Introduction
Holo is a decentralized hosting platform built on an architecture called Holochain. Holo fulfills on the promise of blockchain by leveraging the scalable architecture of Holochain to accomplish two primary feats:
1. Enable fully-functional decentralized applications (far more sophisticated than smart contracts) to serve mainstream Internet users, and
2. Provide the massively scalable crypto-accounting infrastructure required to host and manage applications at such enormous volumes of usage.
Technology
Holochain: The Underlying Technology Framework
In order to cover details of the currency design, such as countersigned transactions, pre-authorization tokens, and supply dynamics, we need to establish some terminology and basic understanding of the Holochain architectural approach. Holochain is a crypto-operating system. While it does not follow the pattern of blockchain or other decentralized consensus systems, it provides a wholly innovative means of ensuring data integrity for peer-to-peer applications without using consensus.
Holochain ensures data integrity for distributed applications through careful provenance of data published from each agent’s local, immutable chain. Public entries to local chains are then shared to a content-addressable, distributed hash table (DHT). Unpredictably selected peers validate cryptographic signatures, enforce data schemas, and application logic.
Using this pattern of local immutable chains with headers notarized by an eventually consistent DHT, Holochain introduces an agent-centric pattern for data integrity, rather than a data-centric, absolutist frame (which is what creates the need for consensus). Once a developer learns to do this kind of inversion in their thinking (from data-centric to agent-centric), then building a distributed application on Holochain becomes much easier, and many orders of magnitude more computationally efficient than applications built for scale on blockchain.
Design Constraints: Holo Currency Requirements
Holo is intended to be scalable, secure, and stable enough to be the foundation for a new crypto-economy. To accomplish this Holo must provide high-speed crypto-accounting, massive transaction volumes with high enough efficiency to minimize overhead, and a cryptocurrency which is stable enough for normal people to rely on for their livelihoods. It must also be structured with proper incentives for participation and provide adequate resources for maintenance of its infrastructure.
Crypto-accounting with Low Overhead
Holo mobilizes computing resources which can be fairly easily measured in terms of bandwidth, storage, and CPU time or cycles. As network computing power and access to high speed connectivity expands, costs and prices will be driven downward. The fee infrastructure involved with traditional financial transactions does not map well onto this problem space, owing to the very small, but very frequent transactions it services. The toll of having to pay a bank a 3% charge plus a $0.25 transaction fee on a $0.00025 transaction obviously makes such a system unfeasible. People can’t pay over a thousand times the cost of the computing power in transaction fees.
The computational overhead of blockchain poses the same problem. When every node must agree about every state change on a global ledger, it takes drastically more computing to account for that bit of computation than the original computation provided. The computational cost of consensus management, whether through the hash-churning of proof-of-work or the betting markets of proof-of-stake, requires an unnecessary amount of extra state processing that carries inherent scaling limitations. One should not incur millions of times the computing power in accounting overhead to provide a small amount of hosting.
In summary, the first constraint which guides the design of Holo’s currency system is that it must cost less in computing cycles and in fees than the original computing and funds being counted.
Massive Transaction Volume
For Holo to service mainstream Internet markets, it must be able to host large peer-to-peer versions of applications similar to Slack, Twitter, or even Facebook. Accounting capacities for the computation obviously must scale with the application’s usage. As such, Holo must exceed the capacities of current blockchain throughput of a few transactions per second by at least a million-fold.
Proof-of-Service
For Holo to serve the trillions of small computational interactions that it will need to handle, they have designed its currency system to support millions of transactions per second and account for service provision in batches. The batching is facilitated by signed service logs, which record signed requests and their associated signed responses, along with the underlying computational metrics to deliver them. When the log on a device accumulates enough micro-charges to cross the billing threshold (in terms of time elapsed or charges accumulated), it generates a Proof-of-Service invoice for the services performed.
The approach of delayed invoicing parcels the accumulation of computational micro units into billable chunks for which banking fees would still be impractical, since they may still be less than a dollar. The Proof-of-Service invoice is sent asynchronously by attaching a link to the Payor’s ID in the shared DHT. If the Payor fails to pay the invoices promptly, the host stops serving that application. This invoice acts as both a request for payment and a pre-authorization token, which accelerates payment by permitting it to be automatically signed to the recipient’s chain without needing human approval for the transaction.
