A deep dive into Holochain – what some are calling an evolution on blockchain technology, operating “in parallel to BitTorrent to power fully distributed apps”

Continuing our coverage of Holochain, the following analysis was written by Tristan Roberts and was originally published in Crypto Insider.

Tristan Roberts: Bitcoin made the impossible a reality, and Ethereum aimed to take that same utility into other domains. Artificial intelligences need not beholden to their human masters, and global organizations no longer need be at the mercy of a handful of executives. Truly cooperative, decentralized organizations seem to be just on the edge of becoming a reality.

However, despite all the possibilities that blockchain technology has teased us with, we’ve already started to see limitations: seemingly innocuous apps like CryptoKitties have made the Ethereum network grind to a halt, and multi-signature wallets have been accidentally, irrevocably locked. There are a lot of reasons why blockchains suck, but that topic is for another article. Instead we’ll see how scaling limitations can be overcome, with a particular focus on Holochain.

EoS, BitLattice, and Holochain are all examples of an evolution on blockchain technology. Technically, they are not even blockchains at all. Rather than a linear sequence of transactions – a series of ‘blocks’ – they are more like a mesh of transactions. They all provide cryptographic control of information, but none of them require nearly as much storage and processing power as Bitcoin and Ethereum.

This next generation of crypto-networks have some parallels to how Einstein uppercut Newton. Rather than spend huge amounts of energy to construct an objective reality, these fledgling networks have a more relativistic perspective. Data is verified locally, rather than through global consensus mechanisms that make a linear, absolute sequence of events.

Your dear author has quested across the globe in search of what is ‘next’, and nothing seems to answer that question as thoroughly as Holochain.

Holochain is not a blockchain. It’s more like “git repositories for each agent which can be published, shared, synchronized or merged via a BitTorrent-like DHT (Distributed Hash Table)”. This shift to ‘agent-centrism’ rather than ‘data-centrism’ is important. Each application has its own Holochain, and each agent has their own chain. Rather than spending an absurd amount of energy to craft a single record of events, Holochain allows people to write anything to their own chain. However, transactions that violate the rules of the application (such as me saying that you gave me all your tokens) won’t be propagated by the network.

What does this mean to real people? Well, imagine Facebook without Zuckerburg sucking up all the wealth. Users get paid for their posts and for the data they generate – if they opt in to their data being sold. Imagine Uber owned by the drivers and riders; AirBnb owned by the hosts and guests. Strangers can interact collaboratively in a high-trust manner, without a profit-seeking corporation sucking up all of the ‘value’ it can.

Holochain is not just a way of verifying and controlling data. It is also a way of hosting that data as well: Ethereum meets the Inter-Planetary File System. When a request is made to see new messages on Holochain’s Twitter-killer, Clutter, the data is sourced from nearby nodes and comes in gradually like flowing water rather than being delivered in a single dump from a centralized database.

When you add something to a holochain, you sign it, append it to your own chain (like in Hashgraph, the latest entry is hashed to confirm the whole history is valid), and submit it to the Distributed Hash Table, which makes sure it conforms to that chain’s rules. You are also receiving and checking other people’s transactions in the process. Each application is its own Holochain, and a cell phone can easily act as a node for multiple Holochain apps.

Yes, there will be an ICO. Holo, the creator of the open-source Holochain, is framing it as an “initial community offering”. Unlike most ICO’s, Holo has taken great effort for this offering to be not just legally compliant, but perhaps even ethical. One of the founders, Arthur Brock, makes a solid point: most blockchain enthusiasts deride ‘fiat’ currencies as coming from nothing. But if a credit – say, a bitcoin – is made without a corresponding debit – then it is also coming from nothing, and is just as aptly labelled ‘fiat’ as notes from the Federal Reserve.

Holo is taking a different route. The credits that they offer during their ICO will be matched 1:1 to debits for their organization. Their organization will alleviate this massive deficit through a 1% transaction fee on the network. Similarly, each user is able to be either negative or positive, however, a much smaller debt limit than the Holochain organization.

Much of Holochain’s core infrastructure is already in place – proof-of-concept applications are already running. Thus, they are framing this as an ‘initial community offering’ – seeking enough Ethereum in order to make the community grow organically over time, rather than simply hoarding more Ethereum than they could ever hope to responsibly use like some upstarts.

Holo has already had a very successful crowdfund on IndieGoGo, primarily offering lightweight computers to act as nodes in the network. Much like Ethereum’s ICO, Holochain’s token offering keeps getting pushed back; perpetually just 2 weeks away. You can stay posted here.

