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Holochain Review and Analysis (HOT)
Visiting Holochain’s website you’re greeted by a 4.5 minute video. There’s a bit of cheesy music but the team clearly lays out what it calls an “ethical ICO”. They also whitewash the ICO “Initial Coin Offering” term with the term “Initial Community Offering”. This could be a bit of fancy marketing but it comes off sincere nonetheless. They hit all the right talking points in regards to:
- Seeding their network with widespread distribution
- Preventing a few powerful token holders to take over the network
- Focused on build a useful product to a burgeoning community
Cool, let’s move on with the review.
What problem are they solving?
The estimated revenue for cloud hosting in 2017 was over $250 billion dollars. Large enterprise companies such as Amazon and Google dominate the cloud computing industry. Holochain is attempting to create the infrastructure to run distributed apps (dApps). We’ve seen a few crypto companies take on the problem of decentralized web services: Dadi and SONM. We’ve seen Ethereum, Neo, and a slew of others offer blockchains as a solution to run dApps. Holochain is not blockchain, but a technological offering that takes concepts from it and stitches on distributed hash tables (DHT) and custom data validations to enable a different mode of distributed computing.
Holochain chain has been around for a long time by crypto standards. If you look their GitHub you’ll see a massive repository. The primary directories to look at are MetaCurrency, Ceptr, Holo, and Holochain. If you look at the team’s backgrounds you’ll notice MetaCurrency has been around since 2008. The MetaCurrency Project is a think tank working on new economic solutions and in support of the open source distributed network technologies, Holochain and Ceptr. This project may not have started out as a backbone for a decentralized internet, but it surely had evolved side by side as cryptocurrencies exploded. The technology matured at the right time in my view.
MetaCurrency is the root. Ceptr is their native operating system. In turn, Holochain derives from Ceptr. Holo is the first real world application built atop Holochain. Rome wasn’t built in a day, neither was Holochain.
This is new for us, as this post is not a blockchain project review. That’s because Holochain is not a blockchain, but rather a blockchain alternative to enable distributed applications. It begs the question, “does every dApp need a token based distributed ledger?” If not, Holochain may be an attractive alternative to dApp developers. Before diving into the tech, let’s look at the token metrics.
Token Metrics and Sale
Holochain hosted a crowdsale back in December 2017 to fund the manufacture of hardware nodes required for hosting and processing data on the Holo network. Essentially, these hardware nodes make it easy for anyone to become a node without knowing how to set up their own cloud host. The hardware owners who keep these devices running will earn Holo Fuel (the token on the network) for performing the act of keeping the network up and running (hosting data, etc.).
ICO (let’s use their term, “initial community offering”
- Dates: March 29, 2018 to April 28, 2018
- Token Standard: Participating in ICO will give purchaser an ERC20 token
- Token swap: Upon launch, these ERC20 tokens will be swapped on the Holo network for their native Holo Fuel token.
- Hard Cap: €25M
- Total supply: To be determined. Their original sale is targeting 250M Holo tokens (HOT) to be sold. If they sell out completely, then an additional 33% will be created for the team. All purchasers combined will own 75% of the network.
- Additional notes: The sale will run for a number of days with an opening supply of €2.5M supply. This amount may adjust daily.
- Arthur Brock, CEO: serial entrepreneur and consultant building incentive systems for a variety of applications. If that’s not the quintessential background needed for decentralized systems with incentive mechanics, I don’t know what is.
- Eric Harris-Braun, executive engineer / co-founder: co-founded MetaCurrency with Art. Serial consultant/contractor building applications. Eric received a B.S. in Computer Science from Yale University.
The team is really large on the website. I assume many of the individuals listed are part-timers, contractors, or advisors. For brevity, I highlight the technical oriented team members. I am interested in how project funding will coalesce the team together as they are quite distributed and has a distinctly consultant/contractor vibe to it. Let’s keep going.
- Nicolas Luck, Core developer and software architect
- Raymond Powell, Programmer
- Robert Best, Data Analytics Lead. He has a background in mechanical engineering so not sure how this makes him a data analytics lead. I suppose math is math and his degree had a ton of statistics courses along the way.
- Phillip Beadle, Holochain Engineer. Long history of consulting in software design and project management.
- Connor Turland, Developer Training
- Sam Cooley, Dev Ops
- Samuel Rose, Dev Ops
- Mamading Ceesay, Dev Ops
- Recently hired:
- Damien Doute
- David Meister
One thing you notice as you comb through everyone’s profile is a strong sense of spirituality and ethics in how they position Holochain. It’s very unconventional compared to other projects. Many of the team members at Holochain are independent contractors and consultants in their respective fields. Typically, other crypto projects will try to max out the number of big name companies in their experience or bring on a “star” advisor to bring more attention to it. Holochain is just different at every turn. The more I dig into the project the more interesting nuggets I find.
There’s also a really strange array of positions on the website. There’s a filmmaker, a musician, and a people/culture coordinator. I don’t get it but I’m glad the humanities and arts provide depth to the team.
If it’s not Blockchain, what is it?