Infrastructure and Fees
Holochain is a fully peer-to-peer architecture that enables applications to run with no centralization at all. However, to bridge between a fully peered world and the web site functionality people are familiar with, Holo builds the bridge to the “centralized web.” One example involves enabling people to type a domain name into their web browser and provide Domain Name Services (DNS) to resolve to, in order to connect them with a cluster of hosts for the application they are trying to reach. We are used to thinking of the web as decentralized, but once someone has experienced fully decentralized spaces with no global address or name authorities, no root servers, only content addressability via cryptographic hashes, then the aspects of centralization in the existing pattern of web and Internet become apparent.
So the Holo organization not only provides the necessary operate the infrastructure to interface with centralized web, but maintains that infrastructure and provides security updates for the Holo software and DNS services. The funds for doing this are built into tiny transaction fees on each transaction. Since ongoing funding for open source infrastructure projects has often been challenging, this is one strategy to alleviate that issue. Half of Holo transaction fees go toward Holochain.
The fees are not only for current maintenance and services but to fund future features and infrastructure expansion. They will provide tools for crowd-direction of a significant portion of these funds, as part of our commitment to transition Holo to a purely digital entity managed by its participants. At the time of launch, the percentages and timelines will be established so that the structure of this management can be coded into the governance of Holo itself.
Accordingly, every currency transaction earmarks a small promise for payment of the transaction fee. This is akin to the Proof-of-Service process but involves recording a promise of payment rather than a request for payment. Whenever transaction fee promises accumulate to a threshold level (initially 1 credit), the next spending transaction must be a payment to settle those promises. No central authority needs to police payment when it’s built into everybody’s validation rules.
Value Stability as Foundation for Mainstream Participation
While speculators may enjoy the the volatility of cryptocurrency markets, most individuals and businesses are wary of relying on a form of payment with large and drastic fluctuations in value.
For a majority to engage with Holo and its underlying cryptocurrency, the market value of its units should be optimized for a steady and stable trajectory, preferably growing in value over time. While this may sound to many like an impossible or naive design parameter, it is incorporated into the design of Holo’s cryptocurrency.
A New Breed of Cryptocurrency
Holo offers a whole new breed of cryptocurrency. Unlike its predecessors, it is not a crypto-token or cryptocoin, but a mutual credit accounting system where every transaction is countersigned on the local chains of both counterparties. This allows us to design the crypto-credits to forge new patterns of social and market behaviors that have not previously been possible.
No tokens. No coins.
Blockchain-based currencies are token-based. A cryptocoin is actually a cryptographic token with an associated unit value and a private key, which is used to spend that coin. A blockchain ledger provides the definitive list of all coins, by recording the creation of each coin and each following transaction. In blockchain, each transaction actually destroys prior coins when they are spent and creates new coins. The recipient of the transaction controls the private key of the coins paid to them, while the sender maintains the control of keys for any coin created as “change” left over from the original coins sent. Blockchain ledgers require consensus strategies because everyone must agree about what coins exist and what coins have been destroyed.
When no coins exist, no consensus is required. Instead of a token-centric ontology that requires computational overhead invested in establishing consensus, Holo uses an agent-centric ontology. Basically, this provides an upgrade to traditional double-entry accounting by using cryptographic signatures committed to immutable chains as accounts. In this double-entry accounting method, instead of managing a global ledger of coins, each agent (or user, or account) manages its own local chain of transactions. This means that each person’s balance is encoded on their own chain, so when two people transact, they only need to audit their counterparty’s history to be sure they have the credits they’re spending. They need neither permission nor consensus from anyone else. One party’s balance goes up, and the other party’s balance goes down, in equal measure.
Another result of having no coins is the fact that every transaction is perfectly counterbalanced — including the initialization of the system. Rather than minting a plethora of coins for the organization in an ICO, all the money raised by presale of hosting credits is debited from Holo’s account when the presold amounts are credited to the buyer’s account. Every credit has an offsetting debit, and having received the funds for the purchases, Holo’s account starts out by carrying this debt.