If you are just interested in making mad returns on your cryptoinvestments, the remainder of this article is probably not for you. However, if you have a gut feeling that sexy distributed networks might just change how we interact with each other for the better: read on.

Metatcurrency Project & Ceptr

Holochain stems from a decade-old project re-evaluating some of the basic fundamentals of how we interact with each other. Theis Metacurrency Project in turn gave birth to Ceptr, a re-imagining of computer systems, based on mimicing biological processes rather than using cold, hard, centralized logic. The hope is that Ceptr will sprout out of Holochain, which the group believes is a necessary foundation for their loftier ambitions.

The Metacurrency Project’s starting point is viewing the universe as being made of language. Language is made of:

• Carriers, such as paper, lightwaves, soundwaves, and electricity
• Receptors, which transforms signal A on carrier X into signal B on carrier Y e.g. the ear transforms soundwaves into neural impulses, a microphone transforms soundwaves into electrical impulses, a speaker transforms electrical impulses into soundwaves, a pen transforms muscular movements into writing.
• Protocols, the code, for example, binary
• Signals, the patterns themselves

There are levels here. It’s a fractal. If you read this sentence on a screen, there were the electrons that made light, light that made a letter, letters made words, words made sentences. The receptors are lightweight virtual machines. These are autonomous. Receptors are composed of other receptors. Receptors hold both code and data. Branches of the tree hold data-types (e.g. integer) and data.

What data-type is it receptive to? What data-type does it output? This builds meaning into the computing stack at the lowest level possible

You can’t store meaningless data. You can store an age, or a shoe size, or something like that. You have to say the meaning of it.

These self-describing trees with data incorporated can use different protocols, but reduce to one big interoperable, mashable system.

How might you see this principles actually bring value to your life? Imagine mashing together your emails, facebook feeds, tweets, texts into a single stream. Without organization, this would be a mess of information. However, an intelligent system could start to organize the flow of information; managing workflow with ticketing scheduling. Once the workflow is defined, currencies and wealth can be built on top. In many ways, currencies are used to prioritize how we spend our attention. Currently, Facebook and Twitter manage our feeds for us. They have their own motivations which are not always in harmony with our own well being.

In the same way there is a constellation of protocols, there are a constellation of currencies: for example, we have all probably used our reputations in some way to get money.

Ceptr is a protocol for protocols. It’s a low-level, fundamental protocol for how to structure data, organize processing, and communicate. In other words: TCP/IP for wealth.

Is system-wide consensus really needed for a simple transaction between two individuals? In Holochain’s agent-centric approach, each user marks the transaction in their ledger, and this is made public for those who actually need to know. False transactions are not allowed to propagate through the network, and those who make fraudulent claims are eventually pushed out of the network.

The MetaCurrency project rejects the deeply seated idea that scarcity is a necessary for wealth. “Rather than trying to make one global, anonymous, digital cash, we are interested in building a rich ecosystem of interoperable currencies.”

Non-fiat system of money

One of the most notable ways in which this group diverges from typical understanding of money is the use of ‘mutual credit’. As mentioned earlier, most currencies, including Bitcoin, are based on fiat. They mint the tokens by a line of cod, and trade the resulting tokens that are backed by nothing. This requires global consensus of the state of the ledger. This cannot be done on a Holochain, where local versions of the ledger fall out of sync by design (everyone has their own ledger, in other words). You can’t track the coins. But you can still implement money if you re-consider what money is; a non-fiat kind of money.

Mutual credit systems has been around for centuries. In a mutual credit system, units of currency are issued when a participant extends credit to another user in a standard spending transaction. Picture a new mutual credit currency with all accounts having a zero balance. The first transaction could look like this: Alice pays Bob 20 credits for a haircut. Alice’s account now has -20, and Bob’s has +20.

So instead of coins being issued backed by nothing, they are issued by the peer, in arrangement with another peer, by creating liability/debt. “Managing the currency supply in a mutual credit system is about managing credit limits — how far people can spend into a negative balance. Different systems set different rules about this, ranging from everyone having the same limit (e.g. 100 credits), to having NO limits and leaving the choice up to each person as to whether they want to extend more credit to someone deep in debt.”

Ceptr’s ontology of ‘wealth’ is slightly unusual; when they say their tech can measure currencies, that includes any resource. AirBnB reputation is a currency. A movie that has a high IMDB rating is wealthy in that sense. A college degree is a form of wealth. And of course, traditional paper money is a currency.

Too narrow a view of wealth is what causes negative externalities. You burn coal to make money, but ruin the air; you didn’t have good air on your balance sheet.

