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Is Hive (HIVE) safe? What Beginners Should Know

Is Hive (HIVE) safe? What Beginners Should Know
Jordan
Major
7 months ago
13 mins read

In this article, we will look at the safety features of Hive, the first blockchain for Web3 that focuses on social networks. The security of its blockchain governance will be examined in detail, as will the distinction between its layer 1 and layer 2 protocols. Information will also be provided on how to safeguard your keys and wallet, as well as its native cryptocurrency, among other things.

About Hive

Hive was created on March 20, 2020, by a group of advocates of decentralization who were concerned that public blockchains were drifting into corporate hands and wanted to take action to safeguard their cause. 

Simply defined, Hive is a social network of apps and services built on blockchain technology that enables you to connect, share, and discover, but also contains a blockchain-based financial ledger built on the Delegated Proof-of-Stake (DPoS). 

Hive has its own cryptocurrencies (HIVE and HBD), wallet (HiveWallet), and blockchain, with the performance of the blockchain, in particular, is designed to scale in order to handle the increased adoption of the currency and platform ecosystem.

Users are the real owners of this decentralized network, and there is no set team behind Hive, which serves as a clear bridge between Web2 and Web3, enabling users to do what they currently do on social media platforms.

Note: To learn more about the platform, be sure to read our in-depth ‘What is Hive?’ guide.


Hive’s credibility in the industry

Beyond its historical stability and established reputation, the Hive platform offers a comprehensive set of security protections to safeguard its rapidly expanding user base. From its decentralized governance for software development to its use of a Delegated Proof-of-Stake (DPoS) mechanism for protocol updates, Hive is revolutionizing blockchain technology. 

On its blockchain, Hive additionally makes use of stake-weighted voting and majority block validators. On top of this, it utilizes a tiered key system that provides built-in protection for its accounts, wallet staking, and time-sensitive account recovery processes for its wallet, to mention a few other features.

Furthermore, there have been no reports of successful hacks or thefts against the network since its launch, which adds to the platform’s credibility in the cryptocurrency space. 

Thanks to its proven track record, Hive is well-positioned to become one of the world’s most widely used Web3 blockchains with all of the advantages of Web3, including immutable accounts and resilience to censorship. Hive is intrinsically censorship-resistant as once content is posted to the blockchain, it remains there in perpetuity, unlike many other social networks, which allow de-platforming.

As more developers become aware of the benefits such as the security, privacy, and quick and free transactions that Hive provides to their users, the ecosystem is expected to continue to expand.

What makes Hive blockchain safe?

Governance

Rather than being hosted on one centralized server under the control of a single corporate organization, Hive is a decentralized blockchain-based ecosystem that differs from traditional social media platforms since it is distributed across multiple servers maintained by individuals in various countries around the world.

As part of its decentralized governance model, Hive employs the DPoS consensus protocol to make decisions on software development and protocol upgrades.

To elect block producers, also known as “witnesses”, who must agree to allow modifications to the 1st layer (Blockchain-level) protocol that is shared by all apps, stake-weighted voting is utilized. 

Stake-weighted voting provides a stable base layer while allowing second layer (Application-level) applications to innovate at a quick pace.

Hive is not based in any specific jurisdiction, so when planning, preparing and implementing all the protocol updates, the developments are produced in a cooperative and transparent environment by the global team. Therefore, from the time of their conception until the time of their ultimate execution, all protocol updates are completely open-source.

Notably, as a Hive user, you have the option of casting a vote for the “witnesses” who will be in charge of the servers. For any modifications to be enacted, 17 out of the top 20 (by stake-weighted votes) must agree on the new protocol.

Still, it’s worth noticing that witnesses are servants of the network, so to have real impact one needs a big pile of stake rather than being “just a witness”

Witnesses

Witnesses play an important role on the Hive blockchain, authenticating signatures and timestamping transactions by putting them in blocks. To put it simply, a block is any collection of transactions (posts, votes, transfers, and so on) that collectively update the state of the database.

If, for example, a witness fails to deliver a block, they will not be paid, and may potentially be voted out. In general, witnesses are expected to:

  • Run a reliable block producing node;
  • Design a failover system;
  • Maintain a public seed node;
  • Optimize blockchain operational settings;
  • Provide proper price feeds;

In addition, they must also author or discuss improvement proposals, evaluate code modifications, and be active on the network. 

Certain witnesses may make contributions to the core repository, while the development of additional applications and infrastructure initiatives is also supported by a number of them.

