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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.

For More Information

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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Power Ledger (POWR) Reaps Benefits of Good-Guy Image with 45% Weekly Growth

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Power Ledger (POWR), the blockchain-based democratizer of the energy industry, gained 45% on its value over the past week. While 68% of daily trades came from Korean markets, it was Western eyes which were focused on Power Ledger this week.

Coverage in Huffington Post, and a nomination from Newsweek in their ‘Blockchain Impact Awards’, both added to POWR’s growing reputation of one of crypto’s good guys.

Power Ledger’s Good Rep

Coming hot out the gates with a plan to democratize the energy sector by cutting out third-party middlemen, Power Ledger got off to a promising start when it launched in late 2017.

Only a month or so after trading commenced, POWR got swept up in the altcoin pump of January 2018 and charged ahead to 3,919% gains, and an all-time high of $2.01.

Power Ledger’s aim to put (literal) power back in the hands of the average citizen made it an instant media darling. Its reputation as one of blockchain’s good guys, or gals, may also have been helped by the media focus on co-founder Jemma Green – one of the few women currently involved prominently in the blockchain space.

Blockchain Impact Awards

The first ever Blockchain Impact Awards, held by Newsweek, lists Power Ledger as one of the nominees for the upcoming ceremony.

“Newsweek is working with global experts in the blockchain world to present the first ever Blockchain Impact Awards. The awards will recognize entrepreneurs and enterprises that are developing blockchain applications to accomplish a social good.”

Power Ledger is up against 24 other blockchain projects – none of which are as instantly recognizable as the still fairly unknown Power Ledger. The next most known project among the nominees would perhaps be Akoin – the project founded by U.S-Senegalese rapper, Akon.

Huffington Post Likes Power Ledger

Power Ledger was given the spotlight in the Huffington Post before its ICO was even over, back in 2017. This week saw another focus article dedicated to Power Ledger, this time covering co-founder Jemma Green’s position as a female role-model in the blockchain industry.

Yet the promise of Power Ledger may run deeper yet. A single mother of two when she launched Power Ledger, Green has already met with the likes of Richard Branson and Elon Musk – both of whom have shown interest in the project.

Power Ledger Price

The last seven days have seen POWR wake up after a long and painful descent through 2018. From a weekly low of $0.070057 seven days ago, POWR surged 45% up to Friday morning’s price point of $0.102010.

The late night peak of $0.112617 took weekly gains to 60%, however much of that faded away by the time Western traders woke up for the day. The recent daily volume peak of $15 million is the highest in almost three months, with the POWR/KRW trade to thank for 68% of it.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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4.5 stars on average, based on 123 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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What is Optimal Shelf Availability Token (OSA) – And Is it Worth Your Time?

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Optimal Shelf Availability Token (OSA) splashed onto the first page of CoinMarketCap this week when its token circulation stats were updated.

While the coin price remained the same, the token’s market cap jumped 200% in a flash – possibly a result of locked-in ICO funds suddenly becoming available, although different sources report varying circulations at this time.

So what is Optimal Shelf Availability Token? Is it worth your time, or is it just another shitcoin with a ridiculous name?

Optimal Shelf Availability Token

Well, the answer might surprise you. At first glance, OSA actually seems like one of the more promising projects to pop up in recent years – and that’s coming from such a cold-hearted cynic as myself. The team’s self-description sounds common enough:

“OSA is a decentralized, AI-driven blockchain platform that collects and analyzes data from retailers, manufacturers, consumers and open sources real-time.”

The first thing you notice as you land on the project website is a claim that such global brands as Coca-Cola, L’Oreal and Danone already use OSA’s services. As you scroll down, you realise that Optimal Shelf Availability Token is targeting the retail supply-chain industry – and that those claims about Coca-Cola and co are actually…kind of true!??!

Well, for six months the Russian wing of the Coca-Cola HBC (Hellenic Bottling Company) rolled out the OSA tech in a number of retail stores. Over the span of the six-month pilot program, sales increased by 10% – as covered in this report.

