Holochain is BitTorrent + Git + Cryptographic Signatures + Peer Validation + Gossip.
Holochain apps are versatile, resilient, scalable, and thousands of times more efficient than blockchain (no token or mining required). The purpose of Holochain is to enable humans to interact with each other by mutual-consent to a shared set of rules, without relying on any authority to dictate or unilaterally change those rules. Peer-to-peer interaction means you own and control your data, with no intermediary (e.g., Google, Facebook, Uber) collecting, selling, or losing it.
Data ownership also enables new frontiers of user agency, letting you do more with your data (imagine truly personal A.I., whose purpose is to serve you, rather than the corporation that created it). With the user at the center, composable and customizable applications become possible.
Blockchains turn everything into tokens, whereas currencies are optional in Holochain, working best where issuance takes place through the actions of peers (like ratings), or as double-entry accounting. Other ideal uses for Holochain include:
How does it work? Briefly, Holochain combines ideas from BitTorrent and Git, along with cryptographic signatures, peer validation, and gossip. For more details, check out How does Holochain manage consensus?, as well as the additional resources and videos below.
Holo acts as a bridge between the distributed Holochain apps and the current centralized web. Holo brings access to distributed applications to the familiar web browser by creating an ecosystem and currency that enable distributed hosting services provided by peers.
Holo does to web hosting what Airbnb did to hotels—anyone can become a host by turning their computer into a source of revenue, getting paid in HoloFuel for hosting distributed applications. The Holo software runs in the background, allocating spare storage and processing power to serve hApps to the legacy web. Hosts choose what hApps to serve, set their own hosting prices, and manage their own priorities.
As our flagship application built on Holochain, Holo’s purpose is to make hApps easily accessible to mainstream Internet users. These users might not be ready to install and experiment with next-gen crypto software like Holochain, as most are not overly familiar with distributed web applications. However, by typing or clicking on a URL in a web browser, which IS familiar, users will be able to access hApps in the way in which they are already accustomed.
Holo runs on Holochain—a next-generation framework that is massively scalable, exponentially faster, far more energy efficient, and 10,000x cheaper than blockchain.
HoloFuel is a Holochain-based currency that is a contractual service obligation, redeemable for hosting. HoloFuel is a mutual-credit accounting system capable of performing billions of daily microtransactions. Its primary use is for Holochain application (hApp) providers to pay Holo hosts for their services.
HoloFuel marks the beginning of a new era of cryptocurrencies backed by the capacity provided by people. All of the currency supply is correlated to building and providing the computing power of the Holo network. We always create that value together.
Most cryptocurrencies are modeled as digital objects tracked on a global ledger. With HoloFuel, each user has their own ledger showing their account balance and transaction history. Each transaction requires an agreement between two people, which is then recorded on their respective ledgers and validated by peers in the network.
Mutual credit means that every credit (positive) has an equally matching debit (negative), giving a net supply of zero and a dynamic circulating supply that’s responsive to the actual market behavior of its users.
Credit limits are directly connected to a demonstrated capacity to repay a negative balance by providing hosting resources. HoloFuel is directly redeemable for hosting services. HoloFuel is therefore backed by computing power, a valuable modern asset.
Being asset-backed and having a dynamic supply means that HoloFuel can be value-stable without being static or requiring a peg. HoloFuel can optimize the market value of its units in relation to the cost of hosting, creating a steady and stable trajectory.
The agent-centric design allows for the transactions per second (TPS) to increase the more people use it, mirroring how the English language’s “words per second” increases as more people speak it. Therefore, HoloFuel is scalable for mass adoption.
There is no mining or staking involved in earning HoloFuel—only the useful work of web hosting. Anyone can become a host and be compensated by application providers who want their hApp served to the web.
As easy-to-use dedicated Holo hosting devices, HoloPorts serve as a bridge between the community running distributed Holochain applications and visitors from the web. Owners of HoloPorts can charge fees for their hosting service and earn HoloFuel. HoloPorts come in three sizes—the HoloPort Nano, the HoloPort, and the HoloPort+.
The HoloPort is a plug and play device built for hosting Holochain apps to service mainstream web users.
The HoloPort runs as a stand-alone server with a Linux distro installed, pre-configured, to run/host efficiently. A HoloPort needs Internet service, but it does not need to be connected to a computer.
HoloPort can run 24/7 using very little electricity (15W-45W). It will come with a Holo host Linux image (based on a custom NixOS build) that includes a mobile/web UI to configure with your host settings.
You will need to interface with the Holo admin UI to configure some settings. You can select the hApps you want to host.
HoloPorts are NOT required for hosting on Holo. Anyone can be a host. In the future, you will be able to a) download the Holo Host OS image, or b) download the Holo hApp that can be installed on existing Linux/Window/Mac systems, including low-power computers such as Raspberry Pi and enterprise devices.
