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Holochain: The New Blockchain? A Look Beyond the Hype

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Introduced in Satoshi Nakamoto’s 2008 whitepaper, Bitcoin was truly groundbreaking and has obtained great success and popularity for the last ten years.

Consensus or coming to agreement on the state of transactions is established in a decentralized manner with multiple parties through a method called proof of work.

Many miners process sets of transactions called blocks and the miner who finds the right nonce (string of random numbers) necessary to add a new block to the one before it is rewarded with some Bitcoin. Blocks form a chain of blocks known as the blockchain, which is a series of blocks (which are series of transactions themselves) that collectively represent all Bitcoin transactions since Bitcoin’s initial block, known as the genesis block.

All nodes (computers, servers, etc. that may or may not participate in mining) host copies of the same blockchain, which ensures that blockchain integrity is maintained and that there is no single point of failure when it comes to potentially losing the record of Bitcoin transactions. Changing the blockchain is impossible without gaining control over a majority of the network’s hashing or computing power, a feat that is considered implausible due to exorbitant computing costs.

Bitcoin’s approach allowed the creation of the first digital currency that overcame the double-spending problem (sending one transaction then another after it to negate the first), as no one can send such fake transactions without all other nodes knowing due to everyone having the same copy of the blockchain.

However, in recent years, the proof of work method has proven to be unable of processing large amounts of transactions efficiently, which is worrisome if Bitcoin is ever to gain more widespread adoption.

Different approaches to this problem have proposed.

Projects like Ethereum and EOS have proposed their own respective solutions to solving the problem of “scalability” (improving blockchain protocols so that they can handle a large scale of transactions without issue), yet no project has actually been proven on a commercial scale.

Holochain: Solving Blockchain Issues without a Blockchain

Holochain is yet another contender in the fray. While it aims to provide a solution to the scalability question, it takes quite a different approach as it technically isn’t even using a blockchain.

As stated on Page 1 of the Holochain whitepaper, Bitcoin’s approach to the problem is a data-centric one that focuses on creating a single, shared data reality (in this case the Bitcoin blockchain) that is hosted by all participants.

While this approach has proven to be great over the past decade or so of Bitcoin’s existence, it has come at the cost of scalability as mentioned, as coming to consensus via the computationally-intensive proof of work method is complex (takes time) and currently not suitable for large amounts of transactions.

Holochain’s approach is an agent-centric one, enabling the sharing of independently evolving data realities amongst participants as long as some ground rules are established and adhered to by participating agents or users. Git is the most well-known project with this approach, creating forks when differences of certain degrees are made in the code, allowing two projects to exist on the same fundamental layer. Just as different species come from the same origin, different applications can emerge from the same layer.

However, this may cause one to wonder how it’s possible to have a consensus between non-identical realities. As Holochain has no one, global shared state, there is neither consensus nor a single ledger. This is an extremely important point that one can miss easily: Holochain is not your everyday blockchain or even a blockchain.

Holochain’s and Distributed Hash Tables (DHT)

What makes Holochain different from traditional blockchain is distributed hash tables (DHT), a decentralized storage system most known for its use in torrents. In a DHT, while downloading a file, for example, you don’t download data from one single source. Instead, you download different parts of that file from different hosts.

In the same manner, Holochain nodes don’t have to share a single, global state, (e.g. a ledger of all transactions from beginning to end as seen in “traditional” blockchain systems) as long as some nodes can “piece together” parts of a whole (DHT).

Increased Flexibility (and Responsibility) for Developers

Bitcoin has no room for varying validation rules out of the box, thus giving the network participants no flexibility (unless soft forks, or software changes, are implemented, or hard forks, which can even create a different Bitcoin, such as Bitcoin Cash, Bitcoin Gold, and so on, take place).

On the other hand, thanks to its feature called DNA, which are the pre-established “ground rules” set by participants in a decentralized application’s (Dapp’s) system, Holochain allows Dapp developers to have increased flexibility to choose and implement their own rules as long as they do not contradict DNA. It’s important to note that DNA is inherent to each Dapp. In other words, each Dapp has its own DNA or rules for “consensus”.

