Project Name: Holo
Ticker: HOT
Website: holochain.org
Twitter: twitter.com/Holochain
Whitepaper: Click here for the whitepaper.
What Is Holo (HOT)?
Holo is an open-source platform for fully distributed and Peer-to-Peer applications. Built on Holochain, the platform uses the Distributed Hash Table (DHT) system instead of Proof of Work or Proof of Stake algorithms to go beyond usual blockchain designs and provide a customizable framework that aims to overcome problems such as scalability. Holochain has a much more decentralized concept and architecture as an alternative to blockchain. Although the system’s native token, Holo (HOT), has been in circulation since 2018, the system is under development.
This review will evaluate Holo (HOT) with a focus on Holochain.
What Does Holo Offer?
Blockchains require consensus, and every block is verified by all validators on the network. This poses a huge scalability issue and slows down transactions while raising transaction fees. Holochain has a distinctive design, which is based on a mechanism where all transactions are stored in the same way for the whole network to reach a certain consensus. In this design, “actors” keep their own history records in hash-chains and these inputs are passed from validator to validator without intermediaries. Thus, Holochain proposes an “actor-centric” alternative to the common blockchain design and its “data-centric” approach. Instead of the principle that every activity is verified by everyone, a system is proposed in which each actor keeps its own record and only a limited part of it is recorded on the public blockchain. Holochain aims to achieve both complete decentralization and build a network that is thousands of times more scalable than Blockchain Technology.
Now, let’s look at the difference between Holochain and Holo. Holo is a hosting platform and marketplace where hosts host applications and websites developed on Holochain and make them available to internet users. The company behind the Holo compares this system to Airbnb’s hosting service and states that anyone can become a host and earn income through their computers. The applications developed on this platform are called hApps.
Hosts can redirect idle computing power from their computers running Windows, MAC, or Linux to provide a simple soft hosting service and earn tokens called HoloFuel in return. Users can also earn HoloFuel by providing hosting services without even a computer, as long as they have an internet connection and a device called HoloPort, which consumes a small amount of energy (15W–45W).
Thanks to its distributed storage service, Holo enables the development of applications that are much faster, more cost-efficient, and secure compared to both built-in cloud storage services and widely accepted blockchain-based services. Therefore, an application such as Facebook, Twitter, TikTok or Instagram can be developed much more efficiently on Holochain. Holo, where large corporate companies and SMEs can easily continue their activities thanks to DHT even when there is no internet, aims to build a bridge between the internet and Holochain by enabling these businesses to offer their services through an HTTP website.
Holo’s Technology
On Holochain, each application communicates within the framework of common rules using a Distributed Hash Table, but it also has its own rules called DNA. Users have hack-resistant storage, or hash-chains that are unique to their hApp. The information recorded here is also published in the Distributed Hash Table, which is designed to be a public space like BitTorent with a set of common validation rules that enable Peer-to-Peer data sharing between validators.
This is how Holochain works in the case of an app like Twitter built on Holo: User types a message. His mobile phone cryptographically signs the message and saves a local copy. The user saves this signed message in his own registry and shares it with several random devices that use the same app. Each device validates the message according to its own DNA, that is, its own unique application rules. If valid, the message will be marked as valid and signed. In this way, the message turns into a tweet. The authenticator produces backup copies of the message through a process called "gossip" and shares them with other devices. Other devices similarly verify the message against their own DNA.
If the message violates any rules, it is rejected. Similarly, if one device detects that the other has confirmed such data, it blocks that device and sends an encrypted alert to other devices. That device is then added to the blacklist. In this way, the system ensures efficient data sharing without compromising security.
The efficiency of this system lies in a dictionary-like index it creates to find any data, rather than looking everywhere to check a single piece of data like in the blockchain. For example, if a user wants to search for the word “portfolio” in the dictionary, he will look up the letter P, which in a sense is the “key” to that word. In the Distributed Hash Table, each data and device has its own key. In this case, the user asks questions to the devices he knows to find the one with the key that most closely resembles the one he has. If devices he knows don’t have this key, they may know a device that does.