Holochain is a framework for creating and powering distributed applications, incorporating peer-to-peer content distribution protocol, cryptography, and hash tables.
Holochain is a data integrity engine in which transactions are immutable and users control their own identity and data 'chain.'
Holo is a marketplace and distributed hosting platform that allows Holochain app developers to have their applications hosted by HoloHosts, thus making them available to everyday users of the Internet.
The HoloFuel app, account, and wallet are all the same thing.
The HoloFuel app functions as your HoloFuel account where your transaction history and HoloFuel balance will be stored. One day, it’s possible that a hardware wallet could support HoloFuel.
Each user will have their own identity, account (‘wallet’), and source chain on Holo; giving you the ability to transact with others and develop a log of transactions recorded to your source chain. The sum of your inbound and outbound transactions in your transaction history determines your current balance.
HoloFuel is like Eth gas. HoloFuel and HOT are designed differently and have different purposes. HoloFuel DOES operate in a similar way as Eth gas, but there are some design differences. HoloFuel is designed to perform billions of daily microtransactions for hosting services. HoloFuel is Holo's native, asset-backed, mutual-credit currency.
Ethereum, Bitcoin, HoloToken (HOT, ERC20), and HoloFuel are cryptocurrencies.
p8: In the future the micro-transaction flows for hosting payments could also undergird a general purpose cryptocurrency payment system in a similar way that “gas” powers the Ethereum transaction engine.
p37: HoloFuel is a unit of account in Holo using value-stable double-entry accounting. The crypto-credit used to purchase hosting in the shared Holo Ecosystem.
When it is released, you will be able to buy HoloFuel through the Reserve Account, third party exchanges, peer-to-peer, etc.
HoloFuel is designed for micro-transactions—millions of transactions at fractional values. HoloFuel is divisible in fractional units. This is an enormous infrastructure to support and has never been done before. Holo will charge a ≤1% fee on all transactions to support building and scaling this infrastructure. Holo will look to decrease transaction fees, maintaining enough revenue to sustain the infrastructure services, after it has scaled enough to meet the expected demand and cost of servicing the infrastructure.
Dynamic supply is inherent in the design of a mutual credit currency, where every credit (positive) has an equally matching debit (negative). The constant interplay between positive and negative accounts determines the circulating supply at any given moment.
This dynamism is critical for HoloFuel to be useful as a medium of exchange. It allows the supply to organically respond to demand in the hosting economy, expanding or contracting as demand increases or falls (see “How does HoloFuel’s dynamic supply work?” for more details).
A currency with wild price movements is good for speculative swing trading, but not for a day-to-day, productive use. HoloFuel is made to be stable enough for normal people to trust with doing business.
Transactions between two accounts with positive balances (or two with negative balances) have no impact on circulating supply. To see why, consider this example:
Fatima and Ellie both have a balance of 100 HoloFuel, representing a supply of 200 HoloFuel total. Fatima agrees to pay Ellie 50, so that Fatima ends up with 50 and Ellie ends up with 150, resulting in the same 200 HoloFuel in circulation—exactly what existed before they transacted.
Fatima, an application provider, has a balance of 200 HoloFuel. Ellie, a host, has a negative balance of -200. These balances represent a total active supply of 200 HoloFuel total. Fatima agrees to pay Ellie 50 HoloFuel for hosting services. Fatima ends up with 150 and Ellie ends up with -150, paying off part of Ellie’s debt and removing 50 HoloFuel from circulation.
Therefore, it is only accounts with credit limits, host and reserve accounts, that determine the supply of HoloFuel. When their balances go negative, circulating supply goes up. When their negative balances move toward positive again, in other words, as their debts are paid off, supply goes down - as long as the negative account is transacting with a positive one.
Here are the specific factors that determine how HoloFuel’s supply changes over time (key points are in bold):
To summarize: The supply of HoloFuel can expand and contract in response to demand, adjusting to the actual market behavior of its users.
HOT is an ERC-20 token sold as an IOU for HoloFuel during our Initial Community Offering (ICO) in April 2018. The funds raised are being used for the development of Holo and Holochain, its underlying technological infrastructure.
Regardless of the past monetary value of either HOT or HoloFuel, HOT will be accepted as a straight swap. It will be 1 HOT for 1 HoloFuel. There will be an extended period during which you can participate in the swap. Details will be communicated well in advance.
HoloPorts are efficient, plug and play devices that make hosting easier, especially for those who might not be comfortable with Linux. You can pre-order a HoloPort on shop.holo.host.
Anyone can become a host by buying a HoloPort hosting device or downloading the Holo app (no purchase required) to run on any Linux device. Windows and Mac versions will be released at a later date.
In the future, there will be additional ways to earn HoloFuel. For example, credit may be extended for exchange or barter based on trust, services, and skills.
