs would be meaningless, because an external exchange (centralized) will be required to covert SMTs to HIVE.
Investors on Hive can become liquidity providers for AMMs/DeFi.
The key advantage of SMTs is that it is easy to convert them in/from HIVE directly on the Hive blockchain. No third parties required.
And since AMMs require HIVE as collateral, this is the most powerful sink for HIVE tokens, which can drive the price of HIVE to new highs.
Smart contracts on the 2nd layer can add extra flexibility, but Hive will remain on the fringes of competition against Ethereum and EOS. And centralization makes it useless in the face of possible legal exposure. Serious projects would stay away from centralization.
This is an excellent point. It will help to drive the value towards the HIVE token since it provides a very valuable use case.
Certainly seems like another valid reason for bringing SMTs into being.
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Valid points. I never thought of these SMT advantages.
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Simple and cheap SMT's on layer 1 is something I am really waiting for, a token tied to a Hive Community that is easy to set up compared to the cost of running a full tribe on Hive-engine, and I think there is a lot of people on Hive waiting for it too, so putting everything in layer 2 would be a disappointment, that should of course not stop anyone from building layer 2 tokens and smart contracts, but in my opinion simple and cheaps SMT's are needed.
I do not know if Layer 2 solutions are going to be excluded from the simple and cheap. It well could turn out that way. The question is how secure can it be.
But you are right, we have been waiting for SMTs for a long time.
I can't say what is the best system but it seems, for at least the PoB, SMTs fill a great need.
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Yeah I think it will at least be more simple and cheap if SMT's are layer 1, and secured by decentralization comes automatically there.
As to layer 2 that has to have it's own economics to pay for running it and that is why I think it will cost more, regardless if it is up front like Hive-engine or through gas fee's which I saw a comment from blocktrades mention a few weeks back for his solution.
As I understand it HE is trying to decentralize their platform, at least they have a DHF proposal up for that, and I would not be surprized if they go through with that regardless if it gets funded or not.
!ENGAGE 25
Could use an EOS sisterchain like Bitshares did with BEOS.
No offence, but I do not like the idea of having SMT's on a different blockchain, that might be good for dApps that just use tokens, but here the content is on the Hive blockchain itself, if a token is to be tied to that I for one want that token on the same blockchain.
!ENGAGE 10
ENGAGEtokens.ENGAGEtokens.I've been hearing about SMT ever since I landed in early 2019. Tokenization is a process that will inevitably happen and it would be wise to be ahead of others. We have to provide a simple and safe product to possible customers and it is necessary to include it in the next HF
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The wait started in 2017 so it is now closing in on 4 years.
You only had to endure half the process. LOL
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then I can only imagine how much desire there is from SMT users like you since you have been here since 2017 😁
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Since the end of 2017 I have been hearing about the SMT and nothing has happened, we have waited a long time and we have not observed any progress, unfortunately I have lost a lot of credibility and sometimes it is difficult to be optimistic about the future of this platform, although I am one of the people who encourage a lot and encourage people to use hive
This is true, there are a lot of people in the same boat as you.
Of course, I do need to mention that, prior to March, everything on blockchain development was dependent upon Steemit Inc which tended to drag its feet.
Blocktrades etal have only been at this for about 9 months now. Plus they had to tend to a lot of messed up code that caused even more problems. All of that required focus.
Hopefully we see a lot more progress going forward, at a more rapid pace.
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What is your opinion about Koinos?
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I havent really got an opinion on that since the information was a bit scarce. Not sure what they are trying to do or where the development stands.
From what little I know about it, I think they are focusing upon the gaming world.
It could be a sensational step forward. I have no idea what they will eventually turn into.
That said, we still have to take care of business on Hive. It seems Koinos is a completely separate project and even though they had the ties to Steem, they are now off on their own thing.
But I could be mistaken since I dont know a ton about where that project is going at this time.
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Check this out:
https://peakd.com/hive-103021/@andrarchy/koinos-group-podcast-ep-1-understanding-smart-contracts-and-graphene
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I think that having SMTs on layer 1 is the right direction. For many potential communities out there all they would want is their own token and the ability to vote / reward users and to transfer the token between accounts. Many may not even need the post / commenting storage aspects as they may well already have their own non-crypto forum set up.
Hive being able to provide that offering, on a free, fast, and secure basis is very powerful. Layer 1 seems the best place for it for me. Currently layer 1 Hive solutions feel both freer and faster than layer 2. We can also already illustrate the security of layer 1 through Hive's existing track record (as you point out).
Layer 2 for more complex smart contracts seems like a good idea too. But the next HF priority should be SMT roll-out and DAO funds should be pushed in that direction before (or at the same time as) any layer 2 work.
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I agree with that. For security, layer 1 is much better. While I think the people who run Hive Engine seem like honest and competent people who knows about the future.
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All true. Although with Harpagon's work, that is exclusive of the focus of the team working on Hive code.
So they could happen simultaneously.
As for the next HF, I think SMTs need to be in there. Enough talk about it, just decide how to do it and focus on it. Push that out with the vote decay for witnesses and perhaps other changes to the DAO.
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The vote decay on witnesses is #1
Changes to DAO #2: maybe some type of system withe tiers. 30% DAO for large projects over 100HB/day 30% for medium size projects 20 - 100HB/day 30% for small devs <10 HBD/day
10% for freelancers to support any of the projects.