Something to note, though, is that DNA places more responsibility on developers, who have to set quality DNA before building out a Dapp ecosystem to ensure that the Dapp runs smoothly. Giving more flexibility to developers (which also means more responsibility) could prove dangerous, as seen in the case of Ethereum.

Ethereum uses a fairly open-ended programming language called Solidity. While developers have more free reign in designing their Ethereum-based Dapps and smart contracts, this has led to numerous issues, such as The DAO hack, Parity wallet hacks, and other mishaps, as developers have been unable to develop their solutions properly.

DNA and Immune System as Holochain Security

DNA also acts a security measure. For instance, imagine a Holochain Dapp called “Ourbnb” (Holochain-decentralized version of Airbnb) with DNA that stated that an Ourbnb host couldn’t rent an apartment to two parties at the same time. If user(s) try to initiate a transaction that goes against this DNA and rent out an apartment to more than one party, the transaction would automatically be rejected by the other nodes in the Ourbnb network.

Another security feature that Holochain has is the immune system. Nodes look at their DHT and the various Dapps and their respective DNA that they have. When certain actors are determined to be breaking DNA rules, nodes communicate this information to each other, and the bad actors are shut out of the Holochain network.

Token Economics

Holochain has a token called Holo Token (HOT), which is rewarded to nodes for running Holochain software and hosting Dapps.

Therefore, while “traditional” software providers, such as Airbnb, are responsible for not only building out applications but also providing the hosting and security, on Holochain, Dapp developers build out Dapps while nodes host them and uphold security by enforcing DNA rules and using the immune system to cross-check for bad actors.

75% of HOT tokens were distributed via the Holo Token ICO and 25% are held by the team and organization.

Token Sale Metrics

The Holochain ICO raised 30,202 ETH. The soft-cap was determined to be €1 million, but the team successfully collected more than €20 million. The price per token was approximately €0.0001.

According to the Allocation of ICO Funding by Amount Raised table on the Holo Token ICO page, 15% of the collected funds were allocated to Holo development, 10% to Holochain development, 40% to currency reserves, 10% to infrastructure, 10% to operations, 5% to support of developers, hosts, and app providers, 5% to marketing and communication, and 5% to events and programs.

Team

Chief Architect Arthur Brock: Brock was the CTO at Targeted Currencies Network and is the founder of Metacurrency Project. As both jobs were focused on creating alternative digital currencies, Brock has been working on digital currencies since 2001, or before Bitcoin was even conceived.

Verdict

Below is a breakdown of the risks and growth potential of Holochain.

Risks

  • As Holochain is quite different from traditional blockchains, it is hard to make any guess on its future and its adoption, which is a crucial step for long-term success. (-2)

Growth Potential

  • A unique approach to the consensus problem that could solve blockchain’s current limitations. (+1)
  • Not a “whitepaper project” – developers can get started building on Holochain. (+2)
  • ICO went smoothly and was structured to prevent centralization in terms of token distribution amongst ICO contributors. (+1)
  • In addition to the above, no crazy private or presale deals (large bonuses, no lockups/vesting for large bonuses, etc.), which prevents token dumps by large, early-stage investors. (+1)
  • The project lead Arthur Brock has been working on alternative digital currencies and peer-to-peer technology since 2001. (+1)
  • Low $20m ICO hard cap (as of writing, $175m market capitalization) vs. other projects, such as EOS and Dfinity, which have raised billions of dollars. A lower market capitalization could leaving more room for HOT price appreciation. (+1)
  • Marketing for the project seems to have taken an organic approach, with the community being Holochain’s biggest evangelists, as evidenced by social media support and activity (comments, likes, etc.) on platforms like Reddit and Twitter. (+1)
  • Support from Mozilla CFO and Netflix Co-Founder Jim Cook. (+1)

Disposition

Holochain is a platform based on a quite different agreement mechanism than traditional blockchains. Due to its data-centric nature, Bitcoin meets with many problems such as inefficient mining. While Bitcoin forces one shared reality (the Bitcoin blockchain) on the entire network, Holochain allows people to have free will and their own realities as long as some ground rules are accepted by participants. While it’s too early to tell if Holochain can achieve its goals, the project’s novel approach, working product, fair ICO structure, team’s background in digital currencies and peer-to-peer technology, lower market capitalization relative to other big projects, and community support on social platforms as well as from tech industry heavyweights like Jim Cook could prove favorable in terms of the project’s investment potential. Holochain receives a 7/10.

