What's the Difference Between Hive Power Delegations and Resource Credits Delegations?

We know the learning curve of Hive is often considered quite steep. Resource Credits (RCs) delegations represent another layer that adds to this complexity.

The interesting part is that regular users will be able to use Hive without worrying about resource credits. In fact, this is one of the main reasons why RC delegations were introduced in the first place. To allow applications to give users the RCs they need to seamlessly operate on Hive within certain limitations. Probably intensive users will have to either power up their own HIVE to have enough RCs or rent more RCs from whoever has in excess.

But this post is for someone who wants to know broadly how the car works without lifting the hood.

I'll try to keep things simple. Certainly simpler than they are at the base layer, where they are implemented.

I'd like to start with a simple formula:

HIVE Power = Resource Credits + Voting Power

If we start from here, we already see HIVE Power is more valuable than Resource Credits, because it includes Voting Power too.

So, what are the Resource Credits and Voting Power used for?

What Are Resource Credits?

Resource Credits are similar to gas fees paid on most other blockchains. It allows your account to perform transactions on the blockchain. This is where the major difference comes in.

On blockchains like Ethereum, BSC, Polygon, Thorchain, Cosmos, etc. the fees are permanent and often paid from the governance token (i.e. ETH, BNB, MATIC, RUNE, ATOM, etc.), making your wallet lighter with every transaction.

On Hive, fees are not paid in HIVE. They are paid in Resource Credits. Which are a product of HIVE Power (HP) - you hold or are delegated HP also means that you hold a replenishable bag of RCs.

So, fees on Hive are not paid in HIVE and they are not permanent, because resource credits are like the mana in games. They restore with time passing.

Even if you deplete your entire bag of RCs, you can wait and it will fill out in time. Or you can power up more HIVE or delegate more HIVE Power to the account and you automatically get more RCs. And now, after the Hive Evolution upgrade, you can delegate only RCs to that account needing it (note: at the protocol and probably API level this is already possible, user interfaces haven't added this yet).

What is Voting Power?

The voting power based on your HIVE Power gives you

  • the ability to influence the distribution of the HIVE and HBD rewards from the reward pool (i.e. curate posts and comments)
  • a say in governance, if you vote for block producers (Hive witnesses)
  • a say in the distribution of funds from the Hive DAO (DHF - Decentralized Hive Fund), if you vote on DHF proposals.

The vote is stake-weighted, so the more HP you have, the higher your influence.

What Do I Need? Resource Credits or HIVE Power?

First of all, if you have HIVE Power you also have Resource Credits. Unless you delegate them away. So, one doesn't need both an HP delegation and an RC delegation, for example. This is either one or the other.

Now, let's see what you need...

This is pretty simple really. If you vote with an account (curate, governance, proposals) you need HIVE Power.

If you do anything else on Hive except vote, you only need Resource Credits.

This might be a good reason to reorganize accounts a bit - if you have more of them - and split operations accordingly. For example, I will likely only keep HP in one account (two, if I count this account where I'll have HP delegated for curation reasons).

Posted Using LeoFinance Beta

0.85331012 BEE
14 comments

Never knew the details of the difference between resource credits and HP. I was thought resource credits and vest where the same thing as HP.

thanks for sharing the difference though...

#PIZZA

Posted Using LeoFinance Beta

0.00139293 BEE
(edited)

VESTS is how the blockchain stores HP internally. Practically, it's a different token for the internal use of the blockchain, and it fluctuates in value compared to HIVE, but you don't have to worry about it. Most people just think about HP, including myself.

So, just think of VESTS as HP for the coders, and HP for the rest of the world.

RCs are one of the products (benefits?) of holding HP, together with the voting power.

0.00000686 BEE

That's a very good explanation! Some graphic designer on Hive should make a small infograph on this. That'll make sharing easy 👍 !CTP !PIZZA

Posted Using LeoFinance Beta

0.00121538 BEE

Sure! Most people are visually inclined, so that'll help a lot.

0.00000463 BEE

@gadrian - dude, for folks like me; always trying to figure all this stuff out, I so appreciate you breaking stuff out in laymen's terms.

This is a post, I'll keep handy.

!CTP

Posted Using LeoFinance Beta

0.00121422 BEE

Awesome Jimmy! Glad it was helpful.

0.01643867 BEE

Thanks, @gadrian! That was a very helpful explanation. I have 3 three accounts but this is the one I vote with so I should keep the HP here. But I can delegate resource credits to the other accounts I have for posting.
!ALIVE
!CTP

Posted Using LeoFinance Beta

0.00120724 BEE

If you don't vote with them, yes, delegate RCs, once that is possible. And either power down the HP and move it to this account, or delegate it to this account. That will increase the voting power of this account. But only after you delegate RCs to those accounts, not before, because you won't have RCs otherwise.

0.00007876 BEE

Thank you again, @gadrian. Really appreciate the clarification. I will do that as soon as I can.
Have a great day and an Awesome week! 😀
!CTP
!ALIVE

0E-8 BEE

Your simple explanation will really benefit those whom are new to the blockchain. Nice work.

Posted Using LeoFinance Beta

0.00124140 BEE

Thanks! I've seen some people who have been around for a while and wondering if they need both an HP delegation and an RC delegation.

0E-8 BEE

Great explanation! Cheers Adrian!

0.00123434 BEE

Thanks! Cheers Steve!

0E-8 BEE

Thanks for another post full of valuable information. I am still learning and this type of post really helps.

Posted Using LeoFinance Beta

0.00123062 BEE

Thanks and you are welcome. I'm glad it helps.

0E-8 BEE

This is a very informative amd timely post. The oversimplification makes it easily understandable. Not all accounts need HP, only those that vote.

0.00122714 BEE

Thanks! I've been known to overcomplicate things. Oversimplifying them for a change is great. And that's what non-tech people need and want.

0E-8 BEE

Great and simple explanation! Putting this in my weekly curation post.

Posted Using LeoFinance Beta

0.00122773 BEE
(edited)

Thanks Mitch! Appreciate it!

0E-8 BEE

It's a nice reminder but I only have 1 account. So I never really had to worry about either one. After the first few months on Hive where I had RC problems, I never had any issues afterwards.

Posted Using LeoFinance Beta

0.00120150 BEE

That's the easiest. Only one thing to manage. No headaches. :)

0E-8 BEE

!CTP

Posted Using LeoFinance Beta

0.00120907 BEE

Thanks, @fiberfrau.

0.00180114 BEE

PIZZA!

PIZZA Holders sent $PIZZA tips in this post's comments:
@d-zero(3/5) tipped @gadrian (x1)

You can now send $PIZZA tips in Discord via tip.cc!

0E-8 BEE

Thanks, Adrian.
That makes sense.
Thanks for explaining it.

!CTP

Posted Using LeoFinance Beta

0E-8 BEE