SMT's I am still uncertain if they are needed, but would like to see them.
Hive-Engine will continue to scare me as it is a centralized Layer2 that could stop at anytime. Not because they are bad people but how about (heart attacks? COVID? etc..?)
Just my thoughts as a small dev team trying to grown on the chain
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Who, in their right mind, would use smart contracts on a chain that has lost all trust of immutable of data on the blockchain during the fork shit show from STEEM. Stick with gaming and other non-critical data and leave trust to PoW tokens or ETH 2.0's PoS and stop this dreaming that DPoS can be trusted.
On top of that, Hive Engine is centralized. There is not even DPoS level security there. Or if they have decentralized it, they have hidden that information pretty well.
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There is nothing decentralized about Hive Engine at this point.
Maybe they will move in that direction as talk is but so far I have not seen any indication that it will.
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Wonder if some type of merge via a fork to make Hive Engine is possible. Like make Hive witness be the one in control of Hive Engine
I don't believe there is a way to merge the two since one is at the base layer while H-E is on the second.
Certainly, I would believe there is a way to replicate H-E with the decentralization. It might take a ton of work to get there but the software can be on multiple computers while syncing things up.
It might require a total rebuild.
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All the transactions generated by the users and those is generates itself the Hive Engine server processes are already stored on the Hive blockchain. If Hive-Engine went down permanently for whatever reason, it would be possible to rebuild its state from those transactions by someone else. (If not, I would be laboring under too optimistic assumptions, which would be bad.)
The centralization pertains to how the data is processed. In contrast, Hive nodes maintain consensus in regard to what actions they take in response to transactions recorded on chain and what Hive nodes do on their own. Hive Engine is just one server.
To decentralize Hive Engine would involve setting up a network of servers that each scan the chain, act upon the transactions and upon generating transactions of their own such as sending second layer token rewards to users - while maintaining consensus on exactly what user-generated transactions have been posted to chain and what Hive-Engine initiated transactions should be posted next.
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Yeah that why I was thinking of some way to make DPOS of Hive be the one in control instead. I sure it can be done via some clever way. I still don't if Hive engine is really a second layer as all tx are still onchain. I think of it as a layer 1.5/metacoin like Omni.
It’s concerning that the current communities are all dependent on one centralized entity
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That is something that is a consideration because it is an area of vulnerability.
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leveraging KOINOS? :)
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Adding smart contract certainly will attract more attention to hive adding SMT token is also a good idea Either second layer or base layer
I used to be excited for SMTs... back in the STEEM era.. now I think HE tokens are the way to go although smart contracts definitely need to happen for HIVE to thrive
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I agree, layer 1 is a good idea. Layer 2 solutions will get developped over time anyway and it's going to take much longer to perfect.
Especially when it comes to security.
Layer 1 already offers that as we proved over time. The second layer opens up another can of worms that we will not know the solution to for a while.
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I'm in for the base layer. I've put a comment on blocktrades post, where as a suggestion would be to remove Hive as a base payment for posting. Hive shall be only printed by the witnesses. Hive shall than power up the communities with resource credits. Does a community want to grow, needs hive for that. The communities will be independent and the better the community the higher the value of the SMT it issues. Cross posting between communities shall be possible, but will require more resource credits or HP.
A hardfork can be pushed also earlier, as the development shall be decentralized. 6 months is a long time frame, where some changes can be implemented. This is why we need decaying witness votes, to be able to switch the consensus witnesses more often, so that a status quo is not accepted and can be challenged, of course for the good of the blockchain.
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I think smart contracts are simply about storing "state" on the blockchain and having operations available in order modify and query the data. Centralization is a HUGE issue and is a complete non-starter. There will never be a project that grows to a meaningful size if the solution is a side chain that a single person can pull the plug on. I do think there needs to be away to address this need, and it goes beyond issuing tokens. For example, how cool would it be to have a thriving DeFi economy on Hive beyond the couple Dex's available. I recently came across the INDEX token on hive-engine. What a great idea! But the documentation is lacking, the volume isn't there, and it's a huge leap of faith because, again, centralized side chain. Looking forward to seeing how this moves forward!
I like INDEX also and bought some myself. But you are right. I have trust in the individuals behind it so I am confident in that.
However, the centralization of H-E is of concern to many. It is something that requires addressing by the community.
I am sure in a few weeks we will have a great deal more insight where things are going.
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I'm scared of Index also because the volume is so low that if you buy any amount it seems like you might be bag holding. I'm going to watch it closely though.
Does not enabling SMT in layer 1 will cause same issues that ETH is facing ? (Network Congestion)
I feel Blocktrade proposal of CPU credits make more sense so that no one will spam blockchain with worthless tokens and halt/congest the whole blockchain.
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That could be a concern. We are not sure how much activity the blockchain can handle since it was never truly tested in real time. So having tokens spamming the blockchain could lock things up like with Ethereum.
However, there is one consideration, one would need enough RCs to spam the chain, something that will be harder to accomplish if the price rises.
The CPU could be a deterrent to spamming.
We will have to see what some of the more knowledgeable individuals have to say about it.
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In terms of speed. Would it be better to have tokens on the second layer? I am sure scalability will be important it these things are really to take off.
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Hive has great potential
@taskmaster4450 Thank you very much for keeping us up to date about what's going on.
LOL Hard to bet against Harpagon, that is for sure.
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