Holochain Examined

What is Holochain?

Well let’s start by stating what it isn’t – it isn’t a blockchain.

However, Holochain shares many of the qualities or attributes of a blockchain:

  • There’s a ledger (but more than one).
  • It’s decentralized and therefore beyond the control of a centralized authority.
  • Validation is possible.
  • Consensus can be reached between nodes on the network but it’s not global.
  • There is no global consensus algorithm as modeled in blockchain (or rather there’s a very lightweight version – A Digital Hashing Table) making Holochain scalable, secure, and energy efficient.
  • A critical component of global consensus with blockchain – the timestamp is unnecessary on Holochain.
  • Its primary purpose is to be a base layer for the hosting of decentralized applications.
  • Holochain, therefore, is not a repudiation of blockchain but another method of achieving the goals of blockchain.

Holochain Whitepaper

In a Little More Detail

Holochain combines three aspects of software architecture:

  1. Hashing
  2. Digital Signatures
  3. Digital Hashing Tables (DHT)


Hashing is generating a value or values from a string of text using a mathematical function. Hashing is one way to enable security during the process of message transmission when the message is intended for a particular recipient only. A formula generates the hash, which helps to protect the security of the transmission against tampering.


So far, so good, this is as in blockchain. Hashing generates a number key just like the public or private key we are familiar with. We might view this key as a unique signature, identifier or fingerprint. Any change to the string invalidates the key.

Digital Signatures

A digital signature is the marriage of a public and private key. The public key functions like a username while the private key operates akin to a password. The public key is shared, the private -obviously not. Dual key cryptography is utilized to create ‘digital signatures’. In the simplest possible terms, a private key may sign a message or transaction and the network may verify that the public key identifier is indeed linked to the private key for that account confirming the validity of the message /action.

Distributed Hashing Table (DHT)

Holochain utilizes hashing in its own way by tying hashing to a Distributed Hashing Table(DHT). A DHT communicates with other nodes on the network and poses a question ‘Who has the file with the hash 45ce23b..?’, the file can be simultaneously retrieved in chunks from many sources all identified by the identifying hash (think Bittorrent). Because the content on a DHT is identified by its hash, the node making the request always gets exactly what it was looking for (as identified by the hash). making it very secure as what you request is what you receive. The Distributed Hash Table is maintained by the Holochain central chain. 

Combined, these three components are the building blocks of Holochain. Digital signatures secure ledger integrity, hashing ensures the data transferred is as intended and Distributed Ledger Table decentralizes the storage of this information, so that it may be hosted by a broad community rather than a centralized authority. Ultimately, resulting in a decentralized, scalable, secure, and censorship-resistant ledger just not a blockchain.

How Does it Work?

 In the team’s own words:

Holochain provides a data structure that can be used to build decentralized apps. You have your own chain, which you can add data to, including financial transactions. The chains can merge, split, and interact in complex ways. The data is stored in a decentralized way (like Bittorrent). The data has a hash, which is a mathematical fingerprint that corresponds to the data. If someone tampers with the data, the mismatch between the data and the hash will be noticed, and the data rejected as invalid. Digital signatures guarantee the authorship of the data. It’s Bittorrent plus git plus digital signatures.


What is Holochain’s Vision?

The creators of Holochain view the project in terms of nature and natural processes. They see each node as a cell – a part of the whole but not necessarily communicating with that whole. A liver cell cares not what the heart is up to, as an individual app may interact only with the portion of the network that concerns it.

Each cell (app) has its own set of rules which define it. Other apps/ledgers within the system interact based on the rules that define them. Should those rules change the app essentially forks itself and becomes irreconcilable with its former self and detached from its previous relationships.

Holochain’s vision is of a scalable, secure network of decentralized applications that interact with each other as needed but without the energy and computational wastefulness of a global consensus algorithm. Thus solving the scale, security, decentralization, trilemma -achieving maximum potential in all three areas with sacrificing in any one area.

How does the Ecosystem Function?