When L’Oreal initiated the pilot, sales also increased within a two-month period, but were actually down for the rest of the experiment compared to the control group. More can be read here.

Manga & Marketing

OSA is the first crypto project I’ve seen that comes with a manga comic dramatizing its use-case – two comics, actually. The professionalism of the website compared to some of the tokens recently reviewed on Hacked is night and day. Multiple technical documents are made available for public consumption, including several whitepapers, annual and quarterly reports, and research papers.

The project’s Bitcointalk forum page was launched last April, and is currently 61 pages long. Contributions from the team are regular, and an extension of the bounty program was recently initiated to celebrate the token’s ascension through the rankings.

All of this can seem great at first sight – but, like a thirsty man in the desert, when you’ve been deprived of nutrition for so long, just about anything is going to look good compared to the mass of shitcoins we’re constantly exposed to.

The level of professionalism, and amount of goodies, on the website almost makes me suspicious. Like the polished veneer is only there to compensate for other shortcomings. But that’s coming from a tired mind, grown weary from having its cynicism confirmed on so many occasions.

OSA Price

Despite the recent ascent in the past week, OSA lost 17.98% in the previous twenty-four period, falling from $0.045754 down to $0.037524.

The Bibox exchange processed over 98% of daily trades via OSA/ETH and OSA/BTC, with CoinEgg making up the rest of the $1.3 million daily volume.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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4.5 stars on average, based on 123 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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Stellar Price Analysis: Grayscale Announces XLM Based Trust; XLM/USD Stuck Within Bearish Structure

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  • Global digital asset management firm, Grayscale, has announced an investment vehicle based around XLM.
  • XLM/USD is moving within the confinements of a bearish pattern structure, subject to a breakout south.

XLM/USD has been subject to very narrow and choppy trading, which has been going on for the past eight sessions now. Price action is moving within a range-block formation, which is seen across the board with several of its peers. This type of behavior does indicate of some potential vulnerabilities to the downside.

The current consolidation mode taken up came into play after a prior period of range-trading, which saw a deep breakout on 10th January. XLM/USD had plummeted by a hefty 20% to its lowest levels seen since 17th December. Despite the mid-December bull run, which was seen to the end of the month, it has not escaped the bear market. Therefore, bull rallies continue to be sold with some force by the bears.

Grayscale Stellar Lumens Trust

Grayscale Investments, a global digital asset management organization, has announced the launch of an investment vehicle based on Stellar Lumens (XLM). This is aimed at giving investors exposure to the cryptocurrency XLM. It is the sixth largest by market cap, just over the $2 billion mark, at the time of writing.

The asset management company tweeted via their official account, “We are excited to announce two big developments! First, today marks the launch of Grayscale Stellar Lumens Trust! Investors can now gain exposure to the price movement of XLM through a traditional investment vehicle.”

Grayscale’s Managing Director, Michael Sonnenshein, noted that this Stellar product that they have introduced was brought in on the back of investor demand. Furthermore, he details that Grayscale’s push to offer investors exposure to “established blockchain projects with substantial traction and resources.” Sonnenshein lastly concluded by noting he is bullish on Stellar and the real use cases that it brings.

Technical Review – XLM/USD

XLM/USD daily chart. Price action is moving within triangular structure.

Price action is currently moving within a triangular pattern structure. XLM/USD has been trading within this since the start of December. The lower support was tested to the downside on 14th December at around $0.094000-$0.093500 prior to the big bounce. Life kicked back into the bulls, forcing the rally up to the tracking resistance, around $0.131500. Furthermore, the pattern has further been confirmed, with several tests to the lower and upper acting trend lines.

Lastly, in terms of the described structure, it can also be perceived as a bearish pennant formation, which again point to downside. Support is currently tracking around the $0.107000 area, and a failure to hold will see the December low retested to the downside, $0.093500. Immediate resistance can be observed at $0.120000-$0.1215000.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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4.6 stars on average, based on 110 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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