Hive witnesses 100% participation. Source: Hive.io

In order to begin each round of block production, 21 witnesses are reshuffled: the top 20 witnesses (by voting) and one randomly selected standby witness. 

Each witness is given a chance to generate a single block at a set pace of one every three seconds. If a witness does not generate a block within their time slot, that time slot is skipped, and the next witness is responsible for producing the next block.

Hiveblocks witnesses Source: Hive.io

Trustability

Delegated Proof of Stake is a consensus mechanism that maintains a record of all transactions on Hive, and the algorithm thus secures the blockchain. Indeed, DPoS is an application of technology-based democracy that safeguards the blockchain against centralization and misuse via voting and election protocols.

The voting procedure is weighted depending on how much Hive Power (HP) you have staked (Hive Power is the HIVE that has been staked to your account and an illiquid version of the coin that can’t be transferred without first unstaking it over 13 weeks). Stakeholders pick witnesses to run a Hive server that creates new blocks and secures the network.

Hive blockchain layers 

Layer 1 (Blockchain-level)

The core blockchain protocol is the first layer, and it outlines the rules that everyone on the blockchain must follow. As a result, modifications to these rules also referred to as a “hardfork” are not common.

Before they can be executed, hardfork adjustments must be agreed upon by the majority of Hive top witnesses. Hardforks are usually carefully scheduled because of the complexity and coordination work required by block validators (e.g. block producers, trading exchanges, etc.) for a successful hardfork.

Layer 2 (Application-level)

A second layer service may input data into the Hive blockchain without requiring extra processing by Hive’s block validators. Second layer applications may also add new features without having to wait for the block validators to update their servers, while still reaping the advantages of running on a blockchain, including security features such as:

  • Data immutability;
  • A consensus ordering for all blockchain operations;
  • Cryptographic validation of account activity.

Uniquely, the emphasis on a second layer design for dispersing application load over several sidechains allows scalability beyond the limitations of typical smart-contract networks and, in turn, alleviates scaling constraints.

Ultimately, by utilizing a stake-weighted voting system, electing witnesses must agree to allow modifications to the 1st layer protocol shared by all apps. This ensures that the 1st layer protocol remains stable while allowing 2nd layer applications to innovate quickly.

Therefore, Hive provides benefits that are similar to those offered by a smart contract-based blockchain. However, Hive is not vulnerable to the same kinds of CPU denial-of-service assaults that have occasionally halted conventional smart contract blockchains, since smart contracts do not operate on the Hive first layer.

Consequently, Hive is a secure blockchain that will not vanish suddenly like some other projects; its protocols are built in a transparent and cooperative team-building environment, employing the DPoS consensus for software and protocol upgrades.


Are Hive cryptocurrencies HIVE & HBD safe? 

The Hive network has two native tokens: Hive (HIVE) and Hive-Backed Dollars (HBD). A basic internet connection is all that is required to send or receive Hive tokens instantly and without cost.

Staking HIVE

As stated above, Hive utilizes a DPoS blockchain system, and one of the reasons this is built is to reward users who stake their Hive as Hive Power. One of the best ways to keep your HIVE coin secure is to keep it “powered up.” This is done on your own account wallet, which you have full control over since you have the private keys to it. 

“Powering up” refers to the process of transferring HIVE to Hive Power in your wallet and storing it there for 13 weeks, which is essentially staking your currency on the blockchain.

The process of unstaking your coins and converting HP back into liquid HIVE takes 13 weeks, during which you will get equal weekly payments ofHIVE. Thus, there’s a window in which you may begin the process of recovering your account, minimizing any potential damage if someone were to get their hands on your keys.

Note: HIVE is now listed on Staking Rewards, so users have another place to learn more about what they can earn while staking their HIVE.

Hive account sign up and keys

With a Hive account, you can effortlessly engage with Hive-based dapps and generate revenue from your content while keeping track of your Hive crypto holdings in your fully integrated wallet. Importantly, each account creation option has varying degrees of privacy and simplicity of use. 

Note: Keep in mind that Hive does not provide “reset password” features, so keep your keys safe. 

Hive usernames/addresses are short (3 to 16 characters). Another Hive account must create them for liquid HIVE or Resource Credits obtained via staking HIVE. 

HiveOnboard, Encency, and 3Speak are all free accounts with phone/email verification required to mitigate abuse, while the remaining accounts demand a small fee with no verification. If you already have a staked Hive account and are an experienced user, you may create additional accounts manually.

Hive registration providers. Source: Hive.io

Note: Hive recommends printing the username and keys and using one of its wallets to hold the posting, active, and memo keys.

