holochain-logoWhat is Holochain – Beginner’s Guide

From promoting decentralized banking and replacing traditional payment systems to facilitating the development of supercomputers, the crypto sphere has definitely not been lacking in ambition since Bitcoin was introduced in 2009.

Most of the innovative projects and developments in crypto over the course of the past decade all have one underlying technology – the blockchain technology.

Blockchain is revolutionary and fintech experts believe that long after the cryptocurrency bubble is over, the blockchain technology will still be around.

However, there is a new player in town and it’s called Holochain.

Conceptually, Holochain is somewhat similar to the blockchain, but it is not it.

In this article, you will learn what Holochain is all about, the fundamental differences between Holochain and the blockchain, the team behind the project as well as the pros and cons of the concept itself.

question-iconWhat is Holochain?

In the most basic sense, Holochain is simply an open-source framework for creating and developing decentralized, peer-to-peer applications, known as dApps.

On Holochain however, these applications are known as hApps.

While Holochain may seem like a relatively new project, by crypto standards, it has definitely been around for a while.

The roots of the Holochain project can be traced back to MetaCurrency, an economic solutions project also developed to offer support for open source distributed computing networks.

The goal of Holochain is to build a “uncloseable” and sustainable decentralized system to facilitate peer-to-peer interaction.

While a lot of ambitious blockchain projects claim to be autonomous and secure, the truth is that a completely secured, autonomous and decentralized system for agency is not available today.

This deficiency is largely because the blockchain, the underlying technology is these systems is unable to meet these needs.

It was for the sake of addressing these deficiencies that Holochain was created.

Holochain is an “agent centric” network — in other words, complete user autonomy is a core element in the architectural structure of the computing network.

scale-iconHow does Holochain differ from Blockchain?

While Holochain is positioned as an alternative to blockchain, it is pertinent for you to understand that they aren’t exactly the same thing.

Granted, they share certain similarities in that they are both distributed network technologies that provide a infrastructures for creating and developing decentralized applications.

However that is where the similarity ends.

So how does Holochain differ from Blockchain?

enter-iconDifference 1: Data storage

The blockchain methodology is plagued with a lot of deficiencies, one of such problems is how data is stored on the blockchain database.

This is how it happens; every transaction/interaction carried out on the blockchain is added to the permanent database.

This data is called a block and blocks are added in a chronological order to form one long chain of blocks from multiple transactions.

On Holochain, instead of blocks, what you have are distributed hash tables (DHT).

Here, new data isn’t added on top of a previous one to form a single long chain of blocks. Instead, the database is made up of shorter chains all interconnected to one another.

But why are the chains shorter? That brings us to the another differentiating factor between Holochain and blockchain; the consensus protocol.

register-iconDifference 2: Consensus protocol

Before each block can be added to the permanent database of the blockchain, it must be verified by every node in the network in a community consensus protocol.

Beyond that, every node on that network also holds a full copy of the blockchain.

This has helped to maintain the integrity of blockchain systems as there is no centralized server where data can easily be manipulated or deleted.

Now, while the methodology of the blockchain seems quite secure, is it really necessary? To illustrate, the Bitcoin and Ethereum blockchains have about 30,000 and 25,000 nodes respectively.

Let’s say Bob sends some money to Alice, is it really necessary for over 20,000 other nodes completely unrelated to the transaction to know about it and verify the transaction?

That being said, Holochain uses a consensus protocol where finality is reached only where it is needed.

Here, only the nodes involved in the interaction would be needed to reach a consensus. Just Bob and Alice in this case.

Essentially, there is no global consensus and local nodes only need to know about their state.

This consensus protocol creates data in localized clusters which forms the short interconnected chains.

market-iconDifference 3: Scalability

The global consensus feature of the blockchain is not energy efficient among other scalability issues.

Each node in the network to require verify every interaction, which means more data on the blockchain.

More data on the blockchain could result in longer lag times to process transactions, higher network fees and other determinants capable of creating the so-called blockchain bottle neck.