When storing data, the key to the data is similarly calculated and shared with devices with similar keys. So, each device is both a user and a storekeeper and has information about other devices around it. Therefore, even if a device is offline, its neighbors will be able to take its place.
For example, a user who knows that he needs to look up the letter N to find the definition of the word “nicety” can ask the user who has the key to the letter P, which is close to the letter N, if the letter N is not in his neighborhood.
The image below shows the three scenarios we have mentioned. At the center of the image is user M and the neighborhood whose data he has.
In the first scenario, the user asks the meaning of the word “nicety” to user P, who is near the letter N and stores a copy of the data of the letter N.
In the second scenario, the user who wants to store the meaning of the word “guarantee” sends it to user H, who is closer to that letter, and asks him to store it so that anyone who wants to get to the letter G, doesn’t have to look far for the answer.
In the third scenario, user M, who is searching for the meaning of the word “colloquial” cannot find it in his neighborhood and asks user A, who he thinks has more information about the relevant part of the Distributed Hash Table. After user A answers that C has the answer to the question, user M receives the answer by asking the question to C, who is the real addressee of the question.
The Holo Team & Company
The project was started in early 2016 by Arthur Brock, a businessman experienced in system architecture, and Eric Harris-Braun, a Computer Engineering graduate from Yale University. Although the Initial Coin Offering (ICO) of the project’s native token, HOT, took place in May 2018, Holochain’s closed alpha tests on the testnet began in March 2019.
Holo’s Digital Asset Economy
Holochain’s native token, Holo (HOT), is an ERC-20 token whose ICO took place in 2018. As a result of demand-driven distribution a total of 177.6 billion tokens were distributed, 75% (133.2 billion tokens) to users and 25% (44.4 billion tokens) to the team and company.
As of this writing (April 26, 2021), there are 169,164,199,065 HOT in the market with a total value of $2.35B. HOT, whose price was $0,0006 in January 2021, has risen tremendously to $0,014. HoloFuel, the payment tool vital to the operation of the system, is currently under development. HoloFuel, which is planned to perform billions of micro transactions per second, will be used in hosting service payments. Once launched, users will be able to exchange their HOT tokens with HoloFuel. HOT will continue to serve as a link between the Holochain ecosystem and the crypto world.
Holo Collaborations
Holo’s partnership with decentralized finance platform Orion, one of Holo’s many partnerships, was established in August 2019. Orion, which aims to enable smart trades by collecting liquidity in the entire cryptocurrency market and offering the best prices, will be Holochain’s partner in adding trading and digital asset platform features to Holochain.
In September 2020, Holo announced a collaboration with the AllianceBlock Protocol, which describes itself as the world’s first globally compliant decentralized capital market. AllianceBlock, which aims to carry out securities transactions through smart contracts within the framework of current legal regulations, announced that it will establish a decentralized data sharing structure using Holochain’s distributed hash table design.
Evaluation of Holo
Holochain has introduced a unique mechanism to bring blockchain or cloud-based data storage technologies to the most decentralized level possible. The fact that the project has progressed so slowly, yet so well known, is explained by this ambitious vision. Although there have been many community initiatives to date, Elemental, a simple messaging app, is the only hApp developed on Holochain. Despite this situation, Holochain is massively popular. Especially the company’s growth of around 3000% since February and the 400% increase in transaction volume and price increase on the day the company received a patent for the Distributed Hash Table show that the crypto community has great expectations from Holochain. Time will tell if Holochain can deliver on its promises and at the same time continue to attract investors.
The key may or may not be in the user’s neighborhood. Just like in real life, if no one nearby knows the definition of the word, then there will surely be someone in the user's neighborhood who knows or knows someone who knows. In the worst case, even when the Distributed Hash Table is completely saturated, users will be able to access the key they want in a maximum of 22 jumps. So, instead of distributed ledgers that are shared with everyone but confirmed by specific devices, as in a blockchain, here Holo provides a more efficient system where no one dominates, and everyone keeps their own ledger and shares it with their neighbors.
