(HOT) – Holotoken
What is HOT?
HOT is the ERC-20 representation of holo fuel – the currency used in the Holochain system. First and foremost, Holochain is not a blockchain, a blockchain uses a data-centric approach to force all nodes in the system to reach consensus commonly known as consensus protocols. On the other hand, Holochain uses an agent-centric approach to distributed networking in which, each person maintains their own local chain as opposed to all agents maintaining a public chain as is commonly seen in blockchain. In addition, a distributed hash table or DHT is implemented meaning hash functions are still present in the system to ensure immutability.
Consensus is reached between transaction parties through validation of each other’s local chain by verifying past transaction data. Parties audit each others transaction history which ensures users have the credits they are spending. If user A finds user B does not have a correct amount the transaction becomes void. All parties sign transaction data to their local chains which is then sent and updated in the distributed hash table allowing for a much more scalable networking architecture.
Each program on Holochain is an application with its own unique “DNA” – or it’s consensus on validation rules – a malicious user would need to locally alter the “DNA” (validation rules) of an app to open the possibility of acting maliciously. Therefore, any node receiving a transaction with malicious intent would detect the changes in the local “DNA”.
After that, the node would then share the invalid transaction in the network to other nodes in the form of cryptographically signed proof of the misbehavior thereby labeling the node as untrusted. Because each program run on Holochain is an app with it’s unique “DNA”, all agents participating in that app system will be able to communicate with one another. Furthermore, the agent-centric model allows agents to be a part of multiple network apps simultaneously as opposed to miners in a blockchain being confined to a single network at a time.
In order to properly implement a self-regulating network ecosystem that can host distributed applications, Holo used a new approached for its accounting methods to improve efficiency as the system begins to scale by inviting stakeholders to participate in the system through their ICO (Initial Community Offering) – we will explain why it is not an Initial Coin Offering later. The tokens created represent the right for stakeholders to purchase hosting services through Holo in the future. The overall ecosystem relies on hosts to provide processing and storage for distributed applications while earning redeemable credits in the form of Holo Fuel.
Holo distributes hosting to remove the centralization of data centers creating the framework for a self-scaling, peer-to-peer architecture scaling to thousands or millions of peers through automatic load-balancing and load-sharing. Hosts will be able to turn a consumer-grade computer into a source of revenue, where they are paid to host distributed applications, and even be able to set their own hosting prices and priorities. However, it should be noted that hosts being paid HOT currency will not be mining. They are contributing computing power and storage space to the overall network and being rewarded for that as opposed to validating blocks on a network consensus algorithm.
There is already a large need today for the system Holochain is developing. Popular apps such as Wikipedia would not have to continue fundraising if they implemented a distributed application model, and social media apps like Twitter would not have to generate revenue through aggressive advertising tactics that allow the company to fund it’s massive infrastructure. By using Holo, these popular apps would grow revenue as their ecosystem increased in popularity by generating more hosting power from user volume.
Payments to users will be distributed in crypto-credits known as Holo Fuel, a currency specially designed for efficient high volume micro-transactions. In a sense, Holo Fuel is backed by a modern asset: computing power. More hosts entering the ecosystem over time will create more computing power which adds more value to the network. This increase in value will create higher levels of purchasing power for Holo Fuel, and effectively lower the cost of services. An example of payment flow would be as follows:
An application provider purchases hosting by buying credits from Holo, their means of payment is stored in a Reserve Account, hosts then generate signed service logs and submit a proof-of-service invoice to the App Provider for hosting their app. After the invoice has been received, Providers pay out Hosts in credits. Hosts will have the option to cash out the credits earned from hosting through the Reserve Account where the original payment was sent. Initially, cashing out will be handled in cryptocurrency, but over time there are plans to include national currency cash out features.
Holoports are networking hardware devices built to enable users to share or sell their computer spare capacity to help others connect to each other through peer-to-peer applications running on Holochain. With Holo, anyone can be a host online thereby giving the potential to do to the internet what AirBnB has done to the hotel industry. Hardware components for the HoloPorts has been purchased and the manufacturing process has recently begun. (9/29/18)
Currently, no more Holoports are for sale however, they will become available again at a later date through the upcoming Holo Store. There will be 3 variations of Holoports models, the Holoport Nano (1.2 GHz Quad-core, 2GB RAM, USB 2.0), Holoport, and the Holoport+ (3.8 GHz Quad-core Octa-thread, 16GB RAM, 2TB HDD + 128GB SSD, USB 3.0).