The transaction fees described earlier are the fundamental method for earning against that debt. This revenue structure ensures that incentives stay aligned with the need to support a robust infrastructure, and that Holo is incentivized to keep the fee from becoming so onerous that it makes competing systems too attractive. Moreover, the Holo account balance always shows the status of its net value contribution, meaning that the organization is transparently held to account for all the funding it receives. Source
Team
Co-Founders
Arthur Brock — Co-Founder, Chief Architect.
Arthur Brock builds targeted currencies which shape the social dynamics of our emerging post-industrial economy. He has created more than a hundred designs for multi-currency systems and his software company has built and deployed dozens of those systems. Initially, Arthur put his experience Artificial Intelligence to use at GM, Chrysler & Hughes, but shifted his focus to building intelligence into social architectures rather than to computers. He started student-run schools and award-winning, employee-run businesses and discovered the engine that runs these types of organizations involve specific patterns of incentives and feedback. He began to unlock secrets of the Social DNA by which people operate and the critical role of currencies for programming these patterns.
Arthur’s designs include currency systems for: collaborative scientific research, sustainable fishery management, corporate compensation plans, employee stock options, community-based economic development, business barter and exchange, triple-bottom-line trade credits, open source software development, customer loyalty programs, water rights, recirculating gift certificates, community service, employee performance management, arts & culture development, risk-management in the insurance industry, efficient resource sharing & management, and community & environmental impact assessment.
Twitter account — @artbrock.
Eric Harris-Braun — Co-Founder, Executive Engineer.
Eric Harris-Braun designs and builds software infrastructure for the new economy. He is a co-founder of the MetaCurrency project, which is creating a platform for communities of all scales to design and deploy their own currencies. Eric is the co-founder of Glass Bead Software, a provider of peer-to-peer networking applications, and of Harris-Braun Enterprises, a freelance software development shop, which has created, among other things, complex data-collection websites for the health-care industry, an Android application for catch monitoring for the fishing industry, and the Online Writing Workshop, which it built and operates. In 1994 he published the Internet Directory (Fawcett Columbine), which sold over 100,000 copies and went on to a second edition in 1996 before being made obsolete by Google. Eric received a B.S. in Computer Science from Yale University. Currently he lives in rural New York, where he is part of a Quaker Intentional community, plays with his two kids, tends a garden, and lives in a straw-bale house.
Twitter account — @zippy314.
Development Team
David Meister — Core Holochain Engineer.
Celestial Hanley — Experience Designer.
Connor Turland — Developer Training & Documentation.
Damien Douté — Software Engineer.
Emaline Friedman — Documentation & Research Lead.
Mamading Ceesay — Dev Ops.
Micah Jefferson — Web Presence & Communications Ninja.
Nicolas Luck — Core Holochain Engineer.
Phillip Beadle — Holochain Engineer.
Samuel Rose — Dev Ops & Scaling.
Sam Cooley — Dev Ops.
Arthur Brock (artbrock) — Repositories — 8. Stars — 13.
Nicolas Luck (lucksus) — Repositories — 12. Stars — 20.
Michael Dougherty (maackle) — Repositories — 94. Stars — 115.
Philip Beadle (philipbeadle) — Repositories — 20. Stars — 2.
Will (qubist) — Repositories — 18. Stars — 15.
Eric Harris-Braun (zippy) — Repositories — 52. Stars — 48.
Joel U (zo-el) — Repositories — 18. Stars — 7.
Core Team
The Holochain team is really large; many of the individuals listed are part-timers, contractors, or advisors.
Ferananda Ibarra — Partnership Coordination.
Matthew Schutte — Communications Director.
David Atkinson — Finance & Legal Coordinator.
Jean-François Noubel — European Executive Liason.
Jean Russell — ICO Project Lead.
Mickki Langston — Logistics Coordinator.
David Braden — Holo Developer Lead.
Mary Camacho — US Product & Operations.
Jarod Holtz — Indiegogo Project Lead.
Sami Van Ness — Director Of Marketing.
Laureli Shimayo — People & Culture Coordinator.
Robert Best — Data & Analytics Lead.
Anders Aamodt — Xenoludology Research Fellow.
