There is a video link below for those who prefer an audio version

Today we’ll be taking a look at Holochain. Holochain is decentralised project, but it is not Blockchain. It’s a new technology that is claiming to be better than Blockchain with no bottlenecks to scaling. Is it really better than Blockchain? To learn more, keep reading!

The first generation Blockchain, which was bitcoin, achieved decentralisation by having a network of nodes, and every transaction was processed and stored by every node. The entire process was very secure, but also very slow.
This is first generation way of doing things, its not sustainable, everyone recognises that and we are currently already in third generation Blockchain technology and doing things much better. Holochain also identifies the unsustainable nature of Bitcoin’s technology and tries to improve on it. But rather than create a better Blockchain which would make it a third generation Blockchain project, it uses what is known as Hashchains.

Hashchain is actually an old technology that has existed before blockchain technology.

Think of a Hash as a signature mark that verifies data at a particular point before more data is added, so like a save function.

And as more data and hashes get added it eventually builds something like a digital fingerprint. And that’s what a hashchain us.

Now imagine that each of these green dots are a hashchain. You will notice that unlike the Blockchain diagram, they are not linked to each other. Meaning they are not built on a motherboard like Ethereum, Hashchains exist independently.
Also, because hashchain itself is also a validating technology, each node or “Hashchain” doesn’t need the concensus of others to process data. In other words, it doesn’t need to interact with other hashchains to confirm the data.

This is different from Bitcoin where all the information is processed by all the nodes and confirmed by multiple nodes before being recorded, making it a decentralised process.

Holochain’s processing at a systemic level is centralised, meaning that the data is processed only on one hashchain. And if a hacker was to come in, to alter the data being processed, a hacker wouldn’t need to hack all the hashchain, just one.

There is still decentralisation process that happens within the Hashchain,, but it doesn’t happen at the processing level, it happens at the sharing level and we will talk about that later.

Now the advantage Hashchain has by not relying on the other nodes is scaling. The whole difficulty with Blockchain and scaling is because people want the advantages of decentralisation which are things like security, fairness etc… The difficulty is achieving decentralisation whilst scaling. If I decide as a system that I don’t want to have concensus at a system processing level, then for that particular step, I have no bottleneck or restriction. That is why Holochain theorectically has no scaling limit.

Think of it this way. Coming back to the green dots that exist independently. Let’s use transaction speed as an example. And this is just an example. But because the project consists of independent chains, there is no latency. So the theoretical total transaction speed of the Holochain platform is the total transaction speed of all the independent chains added together. So if they have 10 chains at 10,000trx/sec, technically speaking it is not wrong to say that the system is running at 100,000trx/ sec. But the actual experience of transaction on each hashchain has not actually increased 10x, it is actually still the same. As opposed to lets say Bitcoin where every node is linked together, and if we said scaling solution had increased Bitcoin’s transaction speed from 6trx/sec to 6000trx/ sec, it means every node on Bitcoin’s network would experience a massive boost in transaction speed because they are all linked and the speed of Bitcoin as a platform is truely reflective of the processing power of every node.

Let me give you a real life analogy. Let’s say I do a transaction on Bitcoin today and it takes 10 secs. If Bitcoin transaction speed increases by 10x, it would mean that my transaction will now be 10x faster meaning 1 sec.

If I am doing a transaction on a hashchain and it takes 2 secs. One year later, because a lot of projects have added on to Holochain network, the Holochain network total processing power has increased 10x, but for me as a user, my experience of my transaction is still 2secs.

So technically Holochain as a network may have infinite scaling because you can build as many chains as you, and is chain is responsible for itself and doesn’t weigh on the infrastructure. But its doesn’t necessarily mean that each individual hashchain has scaling. Can each hashchain increase its own processing power and speed up? Yes it can. I will come to that later.

The reason why the system is designed this way is philosophical. If you understand the Holochain project, you will understand the team behind it is very big on lifestream philosophy. So they designed the technology trying to mimic after how life happens in nature nature. And in nature, not every decision needs to be checked. They also give the example that if you were to post a tweet on twitter, it doesn’t need a concensus to happen. So not everything needs a concensus. That is true, but not everything is as simple as a social media messaging app. This setup would work well for a messaging app, but what about a decentralised exchange or data from legal firms or medical clinics? Or what if you were a bank and could choose between two systems, one did concensus and decentralisation at the processing level and also decentralising at the storage level (which is Blockchain) and the other only does decentralisation at the storage and sharing level. Which would you choose? Why are Banks using Ripple technology? Do you really think they would choose Holochain over Ripple? I’m not asking this in a sarcastic way, I don’t know the answer and I’m asking this genuinely with the hope of provoking some questions.

