What is Holochain?

Holochain is a unique open-source framework that enables the creation of Dapps without relying on a traditional blockchain. Instead, Holochain uses a novel architecture that allows for distributed peer-to-peer computing, enabling users to run their own individual nodes and communicate directly with each other without relying on a centralized intermediary. 

The story of Holochain begins in 2008, when the founder of Holochain, Arthur Brock, started working on a new way to create decentralized applications. At the time, blockchain technology was still in its early stages, and Brock saw some limitations with the blockchain's scalability and efficiency.

Brock's vision was to create a decentralized platform that could be used to build a wide range of applications, from social media to financial systems, while also providing high levels of privacy, security, and data ownership.

Over the next several years, Brock and his team developed the Holochain framework. The architecture is based on a distributed hash table (DHT) and enables nodes to communicate directly with each other, without the need for a central intermediary.

Unlike traditional blockchains, which rely on a global consensus mechanism to validate transactions, Holochain is built on a distributed architecture. This means that each node in the network is responsible for its own data and computations. By eliminating the need for a centralized entity, Holochain reduces the risk of a single point of failure or attack.

Holochain's architecture makes it possible for every dapp to maintain its own data and have control over who it is shared with. In some sense, every dapp on Holochain is its own DAO with the protocol itself serving as the framework. Developers can craft their own governance tools which can differ from one dapp to another. 

Core developers are in charge of upgrading and maintaining the Holochain framework, which in theory, makes the entire protocol vulnerable to hacks. In practice, every dapp maintains its autonomy via its own set of rules. If a hacker managed to exploit one dapp, his damage would be limited to that dapp alone, as other dapps may have different rules. Furthermore, users have control over their own data and can decide who they share it with. This agent-centric design makes it difficult for malicious actors to manipulate or corrupt the data.

In addition, Holochain has a reputation system that helps to incentivize good behavior and discourage bad behavior. This system rewards users who contribute positively to the network and penalizes those who behave maliciously.

Holochain has been open to the public in 2017. The reason why many people are hearing about the project just now is because the team has been carefully crafting the protocol to be as secure as possible before it can gain traction.

How does Holochain work?

Holochain is not your average crypto protocol. In fact, it's one of the handful of projects that use the hashgraph distributed consensus. The most well known project to use this type of consensus is Hedera.

Hashgraph consensus and blockchains are both distributed ledger technologies that enable decentralized and trustless systems. However, they have some key differences in their architecture which lead to more scalability and security.

Blockchains use a chain of blocks to record and store transactions, while hashgraph uses a directed acyclic graph (DAG) to record transactions. This makes hashgraph more efficient in terms of scalability and transaction processing, as new transactions can be processed in parallel, rather than waiting to be added to the end of a chain.

Another difference is at the consensus level. Hashgraph uses a virtual voting consensus mechanism where nodes in the network exchange information about the order of transactions and come to a consensus on the order of events. In contrast, blockchains use consensus mechanisms like PoW or PoS to validate transactions and create new blocks.

At the end of the day, Holochain can support DeFi and NFT projects just as well, if not better than the rest of blockchain projects. Moving forward, we will explain each component that makes up Holochain protocol.

Holochain Core

Holochain Core is the foundational layer of the Holochain platform, providing the basic architecture and infrastructure that dapps can build on. It is designed to be highly scalable, efficient, and secure, enabling developers to build applications that can run on a distributed network of computers.

At its core, Holochain is a peer-to-peer networking protocol that enables nodes in a network to communicate and share information without the need for a centralized server. It uses a distributed hash table (DHT) to store and retrieve data, with each node in the network responsible for storing a portion of the data.

Holochain also provides a secure and decentralized way of validating data and transactions through a process called validation rules. Each node in the network is responsible for verifying the correctness of data, ensuring that it has not been tampered with or altered in any way. This helps to ensure the security and integrity of the network.

Holochain DNA

Dapps on Holochain, or better said hApps, are highly customizable. This makes it easy to share code and build up pieces together to create unique hApps. Each customizable part is made out of a DNA (Distributed Network Application). This DNA has its own business rules, isolated peer-to-peer network, and shared database. Depending on how the DNA is pieced together, users can run DeFi apps, games and just about any type of dapp.