Katie Teague — Filmmaker.
Greg Schaffer — Community Builder.
Katie Lucas — People & Culture Lead.
And others.
Partnerships
On June 5, Holo announced a new strategic partnership with a project called Promether. After several months of discussions between the two parties, a mutual interest in each other’s platforms from a development perspective was born. More information can be found here.
There are rumors that there is something big cooking up between Holochain and Mozilla. Mozilla’s CFO Jim Cook has given a video testimony for Holochain: “Holochain is talking Mozilla’s language”. The full video can be found here.
Use case
What kind of projects is Holochain good for?
Sharing collaborative data without centralized control. Imagine a completely decentralized Wikipedia, DNS without root servers, or the ability to have fast reliable queries on a fully distributed PKI, etc.
Social Networks, Social Media & VRM: You want to run a social network without a company like Facebook in the middle. You want to share, post, publish, or tweet to shared space, while automatically keeping a copy of these things on your own device.
Supply Chains & Open Value Networks: You want to have information that crosses the boundaries of companies, organizations, countries, which is collaboratively shared and managed, but not under the central control of any one of those organizations.
Cooperatives and New Commons: You want to create something which is truly held collectively and not by any particular individual. This is especially good for digital assets.
P2P Platforms: Peer-to-Peer applications where every person has similar capabilities, access, responsibilities, and value is produced collectively.
Collective Intelligence: Governance, decision-making frameworks, feedback systems, ratings, currencies, annotations, or work flow systems.
Collaborative Applications: Chats, Discussion Boards, Scheduling Apps, Wikis, Documentation, etc.
Reputational or Mutual Credit Cryptocurrencies: Currencies where issuance can be accounted for by actions of peers (like ratings), or through double-entry accounting are well-suited for holochains. Fiat currencies where tokens are thought to exist independent of accountability by agents are more challenging to implement on holochains. Source
Roles, Credit limits, and Supply Algorithms
Holo credits are designed to power distributed applications operated by a network of hosts who provide computing power. Therefore, specific roles and responsibilities are defined within this ecosystem. Most of these roles can be stacked such that an agent (a node with private/public keys and the ability to interact with Holo and its hosted applications) may hold multiple roles. The exceptions to this rule are Reserve Accounts and the Holo organization, which acts as an Infrastructure Provider.
End-Users: Holo is designed to help users reach their applications, keep their data out of centralized services, and make it safe and easy to do crypto-transactions. Like all user roles, major rights and responsibilities involve following the rules encoded in the Holo app DNA, which may include payment of transaction fees when they accumulate to the payment threshold.
End-Users cannot have a negative balance. They can only spend credits which are part of their positive balance.
Hosts: Hosts have the rights to copy and run applications on Holochain, and copy and publish user data, but that does not grant them ownership of that data. If an App Provider removes an app, or an End-User removes their account, the host must purge that app and that user data from their system. Other than the underlying Holochain engine for cryptographic services, and the Holo application for usage tracking and payment processing, no Holo host is required to host any particular application. Hosts can explicitly install particular apps, and also block specific applications. Holo applications are categorized when added to the framework.
Hosts can set their own priorities and filters by app categories, price brackets, and usage demands. If a host doesn’t have much time or interest in customizing their applications, they can enable an app selection autopilot that will trigger installation of applications with more demand than available hosting power. Autopilot is a good way for the host to increase their revenue by bringing capacities online as they are needed.
Hosts can also set their own prices. Some may opt to host certain applications for free — consider supporting a P2P wikipedia, SETI, Genome Mapping, or other projects someone would want to share computing power with. Some people may choose higher thresholds than others, thinking they don’t want to spend any bandwidth or electricity unless they are being paid above a certain amount.
Again, just like in application selection, hosts who don’t want to pay much attention to pricing can configure an auto-pricing app. They can set basic priorities such as trying to serve the greatest demand, seeking the highest payers, or adjusting toward a nice middle of market zone to get some hosting volume without being flooded by it. Once a host has three months of hosting records they will receive a credit limit proportional to their hosting revenue. The credit algorithm includes anti-gaming mechanisms to deter faking transactions to inflate one’s credit limit, so a host’s credit will not be identical to their hosting revenue, but if they haven’t been cheating it will be well correlated with it. They receive credit because we interpret a history of receiving hosting revenue as a good indicator of future capacity to earn against a negative balance.