What Areas of the Cryptosphere is Holochain Designed For?

At root – sharing data without centralized control:

  • Social Networks – think Twitter or Facebook without corporations.
  • Supply Chains – information flow that is easily accessed and assessed – reliable but free from central control.
  • P2P Platforms – a network of equals sharing and collaborating under the same ‘condition’ and incentives.
  • Collective Intelligence -forums, chatrooms, document sharing, and editing.
  • Reputational Credit Cryptocurrencies – agency designed currencies – set-into the nodes rather free-floating currencies like Bitcoin or Stellar.


What is Holo fuel (HOT)?

Holo’s token HOT is a utility token that facilitates the users of its ecosystem to participate and collaborate on the platform.

Holo fuel is Holo’s native, asset-backed, mutual-credit currency. Holo fuel is a Holochain-based currency that is a contractual service obligation, redeemable for hosting. Holo fuel 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.


The Benefits of Holo Fuel

In the context of the architecture of Holochain, Holo fuel provides key benefits:

  • It is entirely peer-to-peer in operation.
  • Speed is high, while fees are low.
  • The currency may be earned through hosting but also redeemed into other cryptos/fiat.
  • Every host node is operating by known and shared guidelines rendering the currency accountable and transparent.

Holo Fuel – Operates Differently to Other Utility Tokens

Mutual Credit –  is hardcoded into Holo fuel – it uses a double entry accounting system that results in scale,  ease of reconciliation and transparency.

Asset-Backed – The global computing power of the hosts is what ‘backs’ the currency.

Stability –  Because the global computing power of the collective network changes slowly over time – the token tends to exhibit a smoother value curve as compared with ‘normal’ utility tokens.


Holo Fuel Economics

A deep dive into Holo Fuel Tokenomics:

Holochain Examined

The Charts

Knocking on the top thirty by market capitalization. Good daily trade volumes. Max supply 177 billion / 133.21 to market.

The all-time chart shows a steady uptrend since July 2017.

A quick scan of the price action for HOT shows a strong trend of price appreciation in BTC terms as the network has expanded. Further chart data for Holochain can be found on TIMM.

The Future?

Commons Engine

Holochain is certainly an ambitious project and one that evidently has gained traction and momentum even in the teeth of an extended bear market.  Its breadth of ambition can be seen with its ‘Common Engine‘ initiative.  A financial exchange that aims to leverage the power of networks to serve the goals of the participants rather than platforms owners and investors.

The vision with the commons engine is to power a series of thriving commons based economies – picture things like peer-to-peer renewable electricity cooperatives, or ride sharing communities – by creating the technical infrastructure that enables contributions by participants to be recognized elsewhere within, and perhaps beyond, that community.

Matthew Schutte, Communications Director at Holochain


Junto describes itself ‘as a’New Breed of Social Media‘. It’s a decentralized social media app being built on Holochain. Junto means ‘together’ in Spanish. The platform takes a non-profitapproach and is designed to have a very clean interface which removes many of the staple features of the current crop of social media sites – there’s no follow ticker, no like button and no advertisements. Their Kickstarter campaign has just concluded raising a modest $106,000but more than their goal of $100,000.

Our hope is to enable expression in its purest form on our platform, and we believe that intention in and of itself will translate into people being more open, vulnerable, honest, and willing to connect with others.


In Summary

Holochain is an energy efficient, decentralized ledger system and application platform that utilizes peer to peer networking. Consensus is handled differently on Holochain in that every device on the network has its own secure ledger and can operate independently while also communicating with all the other devices on the network. Decentralized, distributed but not aiming for global consensus as is the model with blockchain leaders such as Bitcoin, Ethereum and EOS. Holochain allows each device to have its own chain based ledger system with the Distributed Hashing Table maintaining consensuses throughout the network. The Holochain ethos is one of empowering its users and re-distributing the power/control/incentives back to those who use the network.


Main website


Developer Resource Portal

Medium Articles





If you have further queries about Holochain, you can put them to me or the other mentors on TIMM.

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