What I am trying to say, everything comes at a cost. The more decentralised you are, the more security you have, but your performance also reduces. Likewise, the less decentralised you become, the better your performance. Holochain may perform better than Bitcoin, but it will never be as secure as Bitcoin.

Holochain does have security features and we are going to look at it now.

So each node has its own security feature called the DNA where each step of the data journey is kept secure and verified with signatures.

The signed data that is recorded on the local chain doesn’t just stay there, it is shared on what is known as the DHT (distributed hash table). Think of this like concensus as we understand on a blockchain, except it is for the purpose of safely sharing data.

So in other words, before any stored data on a local data chain can be shared, it must undergo validating via the DHT.
This concept of using DHT for file sharing is very similar to using Torrents for those who use bittorrent and similar programs. Where the security is not so much on the data but the sharing process.
Holochain models their concensus around human interactions. So rather than being data centered, it is actually agent centered. Let me try to give you an analogy.

So this is a network topology of 5 agents running three different apps. Each app is its own mini network.

Think of these nodes as people who can speak different language. Imagine this is me and I can speak 3 languages, English, Mandarin and Russian and I am linked to the English speaking network, but also the Mandarin speaking network and Russian Speaking Network. Now if a malicious person/ node tries to impersonate me, my friends who are in the same network will recognize he is a imposter and reject his proposed trade. So that’s how transactions in the network is protected.

I will point out one weakness in the system though. The above system works on the assumption that the original source of the data entered the network BEFORE the malicious party. That’s how the other parties in the network know how to recognise a malicious intent. In the scenario where the malicious party entered the scene at the same time as the original source, the system will not be able to validate that transaction because it can’t tell who is the good guy. The chance of this happening is not high but it certainly can happen.

Now because Holochain is a project modelled after natural lifestream philosophy, there is no native currency or token for the project. Because exchange currency as we understand is seen as bad and destroying the world.

You might ask, but isn’t it on coinmarketcap? There is a Holo token with an actual value. There was also an ICO token which could be purchased with Ethereum a Blockchain token.

This is where I need to explain. Holochain is not the same as Holo. Holochain is the open source platform technology we just described above, and it has no cryptocurrency attached to it.

But getting that technology out to the lay person requires an interface. Meaning at some point you need to price the Dapps so that people can purchase it. That interface is called Holo. And Holo token is the currency that runs that economy.

So this is done very smartly. For those who are familiar with the Blockchain projects Theta or Substratum, the concept is similar. So when you run program on your computer, it is likely you have access processing power, bandwidth etc… that is not used. You can sell this extra processing power to Holo, so Holo can use it to basically create its own mini-internet server. You will get paid in Holo tokens.

So this is very attractive and will likely attract a lot of users. The more users an app or hashchain has, theorectically, the more processing power each hashchain has. So that’s how each individual chain can scale and become faster.

I am actually very interested to see if they can develop this technology and if they can do so before substratum. It’s basically the same concept, so Il be interested to compare their final product.

The last thing to mention about their tech is what happens when a node leaves the network.

When people running Holochain turn off their device, they leave the network. Since the data was stored locally, what happens then? Well a piece of the data is given to other nodes so that data is not lost when the node leaves. It’s basically sharding. To understand more about Sharding, refer to our posts on Zilliqa and IOST which are Blockchain projects that utilise sharding.

One thing that crossed my mind, is that given the way they use computers as mini-processors, it is possible that it might shorten the life span of the user’s hard-disk. If anyone has a chance, it might be worth asking the team this.

Also because the data is stored across devices, e.g. your phone and my phone, the system will struggle with storing large data constantly as it will clog up users hard-drives.

Team:

These are some of their team members, I say some because there’s a lot more on their website, a total of 32 members listed and they are currently recruiting more. It’s a well balanced team with devs and finance and marketing/ partnership coordination etc..

Il run through the profiles for the two co-founders on this page.

Arthur Brock—Graduated from Michigan State University with a degree in AI and comparative Religion, some of his more significant employment history includes being CTO of Dream Team Technologies, Founding board member of Mile High Business Alliance, founder of Emerging leader labs, founder of Metacurrency Project and then Holochain and Holo. So definitely someone who knows the decentralised economy scene with a lot of start up experience.

The other co-founder listed here is Eric Harris-Braun who did computer science at Yale and has been a board member on New Economics Institue, he was also co-founder for Emerging Leader labs, as well as Metacurrency project, so these guys have worked together before, tracing back to 2009 at least. Eric is also the founder of Harris- Braun Enterprise and glass bead softwaree. So very experienced programmer and a lot of experience as well in leading the company.

You can go through the rest of the profiles in your own time. A lot of them have been on the metacurrency project as well, so definitely a team that is familiar with each other.

