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).

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