We continue our series discussing the advantage Hive holds on other ecosystems, both Web 2.0 and 3.0.

Here are the first two articles:

* [Hive Advantage: True Account Ownership](https://leofinance.io/@taskmaster4450/hive-advantage-true-account-ownership)
* [Hive Advantage: 20% APR Without Counterparty Risk](https://leofinance.io/@taskmaster4450/hive-advantage-20-apr-without-counterparty-risk)

In this article we will discuss the idea of [decentralization](https://leofinance.io/@leoglossary/leoglossary-decentralization).  We covered it a bit in the one regarding [counterparty](https://leofinance.io/@leoglossary/leoglossary-counterparty) [risk](https://leofinance.io/@leoglossary/leoglossary-risk).  However, it is vital we cover it in light of all that is happening.

![image.png](https://images.hive.blog/DQmcTHayc1kiMmVLVxwWGJRxA3UN163QUkqd7Z8Yo3B3D9j/image.png)
*Image by @doze*

### Web 3.0

There is no way to have [Web 3.0](https://leofinance.io/@leoglossary/leoglossary-web-3-0) without decentralization.  This is one of the tenets of the entire transition from the present state of the Internet.  [Web 2.0](https://leofinance.io/@leoglossary/leoglossary-web-2-0) was very powerful in terms of the tools that were brought to the table.  However, it also put a lot of power in the hands of very few companies.  The situation is even worse when we consider the fact these entities are controlled by very few people.

The [cryptocurrency](https://leofinance.io/@leoglossary/cryptocurrency) industry espoused how it is decentralized.  Events throughout 2022 are evidence how this simply is untrue.  We are not getting decentralized systems.  Instead, we are getting more control exerted over us with a few entities having the power to make all decisions.

Hence, this goes in direct opposition to the concept of Web 3.0.

Fortunately, Hive exists to counter this.  The blockchain is decentralized in its [governance](https://leofinance.io/@leoglossary/leoglossary-governance) model.  Using a [Delegate Proof-of-Stake (DPoS)](https://leofinance.io/@leoglossary/leoglossary-delegated-proof-of-stake-dpos) model that established [block](https://leofinance.io/@leoglossary/leoglossary-block) production on a rotation basis, the design is resulted in no single entity having control.

The key feature is distribution.  When using [coin](https://leofinance.io/@leoglossary/leoglossary-coins) voting, it is vital that a few [wallets](https://leofinance.io/@leoglossary/leoglossary-wallet) do not have all control.  If an overwhelming majority of the distribution is in the hands of a few, that is not decentralized.

With Hive, the largest holders of [Hive Power](https://leofinance.io/@leoglossary/leoglossary-hive-power-hp) (staked [$HIVE](https://leofinance.io/@leoglossary/leoglossary-usdhive)), are holding less than 5%.  This means an attack through back room deals is not truly viable.  Gaining control through this means is a near impossible task.

Another important component is the fact that the rotation ensures that all of the consensus [block producers](https://leofinance.io/@leoglossary/leoglossary-block-producer), as long as they remain there the entire month, will produce the same number of blocks.  This is the case regardless of the amount of [stake](https://leofinance.io/@leoglossary/leoglossary-staking) voting for them.  

We see how important this is with Ethereum's shift to [PoS](https://leofinance.io/@leoglossary/leoglossary-proof-of-stake-pos).  Since there is coin voting yet the percentage of the stake one has determines the probability of getting a block means that the largest validator pool will get the majority of the blocks.  This gives an enormous amount of power to a few entities.

Therefore, since Hive has a decentralized, [base layer](https://leofinance.io/@leoglossary/leoglossary-base-layer-blockchain) node system, we can begin the process of building out Web 3.0.  This is not something that can take place in too many other ecosystems since we they have controlled block production.  That is just putting a different tilt on Web 2.0.

### Decentralized Text Database

This is a concept we discussed in the past yet is vital to the concept of decentralization. 