There isn’t any advisors or partners or investors. There also isn’t any roadmap so we don’t really know when their testnet or mainnet is to be expected. These are usually information we expect on a Blockchain project website, but maybe these guys are trying to be different. I don’t really know. But advisors or partners help us to know there’s a layer of accountability that these guys have and also a roadmap helps the investors to know what milestones to look out for but also it provides again accountability that the team is working hard behind the scenes and not taking the fund raising the sitting around.

Their github is actually very active and I don’t know how to examine codes, but apparently people who have taken a look and are impressed. I’m pretty sure the team is busy, but still a roadmap is a reasonable expectation for the community I think.

Price:

The Holo token is an ERC-20token, I wonder why they are using a Blockchain token. I understand they need a temporary token before their mainnet is launched, but I would have thought they would use their own technology for the interim token.

Their pricing is very attractive. The token price is $0.0016 (0.1 cents) but that’s because their circulating supply is very high 133 billion tokens. In fact I think their circulating supply should actually be the same as their total supply which is 177 billion. For some reason its listed as 25% less. So the price may drop abit if that is corrected. But nonetheless, it is doing very well. It has a marketcap of $223 million and is currently ranked number 88 (so top 100) on the market.
I think there is a lot of hype for this project and it is probably going to increase. There’s a lot of romantic idealism floating around where people are claiming it will scale to 1 billion transactions / sec, it is better than Blockchain in every way, it has no weakness etc… I don’t think that’s entirely true, but nonetheless people are going to get excited and buy into this coin. The crypto market currently is not driven by actual worth but hype. So short term I think this coin will go up.

Long term, who knows. It’s a new technology, and like all new technology no one can predict whether it will actually work or not. I believe that Holochain will get off the ground, as in they will be a working open platform for decentralised apps. I’m not sure how they will compare with Blockchain moving forward. Every video I’ve seen of theirs has had them comparing with Bitcoin and Ethereum which are first and second generation Blockchain projects. If I was to take 200 blockchain platforms today, 198 of them will be 3rd generation Blockchain projects, the two that are not are Bitcoin and Ethereum. So 99% of current Blockchain projects are better than Bitcoin so why compare yourself against the 1% Bitcoin which is outdate and then claim that you are fixing Blockchain? Bitcoin as a technology is almost dead these days, and if it was to "die", the technology that would have killed Bitcoin was not Holochain or Hashgraph, it was Blockchain itself. The Blockchain technology is evolving so rapidly. These days, new blockchain projects are being compared against other 3rd generation projects like Cardano and EOS, and the likes who have new novel and smart technology. There are new concensus algorithms in the Blockchain space like DPOS and proof of believability that don’t use a lot of electricity or slow the system like Bitcoin days. Also as I said before, Blockchain technology is decentralising at both the system processing and the storage and sharing level. Holochain is only decentralising at the node level and storage/ sharing level. It works quick and fast for things like a messaging app, but do you really think an institution with large transaction volumes like a bank will choose Holochain over Ripple? And this is not a discussion about using a centralised organisation, this is about whether the technology can support the high level of volume and large data and security required.

So I feel that by generalising Bitcoin as blockchain, Holochain in all its videos so far has made itself look good, but I would love to see them give due recognition to 3rd generation Blockchain projects and the whole “every transaction processed and stored fully on every node is not sustainable” is so old, we’ve moved past that a while ago. And I would love to see them go head to head with Cardano for tech and philosophy or EOS for scope, or a Blockchain and AI project like Matrix or a Blockchain and hardware project like HPB for scalability. They use sharding but so does Zilliqa and IOST, they want to create a decentralised internet, but so does Substratum and Theta is doing the same but with bandwidth. They will have some features that those projects will not have, but those projects will also have features they don’t have. It is hard to say that one is definitely better than the other.

So my personal opinion, and this whole post is not professional advice, it’s just my opinion and I could be wrong. I think Holochain is a new and smart way technology. I think it will be better than Bitcoin, but that doesn’t necessarily equate to being better than Blockchain. I don’t think it’s as perfect as some people think it is. In fact I think there are several 3rd generation Blockchain projects currently that are comparably to it, and this is 3rd generation only. Blockchain technology is developing so rapidly, 4th and 5th generation technology will be even better.

But fundamentally, I don’t disagree with Holochain finding an alternative solution to decentralisation, in fact I cheer them on because I believe there is more than one solution to a problem and Im glad they’re thinking outside the box. What we all want at the end of the day is decentralisation. So I wish the team and everyone who supports them all the best.

So that’s my thoughts on Holochain guys, let me know what you think of Holochain, and post it in the comments below so that everyone can read it. We are very open as a community that way. I’m also honestly curious as to what people think of Holochain.

I hope you found this post helpful. If you did, hit that upvote and follow. D

That’s all from me for now, take care guys, have a great day and we will catch you next time!