App Providers: App Providers are responsible for the maintenance and security of apps they
publish on Holo. They also agree to timely payment of Proof-of-Service invoices. Since unpaid invoices are visible to all, it is easy enough for a host to demonstrate a failure to pay. No central authority needs to intervene, and no smart-contract needs to enforce payment. Hosts can configure their app selection preferences to filter on age or accumulation of unpaid invoices.
Hosts will simply stop serving App Providers if they fail to pay. The benefit of this form of accountability is that feedback loops are optimized for making smarter choices, while maintaining the power to choose. Maybe someone wants to support a start up project that can’t pay yet.
Maybe they’re friends with the developers. Maybe they can afford to take the risk with slow payers and just charge them a little more. Why should a one-size-fits-all smart contract replace people’s power to choose? When it’s practical to have a smart contract as sophisticated as the Holo system, we can both automate optimal functioning and include human choice.
If an app developer sets up subscription, product, or service payments to be received in Holo, they will have access to a variant of the credit algorithm similar to Hosts. Many apps may take payments in traditional currencies, and would not qualify for credit from such activity, but they can use that cash to purchase hosting credits from Holo Reserve Accounts, which would then be held on reserve for redemption by hosts.
App Developers: If developers complete development bounties offered in Holo, they will also
have access to a variant of the credit algorithm similar to Hosts. This will likely be a small portion of the ecosystem. Source
Social metrics
Markets and volumes
TA
Not enough history
Competitors
Other platforms for consumer Dapps: ETH, EOS, Cardano, Quantum, Lisk, RChain, GXChain, Nuls.
Roadmap
Q1 2018
Holo: Crowdfunding campaign and ICO to raise capital for Holo, grow Holo network, and attract initial developers.
Holochain: More Alpha 0 releases First Alpha 1 release. New Features: publishing headers, transaction bundling, better debugging, gossip refactor, application bridging, performance benchmarking, upgrade error handling.
Apps: Refactor Core Service Apps: Anchors, DPKI, Personas, Holodex,App Store. Enhance Demo Apps: Clutter, HoloChat, Coin Toss, Wiki, Chess, DAO/voting.
Q2 2018
Holo: Holo Alpha software testing release to Indiegogo early adopters.
Holochain: Alpha 2 including new dev API Refactor in Rust & Web Assembly pluggable governance.
Apps: Integrate pluggable governance for easier app updates.
Q3 2018
Holo: Indiegogo HoloPort boxes shipped to hosts. First test transaction on Holo using Holo fuel. Reaching 2000 hosts.
Holochain: Alpha 3 includes security audit and the ability to adjust DHT parameters and behaviour.
Apps: Core app services available: — Holochain Directory (as pkg mgr) — DPKI & Identity Services — Holochain Index — Smart Caching.
Q4 2018
Holo: 100M test transactions per hour on Holo using Holo fuel. Test net of Holo running on 10,000 host device.
Holochain: Holochain Beta Release. Commitment to backward compatibility and more security audits.
Apps: Holochain App Store / Package Manager is live 50+ Holochain based applications that have been created to date. Partnerships established for other asset-backed currencies (energy, food, housing, etc.).
Q1 2019
Holo: Holo running on 20,000 host devices. Number of Holochain nodes has surpassed number of bitcoin nodes. Approaching production level sophistication.
Holochain: Peer-to-Peer applications on Holochain reach 50 apps and 10,000 users (with apps that don’t require paid hosting to smooth out imbalanced production/consumption). Approaching production level sophistication.
Apps: Replacement for gmail / gdocs / collaboration tools app available as beta on Holochain.
Token Mechanics
Since all valid transactions are double-entry accounting entries, Holo’s internal crypto-accounting functions just like a balance sheet where every transaction keeps the sheet in balance. Every credit has an offsetting debit. Nobody ever gets to create something from nothing. There is no minting, mining, or burning of coins. This means the sum of all the positive balances is always equal to the sum of all the negative balances. When no coins exist, and a matching debit for every credit is always required, the trick to managing the currency supply is fundamentally different. The simple reason for this is that the net currency supply is always ZERO.
