Last week we looked at Substratum, IPFS, Flixxo, and Brave as being potential saviors of the internet. One token we didn’t look at was Holochain and for good reason, the hype surrounding this project is building Holochain up as an Ethereum killer, and a potential usurper to Vitalik deserves an entire video to itself.
Unlike most of the projects I spoke about last week. Holo has a working prototype and has begun manufacturing what they call Holoports essentially a home-based server node or as they call it a hosting box. For running the box you get rewarded with Holofuel that can be used to make microtransactions on decentralized apps or can be converted into Holotokens (Symbol is HOT). Those tokens can then be sold on exchanges or converted into fiat if need be.
There is a huge amount of hype surrounding this project, is it justified? Will Holo change the internet forever? Is Holochain really the evolution of blockchain technology? Can Holo kill Ethereum and does it even want to? And is this token going to the moon? To find out let’s take a look.
So if you haven’t heard about Holotoken then you’ve probably been taking a break from Crypto trading and investment these last months nursing your wounds and working through crypto counseling, but it’s okay don’t worry I’ll get you back up to speed.
Holo is a project that first surfaced on Indiegogo. Yes a crypto company that didn’t launch with an ICO. It’s developers had spent nearly a year developing the Holochain code and the Holoport hardware with a large group of volunteers. The project then got listed on Indiegogo and capital was raised through backers for the Holoports hosting boxes themselves rather than the token, and only after raising over one million dollars double what they were aiming for did the founders launch their ICO.
This was a really clever strategy. The indiegogo campaign ensured that there was a market for the Holoport hosting boxes and it gave the ICO a solid level of credibility. By selling over 2000 hosting boxes investors in Holotoken know that the project is going to have legs. The Holoport hosting boxes are going to be out there in the wild and running which means the risk relative to other similar projects is lower. The Holo team seem to have a very clear strategy to move the project forward and for investors this is certainly a good sign that increases confidence in the project.
The Co-founders of Holo are also very capable guys. Eric Harris-Braun and Art Brock began working together in 2004 and Arthur has been involved in software design and alternative currency development since the late 90’s. Eric developed a suite of peer to peer applications with his company glassbead software back in the 90’s and has been working on developing cryptocurrencies since 2009. The seed that became Holo was planted in 2009 when the founders began their original company Metacurrency Project. From there they developed a project called Cephr and Holo was the logical step forward, in all their 9-year journey has brought them to this point. As far as experience goes Holo’s team have it in abundance and in the right sectors.
A lot of people have claimed that Holochain is an ethereum killer and if we look closely at the technology, it certainly appears to be a serious competitor. Holochain is it’s own blockchain type technology and it’s developed differently to something like bitcoin or ethereum. Where bitcoin’s blockchain requires every transaction to have global consensus in order for it to be validated Holochain takes what they call an agent-centric approach. Holochains philosophy is that 99% of applications and actions over its ecosystem won’t actually need global consensus to operate. In that respect, Holochain is able to handle decentralized applications quickly and with great energy efficiency, it’s also claimed that it will enable Holochain to scale easily and still be able to securely manage microtransactions.
I will try my best to break down how Holochain works in an easy to understand way:
Instead of a shared global ledger like blockchains, every person has their own local chain that they sign things to before publishing them to the shared DHT. Interactions involving multiple parties (such as a currency transfer between two people) are signed by EACH party and committed to their own chains, and then shared to a Distributed Hash Table by each party. The DHT acts as a validator of the data without it needing to be present on every single local chain.
My initial understanding was that if your application required immutable data centric validation and consensus then you would be better off using something like Ethereum. The team at Holo confirmed to me though that if your Dapp requires global consensus that too can be programmed into it where it requires that all participants in that particular dApp have to agree in order for a change to be recorded on a Distributed Hash Table. Though if your application logic is built only around data centric logic then you may be better off to run it on one of the other blockchain technologies out there as the requirement for global consensus would work against the original ethos of Holochain.
There are two other cases where another ecosystem would be more suitable as well.
If you are looking to stay anonymous and to keep things private there are better alternatives out there. On Ceptr.org they explain that because Holochain publishes to a shared DHT space you shouldn’t assume that your data is private. They explain that in the future applications like TOR may be developed that will give you layers of anonymization but that’s not native to Holochain.
Also If you are looking for decentralized storage it’s recommended that you look at something like IPFS or Storj as these are specifically developed to handle large files, unlike Holochain which is meant for lighter and more agile applications.
The potential risks with this token, of course, are not unique to Holo they go for most projects. In order for Holochain to scale and work it requires a mass adoption of the platform and the nodes. This is being addressed by the team and is the reason they created the plug and play Holoport hosting boxes, the idea being that if this is something anyone can purchase, run and make a return from combined with effective marketing of the company should see the ecosystem grow. One area that could see the platform really grow is in gaming. Games could be deployed on the Holochain and Holoports would act as local servers for multiplayer gaming, in game purchases can be made using Holofuel or converted into in game currencies. Fortnite on IOS generated $2.5 million dollars per day this year so if ever someone was able to reinvent Epic games’ success on the Holochain we’d be looking at mass adoption of the Holochain ecosystem. Yes, it’s a fair way off but the point is the potential is there.
As a technology, I am personally very impressed with Holo and I think their approach to crowdfunding was a clever strategy that has helped boost the project’s credibility even before launching the ICO.
As an investment Holotoken itself isn’t going to make you a millionaire overnight don’t be expecting massive instant gains. I think if you were an ICO investor there are potentially some substantial gains to be made when the Holotokens can start being converted for Holofuel. There are billions of tokens in the supply and this is on purpose. Holo needs the token to be relatively stable as it converts to holofuel and is used to fuel the microtransactions and dapps on the Holochain.
The real value in Holo is the Holochain itself. As a developer, it’s a new efficient way to distribute your app and with Holo’s team looking at ways for developers to run ICO’s on the platform there is serious potential there. I believe that developing a dApp or running the Holoportal boxes for the ecosystem is where you will see the greatest returns but either way you are supporting what is shaping up to be a game changing, Bitcoin and Ethereum may have led the way and brought Cryptography into the public conscience but Holo looks like it will be the technology to bring it into their homes.
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Disclaimer: CryptoPig content is written by a team of blockchain passionate people. We are not registered as investment advisors. Don’t take the information in this post as investment advice and make sure you do your own research before investing. Cryptocurrencies are a very risky investment, never invest more money than you can afford to lose.