It is likely we get a number of exciting announcements at the next Hivefest.
In the meantime, we got a bit of a teaser from the SpkNetwork team. They spent a number of months hinting at this addition yet, it seems, we are in initial testing stages.
What is this big announcement?
It is going to be the addition of bitcoin to the Hive ecosystem.
Basically, we are going to be looking at a way to move from $HIVE directly into bitcoin. What gets even more exciting is the prospect of being able to swap HBD for $BTC.
This opens up a world of opportunities while removing a major barrier to this ecosystem.
Bitcoin is the king of the hill when it comes to exchanges and liquidity. There is nothing even close. Therefore, tapping into this only makes sense.
When there is the ability to swap our base layer coins for bitcoin, we can access any fiat currency or crypto. The path to all major exchanges is open. We know the tentacles of this coin are large, and we will be piggybacking off that.
Of course, the reverse is also true. By having this ability, money can come into the ecosystem through this same mechanism. Any token can be converted fairly easily into $BTC.
We often discuss the idea of use cases. This is extremely important for currency, especially stablecoins. With the Hive Backed Dollar (HBD), having outlets is crucial.
What is the top use case for HBD right now? I would say that buying $HIVE is the main utility. Here we see a direct path of purchasing something that people want.
Of course, that coin doesn't come close to rivaling bitcoin. With this addition, we are adding the ability to buy $BTC with HBD. That might quickly become one of the most utilized features. After all, the volume of $BTC/HBD swapping should be a lot higher than the internal exchange.
Whether it is trading, moving in or out of base layer coins, or simply adding to one's bitcoin holdings, this avenue is available. In fact, consider the potential of earning Hive-Engine tokens and being able to, with a couple moves, end up holding $BTC.
What is the one drawback to bitcoin?
For most, the fees are at the top of the list. Perhaps some are put off with the speed of the network but that is usually secondary. What it costs to use this as a medium of exchange is the biggest hindrance.
This was the reason for the Lightning Network. Of course, that system has its own series of problems.
Much of this can be resolved with what is being built here.
What we are witnessing is the idea of Hive acting as the transfer layer for bitcoin. The wrapped version of the token will settle on Hive, meaning all the base layer attributes are present. We are dealing with no direct transaction fees, 3 second block times, and one block irreversibility.
Contrast this with Lightning which, due to the fees, has to batch the transactions to write to chain. With Hive, each transaction can be recorded as it occurs, going into the latest block. There is no need to wait since the only requirement is having some resource credits to post to chain.
Hive operates as its own island.
This is something that is not an issue for the moment. We are still building with many pieces of the foundation still being put into place. In the latest developer call, we find that HAF is really giving developers options when it comes to setting up APIs. This is something that is going to allow for great customization while also enabling smaller API operators.
By linking the base layer coins to bitcoin, we no longer are an island from a cryptocurrency perspective. The ability to swap directly on our own sidechain means we have access both in and out.
We all know regulation is coming and Hive does not fit into that mold. This is likely to be strictly a decentralized finance (DeFi) system since the coins will not be allowed on centralized exchanges. This is where using DeFi tools enters.
This is not the case with bitcoin. It will be embraced by all related to finance. We are going to see the largest financial institutions in the world acting as custodians for bitcoin.
While Hive offers a lot more than financial, we cannot overlook the importance of this. It is still what draws the attention in the Web 3.0 world. Certainly, this is much larger than cryptocurrency also but it is likely to be an important piece of the puzzle.
There are a number of things that are still required to make Hive a legitimate player on the Web 3.0 stage. The base layer is shaping up. Now it is building the infrastructure on the second layer that is related to these services.
Social media is no longer without finance. The two are merging. That means having the ability to handle both as users require. One key is going to be entering and exiting the coins in a way that allows users to move onto the larger world.
While we do not have the details, it appears what the SpkNetwork team is bringing forth will solve this problem.