We’ve mentioned it before. Holochain is not blockchain. In blockchain, each node strives to have the same, latest copy of the distributed ledger. Blockchains also have the dubious distinction of extremely high costs for storage and low scalability. Holochain attempts to break down those barriers in order to make it cheap for app developers and fast for their products to run. Holochain is different from blockchain in that it attempts to be a lightweight architecture where even mobile phones and other low capacity devices can run the network. To see why Holochain could be a great alternative, let’s look at the largest smart contract enabled blockchain out there, Ethereum.
On Ethereum, every smart contract is run through the Ethereum Virtual Machine (EVM). If your application is a game, you’re application is also stored in the same place where an insurance application is stored. Everything is stored onchain. As an entrepreneur I would hate to have my application bogged down by apps completely unrelated to my business. Developers are creating workarounds where offchain solutions are used to support more complex applications and transaction volumes. With code sitting onchain, developers are pressured to develop projects with very little margin of error. From my experience, projects are often released knowing their will be issues. These bugs will be corrected with frequent releases of updated code.
Holochain is decentralized in that there are distributed nodes, especially since they sold hardware devices ahead of their go-live. In Holochain, each node can hold its own ledger. One ledger with Node A may be different from Node B. If Node A needs to share its copy to the network, consensus will need to be reached. Holochain’s consensus can be viewed much like Git (a distributed version control system). In Git, all changes are organized in a chain via cryptographic hashes (okay sounds like blockchain so far). In this system, if you trust the latest hash, you can figure out all the previous information (or pieces of it if you don’t want the whole enchilada) from any information source – and verify it is valid. This system enables distributed storage and data integrity validations.
Bitcoin and Ethereum do the same thing. So where’s the difference? In Bitcoin and Ethereum, everyone strives to work on a single branch. In Bitcoin’s case it chooses the longest chain and sends that copy to the rest of the network. When disagreements occur or software patches made, Bitcoin splits – or “forks”. In Bitcoin, you cannot “merge” forks since Bitcoin is essentially the longest chain – or largest branch of a Merkle Tree.
With the Git approach, the longest chain does not matter. Content does. Blockchains such as Bitcoin care about the largest branch, not the content contained within. So what does this mean in laymen’s terms? If a codebase was worked on by multiple developers, programmer A may make update A. Programmer B works on update B at the same time. If there is no conflict between Update A and B, then they can merge together into the repo. Or Programmer A may decide not to integrate changes into the community Git but instead keep it local for proprietary reasons. The same thing happens in Holochain. Let’s say dApp A is run on the entire Holochain network, but dApp B decides it only wants to run a certain cluster of nodes. Both dApp A and dApp B can do just that. Dapplication A interacts with the shared distributed hash table (DHT) while dApp B does not.
The result is a system where data does not need to be shared to everyone. What happens on dApp A does not need to be broadcast to dApp B and C, etc. If John were to message Sally on a social network, Jorge would not need to know about it. Applications such as chat messengers, payment channels, and collaborative document technologies already have these features. The only difference here is these programs would be decentralized rather than running through Facebook or Google. The applications are run entirely by the people who use it – no corporate web servers needed.
- Holo already raised funds for its hardware sale. A portion of these funds will be used to provide enablement and onboarding services for developers. If you’re a developer this basically means you will be able to learn from the Holochain team in person, app design consulting services, and software tool kits to accelerate development.
- The infrastructure sale essentially pre-seeded the network prior to its mainnet launch. I can see a future where blockchain programs will cede hardware development (since most projects may not have firmware/hardware engineers on staff) to partnership agreements with hardware manufacturers. Imagine walking into Best Buy and the computer you’re about to buy comes with a sticker saying “mine X-coin or host a node by purchasing this computer”.
- Their “Git”-like consensus approach is more aligned to how applications are constructed today.
- This is not really a negative point but rather a question, will software updates automatically push to the hardware devices
- Holo fuel is pegged to a market economy mechanism for a host’s computational resources. How will Holochain deflect economies of scale? Won’t we end up with the same situation of cloud computing we are in now where companies who achieve economies of scale push the price of Holo fuel low enough to crowd out smaller players?
- Will Holochain’s hardware manufacturing be a bottleneck in enabling bandwidth for their network?
- Proof-of-Work secures Bitcoin extremely well. What does security look like in Holochain? I did not dive into this subject at all. What types of attacks are we likely to see?
Holochain looks promising. It stands out from SONM and DADI in that it will provide high touch (in person basically) training to would-be network developers and pre-seeded its network with presale for its hardware devices. Beyond standing apart from decentralized cloud computing, it’s taking on blockchain itself as a crowning architecture of decentralized computing. If it succeeds, it will be cheaper and faster blockchains in general. Using a Git-like consensus schema allows apps to be standalone (much as how sidechains are to rootchains). With every node not needing to keep a cumulatively, growing ledger it is solving the “expensive storage” cost problem. The concept is unique and sound. The only thing I question is how will this team coalesce from a group of individuals who are strong, independent contractors and practitioners in their field to a finely tuned team that will meet the needs of enabling its envisioned ecosystem.
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