Decentralized [data](https://leofinance.io/@leoglossary/leoglossary-data) is the core element of Web 3.0.  Having a [database](https://leofinance.io/@leoglossary/leoglossary-database) that is permissionless, [immutable](https://leofinance.io/@leoglossary/leoglossary-immutable), and allows for the permanence of information is crucial to the future evolution of the [Internet](https://leofinance.io/@leoglossary/leoglossary-internet).  

When we look at Web 2.0 [applications](https://leofinance.io/@leoglossary/leoglossary-application), we see how the data is fully in control of Facebook, [Google](https://leofinance.io/@leoglossary/leoglossary-alphabet-google-financials), Twitter, or PayPal.  The same is true for the banks who control the global monetary ledger.

With Hive, nobody is in control of this.  The block producers who are global all keep the software running.  At present, there are over 100 computers with identical copies of the database.  The individuals or team behind that node are in full control of that version of the database.  There is no say, however, over any of the others.  That is completely outside of their control.

The idea of [distributed ledger technology](https://leofinance.io/@leoglossary/leoglossary-distributed-ledger-technology-dlt) is financial in nature.  Basically, [Bitcoin](https://leofinance.io/@leoglossary/leoglossary-bitcoin) was a ledger that was designed to allow the [medium of exchange](https://leofinance.io/@leoglossary/leoglossary-medium-of-exchange) without the [banks](https://leofinance.io/@leoglossary/leoglossary-bank) in control.  The database on that [network](https://leofinance.io/@leoglossary/leoglossary-network) is similar to bank ledgers.  It is a series of transactions depicting where [money](https://leofinance.io/@leoglossary/leoglossary-money) resides.  

With Hive, we go far beyond that.  This database is not only a ledger of [transactions](https://leofinance.io/@leoglossary/leoglossary-transaction), it also can house text data similar to centralized nodes.  Writing an article that is posted to the [blockchain](https://leofinance.io/@leoglossary/blockchain) means it is permanent.  Since it cannot be censored or taken down, we have a full history of what is taking place.

We can see how this is obviously different from what is taking place on other platforms.

Again, when we look through the lens of Web 3.0, how can that exist if the database is centralized.  Now we are simply recreating Facebook, Twitter, or PayPal.

### Decentralized Layer 2

A final component that could be worthy of its own article is the idea of replicating the decentralization at the second layer. 

Having a decentralized blockchain is not enough.  This is only the beginning.  Since everything is not going to reside at the base layer, it is crucial that [layer 2](https://leofinance.io/@leoglossary/leoglossary-layer-2) applications can operate on a decentralized [node](https://leofinance.io/@leoglossary/leoglossary-node) system also.

Here is where Hive is also excelling.  Through products such as DLUX (Honeycomb) and the Hive Application Framework (HAF), we see the concept starting to take hold. 

This is a crucial component for [decentralized finance (DeFi)](https://leofinance.io/@leoglossary/leoglossary-decentralized-finance-defi), something that was espoused yet not created in reality.  Hive is looking at offering a host of DeFi features at the second layer, all tied to a decentralized node system.  Once again, we see how the [infrastructure](https://leofinance.io/@leoglossary/leoglossary-infrastructure-computer) is such that can put together projects that truly can be decentralized.

It will be interesting to see how the use of [decentralized autonomous organizations (DAOs)](https://leofinance.io/@leoglossary/leoglossary-decentralized-autonomous-organization-dao) factor into this.

Ethereum is touted as the leader in DeFi.  The problem with this viewpoint is the blockchain is obviously becoming centralized with a couple of validators taking over.  There is even discussion about instilling [KYC](https://leofinance.io/@leoglossary/leoglossary-know-your-customer-kyc).  This is a major warning that we are not dealing with Web 3.0 in this situation.

That mean, in turn, we cannot be dealing with DeFi at the second layer.  If the base layer is centralized, everything built on top is at risk.

With Hive, this is not the situation.  We have a decentralized base layer with the intention of mirroring that at the second layer.  

This is the foundation of Web 3.0.  

___
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