In the previous article, we explored how the Hive blockchain was created to offer decentralized governance, but with the reality of hidden centralizations. Today, we will continue to analyze in more detail how Hive operates, highlighting who really has the power and how major players influence the system.

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Hive is a decentralized blockchain designed to be collectively managed by the community through a governance system based on witnesses and stake (the position of participants in the system). However, the reality is that not all users have the same decision-making power or influence over the network. Some groups or entities with more Hive Power (HP) can significantly influence decisions within the ecosystem.

Hive uses a Delegated Proof of Stake (DPoS) system, where holders of HIVE can vote for witnesses (validators), who are the entities that validate and produce the blocks of the blockchain. The witnesses are responsible for managing the network and making protocol changes. In practice, the more HIVE you hold, the more voting power you have in the network, and the larger HIVE holders (the so-called "whales") control a significant percentage of HIVE, therefore they have the power ...

These "whales" are usually groups or individual users who hold large amounts of HIVE and, consequently, hold significant power in the governance. The witnesses, who are elected by the community based on the number of votes (stake) they receive, are influenced by the vote of these large HIVE holders.

The problem that arises is that stake centralization and power concentration in the hands of a few users or groups can create a situation where reward distribution and protocol changes are not equitably distributed but reflect the interests of those with large stakes. This means that the reward system can be manipulated by those who hold the majority of HIVE, creating an inequitable situation for users with less stake.

Another significant issue that arises from this system concerns the suspicious and illicit activities that can take place on the platform, as described in our previous article. Some users and organized groups have the ability to manipulate content, using practices like downvote bombing to penalize unwanted content or content contrary to the interests of a few actors.

These manipulations are not random but strategic. The downvote system allows those with large Hive Power to silence or penalize content, reducing the visibility of posts and nullifying the earnings of those who create legitimate content. This phenomenon has raised serious concerns about the lack of transparency and the possibility of abuse by those who control a large portion of the blockchain’s capital.

Moreover, there are groups of users that manage the reward distribution centrally, favoring some content over others, with no apparent justification, but simply based on the economic power they hold.

Many of the key actors influencing Hive are linked to projects like Steemit Inc., which originally created Steemit (from which Hive was derived). Although Hive has tried to distance itself from Steemit, some of the main witnesses are still connected to projects with substantial financial resources, such as @blocktrades, which has significant influence over the network.

Even exchanges like Binance or Huobi play an important role, as they can hold large amounts of HIVE and, therefore, influence the governance of Hive.

Hive is, therefore, a decentralized blockchain, but power centralization is a reality. The most powerful groups, such as whales, witnesses, and exchanges, have a disproportionate influence over the network and economic decisions. If you wish to participate in Hive or create content on this platform, it is crucial to understand how the governance really works and how some large entities can influence users' opportunities.

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