13 Mar Holochain, an In-Depth Look at HOT
Imagine a platform for decentralized applications that isn’t a blockchain, and you’ve got Holochain cryptographic ain. Fundamentally, there are shared attributes such as a ledger mechanism, decentralized applications. And while a global ledger is no longer required, consensus is still achievable. The familiar essential components are there, but are articulated differently in the Holochain ecosystem architecture.
What is Holochain?
In an extremely simplified description provided by the team themselves, Holochain is a decentralized platform, which stores data in a distributed hash table architecture. The data has a hash, which maps the corresponding data that’s verified using a unique fingerprint. “It’s BitTorrent plus git plus digital signatures”.
There are three main sub-system of the Holochain platform:
2) Local Source Chain.
3) Shared DHT
But the most important service of a Holochain application can provide is the cross-reference of validation rules, shared by all, to verify that the data held in the shared DHT haven’t been tampered, counterfeited, and or lost.
Constructed with data integrity as a foremost priority, Holochain, unlike other distributed databases will have no methods for a user to directly interact with stored data. All exchanges happen through the application code which will enforce any business rules, application logic, or restrictions necessary. Each application is defined by its own set of rules and permissions will be adjusted as required for their individual needs.
Unlike a typical blockchain with shared global ledger, each Holochain user has a local chain. Interactions between multiple parties are verified, signed, and committed to their respective chain using a unique signature before any data is published to the shared DHT by each party. This authentication process eliminates the need for a global ledger, the bottleneck currently inhibiting scalability.
This design eliminates the limitations and resource requirements necessary to maintain a network-wide global consensus. The lowered required costs could enable compatibility to a broader demographic of devices that will be able to support Holochain such as cell phones or tablets.
However, ensuring the proper verification of activities across a large network is not an easy task. To achieve their goals, Holochain will have to depend heavily on hashing, digital signatures, and digital hashing tables in their infrastructure. Each chain will validate activities across the platform using distributed hash tables and enforce the validation rules on data against the signed chains where the data originated.
Each exchange of data is validated and cross-referenced against an immutable cryptographic record to verify that the source of data is authenticated with their chain’s unique digital signature and holding actions accountable. The process is comparable to the biological process of cell replication using copies of the same DNA, ensuring proper compatibility and interactivity of chains.
DHT, or Distributed Hash Tables, are a class of decentralized distributed system and is designed to provide services similar to a hash table. Pairs of key and values are stored in a DHT, and any participating nodes can retrieve the values associated with a given key. Keys are unique identifiers which can map to particular values that can be anything from addresses, to documents and arbitrary data. This same concept is what powers peer-to-peer file sharing (bittorrent).
Holochain’s DHT can confirm the originating source, and validate signatures of all available data within the network. Transactions and exchanges create a crossing of chains that is recorded and published by others, maintaining accountability. The cross-chain verification ensures that in the event of a compromised user, the DHT would not validate altered behaviors. Meta-data can additionally be included in the DHT, and used to publish information such as transaction records, or data elements like tags, comments, or ratings.
Holochain’s token, HOT, is the native, asset-backed, utility token that will fuel the ecosystem of the platform. It is the incentive that will facilitate user participation and collaboration within the network.
Due to the architecture of Holochain, the token has inherited a few key properties and benefits such as being entirely peer-to-peer in operation, offering high transaction speeds and low fees. Because every host node is operating by known and shared guidelines, the currency is rendered accountable and transparent. In addition, a mutual-credit accounting system provided by Holochain is capable of performing billions of daily micro-transactions.
The Mutual Credit system is hardcoded into Holochain, and uses a double entry accounting system that will support scale, ease of reconciliation and transparency.
HOT can be considered a currency that is a contractual service obligation, redeemable for hosting. In fact, it’s primary use is for Holochain application providers to pay Holo hosts for the services.
HOT trades primarily on Binance in BTC, USDT, and ETH pairs, with FatBTC (an exchange with a larger Chinese trader-base) accounting for 10-15% of the trading volume routinely on the ETH pair.
Consumers of Holochain are well-versed in cryptocurrency, but have also sipped the Kool-Aid when it comes to $HOT. Holochain traders can be compared similarly to Tron traders, in that the emotional attachment of their trades and investments often overshadows the logic of upcoming market direction.
That being said, HOT tends to move through relatively predictable market cycles, as of this posting, the market cycle is “downturn” with sell-off to the low 20’s sats possible in the coming days/week. The probability of Holochain breaching the all-time-high in 2019 (again) are fairly high, given that the market cycle upturn of Holochain should start in April, and could continue through the summer, pushing the price up from the low 20’s sats to upwards of 40-44 sats by August, 2019.
If you’re looking for HOT over a penny (USD) anytime soon, don’t hodl your breath.