When a user interacts with a Holochain application, their input is first validated against the validation rules defined in the application's DNA. If the input is valid, the application then generates a transaction, which is signed and broadcast to the network.

HoloPort

One of the core components that make Holochain are nodes. They are the highways that send data between hApp users, and they usually run on computers. Holochain gives users the option between running a software node and a hardware node. However, the HoloPort (hardware node) is specifically designed to be a user-friendly and efficient way to run Holochain applications for non-technical users.

The HoloPort is essentially a mini-computer that runs the Holochain software and provides users with a secure and decentralized platform for running Holochain applications. It is designed to be plug-and-play, meaning that users can simply connect it to their home network and begin running applications without the need for any additional setup or configuration.

One of the primary benefits of using a hardware node like the HoloPort is that it provides a secure and dedicated environment for running Holochain applications. Because the HoloPort is a standalone device, it is less vulnerable to external attacks than a traditional software node running on a computer.

HoloPort has the ability to serve as a hosting node for Holochain applications. This means that users can contribute computing resources to the network by running applications on their HoloPort, and earn Holo fuel (HOT) in exchange for providing these resources.

HoloFuel

Holofuel is the native crypto of the Holochain network. It is a digital asset that is used to power and facilitate transactions on the Holochain platform, and serves as the fuel for the distributed computing resources that enable Holochain applications to run.

When users run Holochain applications on their devices, they provide computing resources to the network, which are then rewarded with Holofuel. 

Unlike Bitcoin or other cryptos, Holofuel is not mined. Instead, Holofuel is issued by the Holo organization, which created the Holochain platform, and is distributed to users in exchange for the computing resources they contribute to the network. This means new HoloFuel tokens are minted based on the computing power used for running hApps. 

How to make money on Holochain?

As of 2022, Holochain is still in alpha testing, with the beta testing scheduled for 2023. This means you can't yet create your own hApp. On the good side, Holochain is opening its doors to early contributors who can profit from being among the first to support the Holochain infrastructure.

HoloPort

One of the primary methods of making money from Holoport is by running a node. If you are tech savvy enough you can run a software node, or you can pay $500 to own your HoloPort (hardware node). Once you've set up your own node, you can earn passive income in the form of HOT tokens for hApps renting computational resources from your node. 

Price Prediction for Holochain — Can it hit $1000?

Buying and hodling HOLO — the native token of Holochain — is one way of potentially making money on HOLO.

By looking at its current price, it’s natural to think about the chance of HOLO hitting $1000 per token. This can happen sooner, or way in the future, and is determined by a couple of ever changing factors.

Let’s examine the potential growth of the HOLO token by analyzing its tokenomics. HOLO’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} HOLO tokens being in circulation today, that means a price of {PRICE} per HOLO.

How did we come to that calculation? It’s quite easy, the price of a HOLO token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each HOLO coin. 

By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of HOLO at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for HOLO to hit that price.

At a price of $1000 per token, that means the current market cap of HOLO would equal ${{CIRCULATING_SUPPLY} * 1000}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $1000.

Now let’s shift our attention to the fully diluted market cap.

Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.

The fully diluted market cap represents the total value of a coin if all tokens were in circulation. HOLO’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} HOLO which means that no more coins above that number will ever be created.

These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.

How does this impact the price of HOLO? Taking into account the current price of a HOLO token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. HOLO coins that have been burned are not taken into consideration because they have been permanently removed from circulation.

Whether it seems gigantic or not, the number we came to above only takes into account the current price of a HOLO token. Doing the same calculation but with a price of $1000 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 1000} for the HOLO protocol fully diluted market cap.

These are all crucial details to know when calculating if HOLO can reach the price of $1000 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.

The future of HOLO depends solely on its growth as a network used by tens and hundreds of millions of users.

If you’re looking to add some HOLO to your portfolio, the most trusted places to get some are Binance and Coinbase.