The Holo (HOT) cryptocurrency and its Holochain protocol provide developers with a framework for creating decentralized applications (dApps) and is positioned as an alternative to a 100% blockchain. Although blockchain is used in Holochain, there is no dependence on the blockchain; instead, there is an agent-centric system that makes it possible to avoid maintaining global consensus, in which each agent stores a personal branch of information.
The agent-centric system makes it possible to avoid the scalability problems that hinder blockchain solutions. It also allows any applications hosted on Holochain to do much more with fewer resources than is required when using blockchains.
A traditional blockchain works by storing data through cryptographic hashes in a distributed network. Each node in this network maintains a full copy of the block chain and a shared consensus to verify the network and preserve its integrity. This is one of the features of blockchain technology that was a strength of the new technology.
However, blockchain technology has its drawbacks. One of the problems that blockchain developers face is scalability issues arising from the fact that each network node must verify the entire network. Since the volume of data in the blockchain is constantly increasing, it increasingly limits the throughput of transactions in the blockchain. This is why in some cryptocurrencies the speed of conducting transactions is rather low and the network fees are so high.
The names Holo and Holochain appeared because the system used by Holochain resembles the design of a hologram. In a hologram, a coherent three-dimensional image is created by a special interaction of light rays, and in Holochain the system similarly creates a coherent whole by combining individual components into a single whole.
The Holochain system eliminates scalability problems by not requiring each node or agent in the network to constantly update records of the entire public block chain. Instead, each node has its own block chain that interacts with the node's unique cryptographic key. Imagine the entire public blockchain as a river, and each node is like a small stream that flows into the river.
If a node goes offline, it creates a branch of the public chain, but the public chain continues, without losing the other nodes (streams). Instead of each node maintaining its own copy of all the data in the entire block chain, the central Holochain chain maintains a set of rules for verifying the data in each node's block chain. This verification occurs on a distributed hash table - this is the part of Holochain that is actually stored by means of blockchain technology.
This means that when a node goes offline, its data is not lost in the public block chain. Instead, a limited copy is maintained and verified according to a set of rules. As you can read in the frequently asked questions section on the Holochain website, the developers compare the system to how a living organism stores information in DNA, or to how languages are stored among people.
"Where is the English language stored?" the Holochain developers ask in the FAQ. "Every speaker carries it. People have different areas of knowledge or are exposed to different slang or specialized vocabularies. No one has a complete copy, and one person's version is not the same as someone else's. If half of the English language speakers disappeared, it would not greatly degrade the language."
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