Not a token, not a coin. Crypto-accounting currency.
Holo has created a new breed of cryptocurrency in that, Holo is not a crypto-token or crypto-coin instead, it is a mutual credit accounting system in which each transaction is countersigned among counterparties on their local chains. Blockchain-based currencies are token-based meaning, a cryptocoin is a virtual token with a correlating value and a private key, which is used to spend the coin. A blockchain ledger corresponds to a list of all the coins in the ecosystem, by recording the creation of each coin and each transaction that follows. Another trait of blockchain, is each transaction technically “destroys” prior coins when they are spent and creates new ones that are distributed through consensus algorithms to miners. Therefore, a blockchain ledger must exist for all nodes to reach a consensus on which coins have been created and destroyed. In a system where no coins exist, there is no consensus required.
Instead of a token-centric economy that requires computation power the run the system by verifying consensus, Holo employs an agent-centric approach. In this method, there is no global ledger of coins, each agent (user) manages their own local chain of transactions meaning, each person’s balance is encoded on their own chain. In this way, consensus is not needed from every node helping to maintain the system.
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 pre-sold amounts are credited to the buyer’s account. Each credit transaction in the system is mirrored by a debit action.
Due to the network infrastructure of Holochain, Holo can compete with existing cloud hosting companies without the need for significant physical infrastructure or capital investment. In addition, there is virtually no real competition in the crypto space in regards to scaling distributed applications and reaching mainstream users. Because Holochain is a generalized crypto application engine, they are able to fulfill many of the promises seen in other crypto projects. Holo has already built-in, already building, or plans to begin building applications to address many of the problems witnessed in the crypto space including, decentralized storage, application scalability, and decentralized secure identities.
Holo does not claim to have identical functionality, features, or user experience to each of the projects, but rather they have identified these core problems relating to decentralized application integrity and have begun to address them in their own way.
Additionally, Holo will be focusing their core business model of hosting. With the cloud computing sector projected to reach $411 billion by 2020.Furthermore, estimates project 83% of enterprises workloads will be hosted via cloud services by 2020. Initially, Holo is a hosting business that can grow and scale is hosting capabilities with very little capital investment. Holo believes there is enormous market potential in the cloud hosting industry to benefit from. Currently, the cloud computing industry is dominated by a single player, Amazon Web Services. In this market, customers are looking for solutions outside of this monopolistic service meaning there are unmet needs in the market thereby creating competition and providing opportunity.
Arthur Brock, Co-Founder, Chief Architect –
Originally, Arthur worked at GM, Chrysler & Hughes, in Artificial Intelligence. Soon after, he chose to bring intelligence to social architectures instead of computers. His 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, efficient resource sharing & management, and community & environmental impact assessment.
Eric Harris Braun, Co-Founder, Executive Engineer –
Previously, Eric graduated from Yale University, and in 1994 he published the Internet Directory which sold over 100,000 copies and went on to sell a second edition in 1996 before being made Obsolete by Google. In addition, Eric is the co-founder of the MetaCurrency project, Glass Bead, and Harris-Braun Enterprises, a freelance software development shop, which has created complex data-collection websites for the healthcare industry, an android application for catch monitoring for the fishing industry, and the Online Writing Workshop.
Holochain has created a very unique distributed application framework for the cryptocurrency industry. The goals set in place by the team are tremendous however, they are well equipped to handle any upcoming obstacles. By taking an agent-centric approach to distributed networks, Holochain has the potential to become a highly-adopted project if the proper steps are taken, and challenges are overcome.
Investing in cryptocurrencies and Initial Coin Offerings or ICO’s is a highly risky as well as speculative financial maneuver. This article is not a recommendation by Cyber Lion Weekly or the author to invest in cryptocurrencies or ICO’s. Since each individuals situation is unique, a qualified professional should always be consulted before making any financial decisions. Cyber Lion Weekly makes no representations or warranties as to the accuracy or timelines of the information contained herein.