Key security measures

Built-in protection

Hive’s tiered key system provides built-in security against the compromise of user accounts. User’s Private Posting Key may be regenerated if they have misplaced or mistakenly revealed their key in any way.

To further safeguard its users, Hive reminds them about the phishing scams:

“Remember to never share your private keys in memos when transferring funds from an exchange. No exchange is asking for your Hive private keys, only your account name!”

While also offering the following tips on Twitter to keep your account secure.

Time-sensitive recovery procedure

Similar to any blockchain, a degree of user accountability is necessary since all transactions have the aspect of finality associated with them.

For instance, if an individual’s account has been compromised due to accidentally divulging their keys, they may still be able to act and recover control by following a time-sensitive ‘recovery’ process under specific criteria.

Is HiveWallet safe?

The HiveWallet is a fast, secure, and open-source wallet; it provides users with quick confirmation times (on average, 1.5 seconds). A fast QR Scanner and Biometry integration are included in the app, designed for users of Hive blockchain technology in particular.

HiveWallet. Source: Hive.io

Using the secure mobile wallet app, users may carry out safe blockchain-based operations, such as:

  • Monitor multiple Hive accounts;
  • Sign and transfer transactions using biometric authentication;
  • Import keys into an encrypted wallet;
  • The application generates a unique initialization vector for each wallet; 
  • Users can also unlock the passcode using biometrics, by keeping the passcode on your device’s native keychain;
  • Receive and share QR codes quickly and effortlessly;
  • Utilize the built-in QR code scanner to scan other accounts and import keys quickly.

HiveWallet key safety features 

The following is a list of the type of security features built into the wallet:

  • The wallet has AES 256 encryption;
  • Per device & per (re-)install, there is a unique initialization vector;
  • The program prompts you to choose a difficult-to-guess password to encrypt your wallet file;
  • If your device allows biometric access (Touch ID, Face ID, Fingerprint), and if you have such feature enabled on your phone or tablet, it is possible to save the passphrase in the device’s native keychain.
HiveWallet secure mobile app. Source: Hive.io

Verdict

Overall, our verdict is that Hive is a safe blockchain; with Hive, the user is the owner, not the product, providing decentralization, user control, and transparency. Hive’s goal is to create a robust platform for decentralized applications and it provides a solution by serving an open and secure public database for online content that is not held by a single organization or individual.

With more and more individuals being silenced, de-platformed, and having their brands tarnished, Hive offers users the potential for virtually anyone to build their own censorship-resistant account. 

Due to the fact that Hive provides censorship resistance at the account level, it enables you to create everlasting communities on a fee-less model that focuses on scaling and aims to solve the complexities of blockchain-based developments.

Furthermore, Hive implements a layered method that does not compromise the chain’s security or the integrity of the information it contains. The Hive underlying protocol has been streamlined, and the second-layer Hivemind database has been expanded, significantly decreasing the size of the witness and RPC nodes, making it possible to scale the system without restriction.

Unlike typical social media networks, Hive is dispersed across multiple servers managed by people in different places across the globe. Crucially, through stake-weighted voting, the governance of all Hive’s protocol and software upgrades must be agreed upon by witnesses in a manner that’s both transparent and open-source from start to finish.

Finally, the legitimacy of the Hive native cryptocurrency is strengthened by reputable exchanges renowned for secure transactions listing the token, such as Binance, Gate.io, Bithumb, and Huobi Global, among others.


FAQs about Hive (HIVE)

Is Hive blockchain safe?

Yes, Hive uses Delegated Proof-of-Stake (DPoS), which governs the blockchain allowing users to retain ownership and manage their own accounts. Furthermore, the decentralized network has a tiered key system that provides built-in security against the compromise of user accounts.

Can I stake HIVE?

Hive rewards its users who stake their HIVE currency as Hive Power. The process is also one of the safest ways of storing your Hive, as unstaking your coins and converting HP back into liquid HIVE takes 13 weeks, during which you will get equal weekly payments from Hive.

Can I store HIVE in a wallet?

Yes, you can. Hive has its own wallet, “HiveWallet,” which has many security features, including AES 256 encryption and a per-device & per (re-)install a unique initialization vector. On top of monitoring multiple Hive accounts and sign and transfer transactions using biometric authentication, among other features.

Can I keep HIVE on an exchange?

Keeping Hive on a centralized exchange in a hot wallet is possible, although this is not the best practice to keep your cryptocurrency safe. We would advise using the HiveWallet or staking your Hive as a safer alternative.

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Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.

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