A currency that is issued and operated this way is called a mutual credit currency. A currency
where someone gets to create something from nothing is called a fiat currency, from the Latin word “fiat,” meaning to “proclaim, declare, or speak into being.”
In Bitcoin, being lucky enough to find a nonce for a block, via proof-of-work, gives a miner the authority to create new coins from nothing. The recent popularization of the term “fiat currency” to contrast bank-issued, national currencies from cryptocurrencies, fails to recognize that all token-based cryptocurrencies are also created by the same gesture of fiat. A token created by wasting energy and computing is not backed by anything. It is spoken into being by mining or staking.
Although the net supply of mutual credit currencies is always zero, the active supply can expand and contract in response to market demand. Issuance in a mutual credit supply can be configured.
How Banks create money to adjust with the actual market behaviors of its users. When a system issues coins by fiat (even if the fiat issuing authority is randomized by proof-of-work), it simply cannot be responsive to markets in this manner. In response to the reality of variable demand, the hard-coded supply dynamics of fiat issuance produce volatile market value. However, a mutual credit cryptocurrency can be designed for stability, instead of volatility.
The primary mechanism for managing value stability in a mutual credit currency is good credit limit algorithms that govern how much each account is allowed to go into the negative. First one must recognize when the supply is expanded or diminished via double-entry transactions. There is no change in active supply when an account with a positive balance transfers to another positive account. Same is true for a negative balance to negative balance. It is when someone spends their account into a negative balance while paying someone with a positive balance that the supply of credits in active use expands. And it is when a person with a positive balance spends to someone in the negative that the supply of credits in active use contracts.
Since the supply is completely determined by credit limits the algorithms that determine the limits for each class of user are the only variables affecting the currency supply. When the extension of credit limits are well aligned with increase of value of the currency and its infrastructure, it is possible for the supply to grow without diminishing its value. Contrariwise, to support value stability, it is imperative to reduce the supply when market behavior indicates that demand for the currency is dwindling. Source
Token Metrics
Circulating Supply 133 214 575 156 HOT
Total Supply 177 619 433 541 HOT. Source
At the close of the ICO, 33.3% more HoloTokens than were purchased will be minted for the Holo organization and team, such that 25% of all tokens are held by the organization and team, and 75% are held by the community.
The Holo ICO doesn’t have vesting for team tokens. Source
Summary
Team: I acknowledge their work in metacurrency, but team lacks previous experience in blockchain space and developers from top tier IT companies
Idea: New outlook on the blockchain, new agent-centric ledger
Development stage: alpha testnet
Whitepaper: very good, outlines their ideas neatly
Roadmap: good with clear milestones
I have read quite a lot other reviews of Holo and pretty most of them were quite positive, and I can see why. Holo is an interesting project with its new outlook on cryptocurrencies. It is obviously surrounded with lots of hype and it has shown a spectacular performance on the market. But I have a number of questions/concerns:
- “As an asset-backed currency, the supply of HoloTokens is linked to the amount of distributed computing that the network will be able to provide (the number of HoloPorts and developer events sold through the crowdfunding campaign).” — I don’t understand this part. How is this currency asset-backed? They back their ~ €13,3M ICO with their other $1M ICO? Doesn’t that mean that they can only increase their supply if they sell more HoloPorts? And do they buy them back to decrease the supply? And who will guarantee that those ports will even get sold? Will they wait for someone to buy them?
- How will they attract users to their platform? Who will create dApps, and why on this platform? Everything looks good if it is written that lots of users = everything is dirt cheap and works better, but how do they plan to achieve that, how will it become mass adopted? Simply believe in their pioneers?
- And of course there is a security concern. POW is accepted as the most secure concept, a lot of project even have hybrid systems where they adopt POW as a security layer. How will Holo prove itself from this perspective? Since it is a new technology there is simply not enough data to judge this.
All in all this project is quite good. I will try to reach out to Holo team, hopefully they will answer my questions and I will be able to update this review with some Q&A and with that increase this review’s value.