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Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Electroneum Coin Price Surges 31% On Launch of Instant Crypto Payment App

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The newly launched beta-version of the Electroneum mobile payment app went live this week. And as successful reports filter in from testers from around the globe, the good news is translating into positive sentiment on the exchanges for the ETN coin.

ETN Price On the Up

In the twenty-four hour period leading up to the morning of September 20th, ETN gained 31% on its value. The coin price climbed from the daily low of $0.005203, up to the latest peak of $0.006827.

New volume continues to pour in at time of writing, after climbing throughout the day from around $180,000 to $570,000 – just over a 216% increase. Weekly gains stand at 34%, but only really heated up in the last two days as news of Electroneum’s app came to be known.

ETN/BTC trades are the most dominant, with over 80% coming from Cryptopia and Kucoin alone. The coin had long been lingering outside the market cap top one-hundred after 85% losses from Q2 into Q3.

All-time lows were reached as early as April for ETN, and the coin continued to notch up new lows right through the year. Sentiment had perhaps soured on the coin after the company website suffered a DDoS attack in April of 2018, prompting them to lock user accounts and deny access to funds while they attempted to address the problem.

Electroneum App Rolls Out

The beta-version of the app was released this week, and Electroneum’s twitter feed was inundated with accounts from individual and business users who had successfully tested the product.

One video showed a merchant in Egypt demonstrate setting up the app to transact with the existing retail API most prevalent among retailers in the nation. Another batch of tests were carried out by users on Reddit, who successfully transacted some ETN between Japan and the U.S in a matter of seconds.

Last night, founder and CEO Richard Ells released this blog post celebrating what appears to be a successful beta-launch, saying:

“Easy access for users was the first step and we’ve now had over 1m app installs and we’re proud to say the Electroneum app has the same retention level as Instagram (®)!”

According to Electroneum, they currently have over 1.6 million registered users. If true, that would make it one of the most adopted crypto apps to date. The blockchain-based social media site, Steemit, has been around for over two years, and has just over 1.1 million registered users.

It’s worth noting that the app requires some level of centralization. Essentially it is running a centralized app on top of a decentralized blockchain. The company say this is required since waiting for block confirmations would make merchant payments impractical.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 58 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Five Bullish Coins That Have Bucked 2018’s Bear Market

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This year marked the third bear market in the history of Bitcoin; a year in which BTC lost 70% of its value, and the second biggest cryptocurrency, Ethereum, lost 85%.

Looking down the list of altcoins those numbers don’t get any better. At least not for the majority. However, there are a small handful of cryptocurrencies that have quietly bucked the 2018 trend, and have carved their own successful path through the crypto landscape.

Some simply weathered the storm better than others, while several diverged completely from the surrounding market. Here are five of the most bullish coins and tokens of 2018 so far.

Chainlink (LINK)

There was hesitance to include this token in the list since it followed the rest of the altcoin market in a 37% decline between the dips of April and June. But ever since then it has been nothing but upward trajectory for LINK as it maintained higher lows even throughout the dips of August and September.

Recent news that Bithumb is to add Chainlink resulted in another pump for the token in mid-September, and could help snare another higher low when the next dip comes.

DigiByte (DGB)

Lowers lows have been common throughout every dip of 2018, yet DigiByte has managed to achieve just the opposite. The DGB/USD valuation has been sustained by higher lows through every dip of the year.

From early April’s low of $0.016689, DGB went on to $0.018986 by the dip of late June – a 13.8% rise. For some perspective, Bitcoin lost around 10.7% in the same timeframe.