Holochain solves this scalability issue by keeping data in localized clusters. Essentially, nodes do not have to keep a copy of the continually updated record of the database.

The Holochain system uses a distributed hash table (DHT) to verify and keep a record of the data generated by each individual node.

This way, even if a node goes offline, the network is not impacted as there is no data loss to the public database

development-iconDifference 5: Distributed Applications (dApps)

Both Holochain and blockchain create framework to develop and run distributed apps (dApps).

Holochain makes a good fit for dApps that make use of huge amounts of data where every individual can also access the inputs.

Social media networks, collective intelligence projects, supply chain management and other dynamic peer-to-peer platforms would run efficiently on Holochain.

Blockchain on the other hand would work better with dApps requiring anonymous and private datasets, applications that host large files and most cryptocurrency networks.

Difference 5: Mining

Most blockchain based systems like Bitcoin use the energy consuming Proof of Work mining algorithm.

Holochain offers a more efficent approach to mining — it doesn’t require any mining component and the energy consumption is minimal, similar to what the nodes (computers) would use in their day to day operations.

hierarchy-iconMeet the Holochain Team

The Holochain project is the brain child of Arthur Brock and Eric Harris-Braun who are the creators and co-founders of Holochain.

While Arthur Brock is the Chief Architect of the project, Eric Harris-Braun is currently serving as the Executive Engineer of Holochain.

Like earlier mentioned, Holochain is by no means a “new” or “recent” project.

Both co-founders started the ground work on Holochain even before the Bitcoin whitepaper was published and have an extensive knowledge of AI systems coupled with over three decades of experience in the field of programming.

The full list of the team can be found here.

The Holochain project is run by non-profit foundation in Singapore known as the Internet of Service Foundation (IOST).

IOST is managed by an excellent group of software developers, blockchain experts and other tech enthusiasts.

holochain-iconThe Holochain Token (HOT)

The Holochain network is fuelled by a token unique to the network — an ERC-20 token known as HOT.

The tokens were sold using a crowdfunding technique which the team termed as an Initial Community Offering.

Unlike the traditional Initial Coin Offering (ICO) where cryptocurrency assets are sold in exchange for more established currencies, in the Initial Community Offering of HOT, the team sold hosting credits which would confer stakeholder rights in the project to the contributors.

At the end of the month long ICO which ran from the 29th of March 2018 to the 28th of April 2018, the project raised a total of 30,000 ETH.

Following the ICO, the coin traded at $0.002 for about a week before deflating.

On July 23rd 2018, HOT was listed on Binance exchange. The Holo token benefited from the “exchange effect”, a term used to describe a quick price surge in the value of a token when it is listed on a cryptocurrency exchange.

The value of HOT went up to $0.0001 from $0.0006 within 24 hours of being listed on Binance.

As of 9th of December 2018, HOT tokens were trading at $0.000493 USD with a circulating supply of 133,214,575,156 HOT tokens.

Holochain currently has a market capitalization of nearly $115 million making it the 62nd most valuable coin by market cap.

The tokens are currently available for purchase at Binance, the main exchange for trading HOT. 

It can also be purchased on other exchanges such as IDEX or Radar Relay.

They can not be purchased directly with fiat money meaning you would need to first acquire some BTC or ETH if you do not have it already.

Once you have made the purchase, you can easily store your HOT tokens in any ERC-20 compatible wallet like MyEtherWallet, MetaMask and Coinomi.

It is also supported on hardware wallets such as Ledger Nano S in case you need that extra layer of security provided by offline storage.

Unlike most cryptocurrencies, HOT is asset backed. The token is backed by computing power which is largely responsible for a stability in the value of the tokens as well as its potential to increase in value.

Users on the network will be incentivised with Holochain fuel for hosting apps for mainstream users as well as for sharing space and computer power.

When the Holochain mainnet is launched, the ERC-20 HOT tokens will be swapped for Holochain fuel on a 1:1 ratio. Basically, if you currently hold let’s say 50 HOT tokens, when the Holochain-based application is launched, your 50 HOT will be worth exactly 50 Holo fuel.

vHolochain Pros 

  • Holochain has a very efficient technology different from the traditional blockchain.