You will be able to buy HoloFuel from Holo, third party exchanges, peer-to-peer, and from apps that sell HoloFuel. These are the options that we know today, who knows what will be possible tomorrow?!
Holo’s Reserve Accounts will only redeem HoloFuel that is earned through hosting services. The system is designed to know how HoloFuel was earned, so you can only convert HoloFuel into other currencies for hosting.
HoloFuel obtained, but not earned, from hosting is likely to be able to be exchanged and traded on third party exchanges and platforms.
- p5: Holo Hosts get paid for providing hosting to mainstream users who just use their browser instead of installing Holochain.
- p7: Holo enables hosts to turn a consumer-grade mini-computer into a source of revenue, where they get paid for hosting distributed applications. Hosts choose what apps to serve, and set their own hosting prices and priorities.
- p18: General Purpose Transfers and Transactions: Initially, Holo will only support hosting services and so support hosting transactions only. Eventually Holo needs to be able to support general purpose transfers and transactions that are not just hosting transactions.
- p33: Hosts will be required to register if they want to redeem credits for outside currencies through reserve accounts.
Distributed hosting requires microtransactions, which is the main reason we need a currency that can process payments worth fractions of a penny while still costing less (in fees and computing cycles) than the original computing and funds being counted. We designed HoloFuel to have low computational overhead; its efficiency allows us to charge 1% or less in transaction fees.
For Holo to serve the trillions of small computational interactions required for a distributed hosting ecosystem, we’ve designed its currency to support millions of transactions per second (TPS) and account for service provision in batches. HoloFuel’s TPS technically has no limit, increasing as the network scales up - thanks to Holochain’s highly efficient, agent-centric approach to data integrity.
A useful currency can’t just be a “digital gold” store of value. It has to function well as a medium of exchange, which means it needs to be stable enough for people to trust doing business with it.
HoloFuel optimizes the market value of its units in relation to the cost of hosting by 1) allowing for the currency supply to be dynamic in response to actual market behavior of its users (see Why is there no supply limit for HoloFuel? and How does HoloFuel’s dynamic supply work?), and 2) being asset-backed by the hosting resources of the network. These design features give the currency a steady and stable trajectory without being value-static or requiring a peg.
When people ask about consensus, what they really want to know is how users can agree on the “facts” of their interactions, technically known as data integrity. Holochain applications (hApps) maintain data integrity without the need for blockchain-style global consensus.
Things in the real world—atoms, cells, bodies—maintain the integrity of their individual and collective state just fine without consensus on a global ledger. In the same way, Holochain’s approach to data-integrity is agent-centric, rather than data-centric, with each node being like a cell that maintains its own state while remaining bound to the physical and biological constraints of the ecosystem in which it lives.
The “biological constraints” of a hApp are encoded in its validation rules—the DNA of the application. These rules are the only things nodes in a hApp need to maintain global consensus. With these rules as the foundation, each user keeps an immutable record of their own actions on a local hash-chain, DNA being the first entry on the chain. Each tweet, vote on a poll, or currency transaction (depending on the hApp) would be an additional entry on the agent’s chain for that application.
Keep in mind that Holochain is not a platform like Ethereum, where every dApp runs on the same network. Each hApp has its own validation rules and its own separate network. If an agent tries to cheat by tampering with their copy of the validation rules, they fork themselves off into a separate, lonely hApp just for them.
Each hash-chain entry is cryptographically signed to prove authorship and ensure accountability. Multi-party interactions (e.g., transactions) are mutually countersigned to each party’s chain, and peers are able to audit each other’s chains before agreeing to an interaction or transaction.
Nodes can then share data with each other via a distributed hash-table (DHT), the same technology underlying BitTorrent’s peer-to-peer file sharing protocol. What’s different about Holochain’s DHT is that it also ensures that the shared data follows validation rules.
To share data, an agent’s device sends it to a subset of random peers (randomness defends against collusion) based on the similarity of their public key hashes to the hash of the data being shared. These random devices check that the shared data follows the rules of the application. The data is rejected if it breaks the rules. If it follows the rules, the validator marks it valid, signs that statement, and propagates the data by gossiping to the network.
If a node is found to be propagating or validating bad data, that node is blocked and a warning is sent to others via gossip. This effectively blacklists bad actors from participating in the app.
Additional measures to defend against flooding the network with fake validators are customizable for each application. A messaging app may only need basic protections, such as using email verification, whereas a supply chain handling million-dollar transactions may require vouching from industry peers, an invitation code, and government ID verification to join the network.
It’s worth noting that consensus algorithms can be built on Holochain if desired, though they would have the same unnecessary wastefulness and inflexibility of blockchains. We have been able to map an alternate approach for every situation that seemed to need an absolute sequence of events or global consensus. We found solutions that do not have those requirements.