From there DGB kept on rising despite fluctuations, and by August’s dip had gained another 10.8% as it hit another higher low of $0.021042.

In fact, the dip of September 12th is the only time this year that the DGB valuation has recorded a lower low. The price of $0.020744 recorded on that date marked a 1.4% loss for DGB since the previous low, although it has since recovered 25% of that figure and returned to the $0.025 range.

Metaverse ETP (ETP)

Metaverse ETP sunk throughout the summer months like most, but from the end of June has grown 484% in value, rising from a valuation in the $0.50 range, up to the latest coin price of $3.14.

The rise of Metaverse throughout Q3 came as a surprise to many, and few have been able to pinpoint a clear catalyst. However, the coin is heavily traded against the Chinese yen, and is finds itself heavily wash-traded and used for transaction mining on the TOPBTC exchange.

Binance Coin (BNB)

Q3 of 2018 has been less kind to Binance Coin than the preceding quarters, but the fact that BNB has recorded net gains for the year makes it worthy of a mention.

BNB’s actual token price on January 1st was $7.96, meaning Binance Coin has grown 21% over the last nine months up to the current price in the $9.70 range.

At one point BNB had surged 119% for 2018 when it reached a valuation of $17.44 on June 7th, but that momentum couldn’t be sustained.

Dogecoin (DOGE)

Unlike some of the coins mentioned above, DOGE did fall to consecutive lower lows throughout most of 2018, but Q3 saw a brash reversal of fortunes as it was added to Yahoo Finance, and Elon Musk began to take an interest.

From August’s low in the $0.00214 range, DOGE climbed 161% to the currently traded price in the $0.00561 range, completely subverting the majority of the market in its ascendance from joke coin to trend setter.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 58 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Volatile and Illiquid; Aurora (AOA) Backtracks 55% After Recent Gains

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Aurora (AOA) has proved one of the most illiquid and yet most most volatile cryptocurrencies in the market cap top one-hundred in the past week; gaining 409%, and then losing half of it all within the space of seven days.

All of this activity originated on just one exchange, Kucoin. That is unless you count the five dollars worth of AOA tokens traded on Bitinka. Wednesday morning’s snapshot shows a coin that has endured a +450% swing in the past week – fuelled by a community social media bounty and a rather bold piece of hype-making by the Aurora Twitter team.

AOA Sinks 55% After 409% Gains

From September 12th’s low of $0.008640, AOA tokens surged off of Kucoin’s BTC and ETH buys up to September 17th’s token price of $0.044022 – marking 409% gains over five days. The majority of this activity was founded on less than a million dollars worth of trades, with AOA volumes almost quadrupling from the $280,000 range, up to around $920,000 on Sept 17th.

What took five days to build was then destroyed in less than two, as AOA plunged by 55% down to this morning’s valuation of $0.019418. The previous week’s surge had triggered several articles speculating on the promise of the Aurora platform, but ultimately the skeptics were correct and what went up predictably came back down.

The brief but effective piece of market making has undoubtedly seen a small number of traders take huge profits on Kucoin in the past week. The majority are likely nursing double-digit losses this morning after the sell-off over the last two days.

Hype Triggers Trades

As covered here in the run up to AOA’s recent peak, the Aurora community had been engaged in a social media bounty campaign to celebrate the launch of their new Berlin office.

The increased flurry of online activity likely acted as a trigger for the the week’s market making, and may have been helped along by this teasing image by the Aurora Twitter team. The image shows Aurora’s logo floating above a pair of smartphones, accompanied by the text:

“Faster TPS is just the beginning. #Aurora #AOA #Apple.

As far as I’m aware, Aurora has not yet partnered with the world’s first trillion dollar company. The image could be relating to an upcoming app that may be available for use by Apple phones, but the Aurora team remain tight-lipped at the moment, preferring to allow the speculation and chatter do its job.

It has been a frantic start for a token that only launched in June. The Kucoin listing only arrived towards the end of August, and we may be witnessing the turmoils of a newly launched token still attempting to find its value.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 58 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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