How The Bitcoin Hijacking Helps Hive

There is an opportunity being presented for someone to fill. What network steps up is going to be interesting to watch. Here we see a window which Hive can pass through if it chooses.

With the introduction of the Bitcoin ETF, we are now watching Wall Street take over. While there are some like Cathie Wood out there promoting the idea that Bitcoin's decentralization will be enhanced, in reality the opposite is what will occur.

Monetary history shows that fixed money always pools. Bitcoin is no exception and Wall Street will ensure that. While the network could remain decentralized, the coins will be held by a select few. If we apply the not your keys, not your crypto, who is holding the private keys? Wall Street institutions.

None of this really impacts the network. Since the coins are separate from block production, we see the ability to control the network unchanged. Wall Street can control all the bitcoin yet still have no influence on the network.

That said, we get a new narrative arising about the Bitcoin network. This is something worth exploring to determine how valid it is along with a contrast to Hive.

Source

Bitcoin Is A Database

This is the name of an article that appeared recently in Bitcoin Magazine. This is a very interesting viewpoint, one that we discussed on a number of occasions.

How often have we heard this said about the Bitcoin network? Since this is not a common outlook, let us dive into it to see what is being unearthed.

Here is how the article starts out:

Bitcoin is a database. Period. That is what it is. The blockchain is a database for storing past updates to be able to reproduce the current state of that database, the UTXO set. The entire Bitcoin protocol is built around the database. What is a valid entry in that database, and what is not a valid database entry? Who is allowed to propose entries to that database, how do you ensure that only those users’ entries will be considered and accepted? What is the authentication mechanism restricting writing entries to this database? How do you throttle database entries so that people can’t make so many it overloads or crashes the software managing the database? How do you ensure that people can’t make single entries that are large enough to cause other denial of service concerns?

This is absolutely correct. There is nothing to disagree with. In fact, the entire article nails it.

We have insight into consensus, how Proof-of-Work ensures no unauthorized changes and how ever node is updating.

It concludes with this:

At the end of the day, it is entirely up to every individual what they want to allow or not allow in their database, but cutting through all the semantics and philosophical debates going on right now one thing remains unquestionably and objectively true: Bitcoin is a database.

Bravo.

It is great to see someone capture the essence of blockchain. This is a fact lost on so many.

Bitcoin is a database.

What's In Your Wallet?

This was a tagline for some credit card advertisement a while back. It does capture the theme of this discussion if we change it to "what is in your database".

The challenge with the above linked article is that it does not dive into what the database is. The Bitcoin network is a database of financial transactions. Certainly, the fact anyone can write to it is important. However, as far databases go, this is pretty worthless information. After all, do you really care about the transactions on your Visa bill from May of 2015? There is a reason why banks usually limit how far back you can go with pulling up statements. They know few access stuff much more past 1 year. In fact, once the taxes are done, the information is rarely required.

Same with Bitcoin. While it is interesting to see what went into a wallet, who cares? The owner is mostly concerned about the balance in there. Many have fun watching the Satoshi wallets. That said, most information in this regard is not useful.

Therefore, if we buy Bitcoin is a database, then we also have to point out that it is low in value The fact anyone can write to it by transferring value is of benefit but the data in there offers nothing.

Now let us compare that to other databases.

• If a song was uploaded to Spotify in 2014, people still listen to it
• A film added to Netflix in 2017 is watched
• Wayne Gretzky hockey stats are still relevant to some even though he retired 25 years ago
• Information in Wikipedia or Encyclopedia Britannica is still used, regardless of when it was entered

The point being historical financial databases, especially transactional, have little value. Other databases are not so since the data is still relevant.

What gets overlooked is that Bitcoin, as a database, is pretty worthless. The information is useless after a very short period of time.

Valuable Databases

We need to be clear: all blockchains are databases.

This is the function of a blockchain. That is why blocks are produced and added. Each is filled with data that is accepted through whatever consensus mechanism is utilized.

If we are looking at things from a value perspective, we have to conclude that the most valuable data will enhance the databases. Of course, this brings up an interesting point since the data is open to anyone on a public network. This means that utility starts to become important.

Here is where the narrative of Bitcoin as a database starts to break apart. It is simply a crappy in that regard. The information, for the most part is pretty useless. When it comes to data, other blockchains offer the ability to offer greater value.

When it comes to public networks, there are two factors:

• what data can be stored
• how much does it cost to write to the network
• how decentralized is the network

For the first, we get Ethereum and the associated forks. The smart contract technology allows for the storing of all kinds of data. With the original, we see that fees can be prohibitive. That caused forks in the likes of Polygon and BSC.

Nevertheless, when building a massive database, even at a few cents per transaction, this can get expensive. It is something to consider when deciding where to build.

The final characteristic is vital. If we are dealing with a public blockchain where the data is immutable, we require decentralization. If, for example, voting results were going to be stored, we want something that is both transparent and cannot be altered. Something that is centralized is controlled by definition. Blockchain can provide a solution as long as it is decentralized.

We need networks where a few people cannot make changes. Bitcoin certainly offers this.

Hive Is The Database

If we are going to see the narrative of Bitcoin change to the focus upon the database, we can contrast this with Hive.

When it comes to databases on public blockchains, few are better than Hive. We see the 3 characteristics met better than anywhere else.

Here is how it breaks down:

1. Hive is a decentralized, public database that can store any text. It is no limited to financial transactions.
2. There are no direct fees. The ability to write to the database is dependent upon the stake one holds.
3. It uses a voting system where there is no pre-mine or founder's stake impacting the results. Also, the distribution of the token through social media activities offers stake to anyone.

All of this equates to database creation that is far beyond what the Bitcoin network offers. If we see the narrative shifting when people realize the coins are all being swallowed up by Wall Street, this will move right into Hive's wheelhouse.

Over time, the conversation is going to change. We will likely see tens of billions pouring into the ETFs globally. That will be a lot of bitcoin held by the custodians.

As a side note, nothing in this article should be construed as an outlook on the price of BTC. We are not referring to market dynamics since that is its own animal. Nor is this financial advice regarding the opportunity to make money with Bitcoin. We are simply looking at the network component in light of the recent change by the Securities and Exchange Commission (SEC).

From a database perspective, Bitcoin is out of the conversation. This is one of the easiest to negate. Due to the fees, we likely can remove the EVMs from the conversation since even pennies add up.

Whatever is left comes down to how centralized it is. This is up for debate but many networks are only moving towards more centralization.

If decentralization is a direction, Hive has the opportunity to go the other way. By having base layer coin distribution to more than just block producers, average people can get involved and earn stake.

This is a big difference.

All the while the database is filling up with more than just financial transactions.

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