  • It is faster and more scalable with a lightweight architecture that supports node compatibility with low capacity devices such as mobile phones.

  • Holochain comes with the necessary tools and documentation to aid developers who want to develop and run their apps on the platform.

  • The technology is completely enormous in scope and it has evolved to meet the needs of modern decentralized solutions.

  • The sheer amount of research and development the team has put into the Holochain project is absolutely impressive. The Github is very extensive and active with about 27 repositories from over 20 contributors.

  • The Holochain project is completely agent-centric. In other words, the architecture is very user oriented, not just on the data the users contribute to the network.

Holochain cons

  • There is little to no marketing about the Holochain project especially when compared to the publicity received by similar projects.

  • The price of the Holochain (HOT) Token is very volatile. One, there is no hard cap on the maximum token supply. The team plans to regulate the token supply to meet the requirements of the network.

  • The project team is still expanding and actively recruiting new members for the technical team. While this is not exactly a bad thing, for such an ambitious project, the team could be better organised.

  • The team failed to meet their original milestones in the roadmap for Q2 and Q3 (the Alpha 2 launch and Alpha 3 launch respectively).

    These missed milestones raised a lot concern among users, investors and stakeholders on the network.

    To mitigate the consequences of such concerns, the team had to revise and update their roadmap.

    Failing to meet milestones is not something that usually sits well with the crypto community.

  • Holochain’s hardware manufacturing could end up being a bottleneck when it comes to promoting bandwidth for the project.

alternative-iconThe Holochain Roadmap

In March 2018, the Holochain team published a “Green Paper” containing a detailed and comprehensive review of the different aspects of the Holochain project, one of those being an extensive roadmap.

The original roadmap from the Green Paper had to be revised in August 2018 with new and updated milestones when the project was unable to reach its quarterly goals.

The first and second quarters of 2018 was focused on crowdfunding and the initial community offering of Holochain.

In the third quarter, August 2018 specifically, development was geared towards the release of Holochain Rust Alpha 1 and a demo hApp.

In September 2018, the Holochain Rust Beta 1 was released and made available to Indiegogo supporters who participated in the pre-ICO and by October 2018, HoloPorts were shipped to hosts and investors as planned.

There’s still a substantial amount of development yet to be carried out. The DHT parameter adjustment is yet to be introduced, Holo fuel is yet to be used in a transaction, a Beta release is still underway as well ass the launch of hApps and the App Store.

Holochain is also looking to surpass the number of Bitcoin nodes by the end of the first quarter of 2019. There are also plans in motion to run Holochain on 20,000 host devices.

The achievements of the project so far speaks to a viable and credible ecosystem.

Nevertheless, the team must strive to deliver on its milestones in the updated roadmap if it is to regain critical support of users.


The Holochain project is without a doubt one of the most promising projects in the crypto sphere at this moment in time.

Although there have been delays in the project especially pertaining to the release of major features, the Holochain team has nevertheless maintained a remarkable level of transparency to keep the community updated on the progress in development.

There is no certainty concerning how successful Holochain will be but if you are interested in developing hApps, then you would be pleased to know the platform is ready and gives you a huge amount of flexibility to create your own rules (consensus) for your applications.

It will definitely be interesting to see how Holochain takes on the blockchain which has dominated for nearly a decade.

Let me know what you think about Holochain yourslef!

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Disclaimer: You should do your own due diligence, research and analysis before you invest any money in cryptocurrencies. Cryptocurrencies are highly volatile and classed as high-risk investments. You should never invest any money unless you’re prepared to lose your capital. The author of this article holds the said assets and might be biased towards them.

One Reply to “What is Holochain – Beginner’s Guide”

  1. Correction: the holoports have not shipped to funders yet. They are currently in testing and the components are being revised to meet regulatory standards in several national jurisdictions. The production is considerably delayed as they were originally promised to ship in May 2018, but I’m not surprised as their original timeline was ridiculously optimistic.

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