Wealth is currently one-dimensional. Ceptr is trying to build a more complex, expressive idea of wealth, analogous to the shift from oral knowledge to written. Wealth in their terms can be subjective/expressive, like satisfaction. The proposed system allows any receptor to make a statement, then consensus is negotiated. If they don’t come to consensus, that’s fine, they fork, or cancel the transaction. Each node has full authority to process its own transactions.

If Alice receives a transaction request from Bob, she checks his signed transaction chain to arrive at the current state of his ledger, and “If both nodes are in an appropriate state which allows the current transaction, then they countersign the transaction and append to their respective chains.”

When your node appends a mutually validated and signed transaction to its chain, it has updated its local state and is able to represent the integrity of its data locally. As long as each transaction (link in the chain) has valid linkages and countersignatures, we can know that it hasn’t been tampered with.

Most distributed apps have no need for consensus with the whole world. If I want to book your room, you & I have to make an agreement, no more. This seems to me a more in line with decentralization than what Ethereum or Bitcoin can provide.

If you’d like to learn more, a solid section of links is provided below. More than all of this technical knowledge, however, the reason why I support Holochain is its community. It is both literally and figuratively a magical group of people. When the authors met them in San Francisco, they were literally living cave like rooms, no bigger than the size of a bed. None of the people seemed to be there to get wealthy: all of them were passionate about building something better. Of restoring the internet to its former glory, before behemoths sucked up all the value.

RESOURCES

– Holochain Greenpaper

– Mutual Credit: Currency without Consensus

– Holochain Gitub Repo

– Holochain Overview <10 Minutes

– Two short videos for understanding what a receptor is: [1] [2]

–  Video on receptor-based computing

–  An hour presentation on Ceptr.

Note: I have not received any compensation from Holo other than a lovely meal at their former group home – the Holodeck – and a deep meaningful gaze into their spokesperson Matt Schutte’s eyes. \International pirate of intrigue Conor O’Higgins contributed substantially to this article.

This article has been edited publication to reflect the distinction between Holo and Holochain. It is republished in the P2PF blog with the author’s explicit permission.

Featured image from Ibrahim Boran on Unsplash

The post What could come after blockchain technology? The what and why of Holochain appeared first on P2P Foundation.

Since ‘political economy’ became a subject in the 18th century, the predominant political dichotomy has been framed as labour versus capital. Marx talked about ‘control of the means of production’ as the essential political power that the workers needed to wrest from the capitalists. A great deal of activism and political theory continues in that vein: Gar Alpowitz work What then must we do? is all about rebuilding worker-owned coops and similar institutions. We have 150 years of history testifying to their effectiveness.

The movement has waxed and waned, but never (yet) overcome its antithesis; capitalists have the power to issue almost unlimited credit, and social movements, however popular, seem always to be on the back foot. I am dubious whether worker-owned institutions will ever dominate the economy. On the one hand we see economic justice trying to break out in many forms and places, and on the other dark and powerful forces are suppressing them: laws are being changed to make coops less competitive, and occasionally countries which swim against the neoliberal flow suffer a CIA-led regime change. The Power that controls property also controls the law, the media, the security forces, the military and the banks.

The industrial age needed machinery and factories and hence empowered those with capital and property to invest. That thinking has carried through to the digital era in which a Silicon Valley start-up needs huge amounts of money to engage a raft of skilled people to create (and create a market for) a plethora of unneeded tools, one of which might survive and be sold for a massive profit. Yet there is nothing about the internet that necessitates that capital-centric way of creating wealth. Platform cooperativism is the notion that the digital ‘means of production’, the platform, should be owned by, governed by and should enrich the participating value creators. As an approach and as a tactic, it is a straight extension of rudimentary 19th Century cooperativism into the digital age and cyberspace. In which case we should anticipate it working as it always has on the sidelines but never to impact the wider economy.

Why Protocols?

I believe another strategy shows promise. Let us not focus on property and ownership and control, but on relationships and protocols and collaboration. There are plenty of precedents to work with, but I haven’t seen this thinking applied in the platform cooperativism space.

By protocol I mean a language, convention, or standard. Use of such things cannot be restricted, prevented or monetised any more than use of a word, gesture, or social code. The Internet is essentially a set of protocols such as TCP/UDP, http, HTML, which led to a highly egalitarian participative infrastructure. That need not have been so: in a parallel universe, Microsoft R&D invented the web and now every page is a visual-basic-enhanced word document; MS Office is the only tool for authoring web-pages, and it costs $5000 for a licence and still looks wrong on Firefox!

Fortunately that particular dystopia was avoided because we had those open protocols. I think that is why the early Web inspired a great deal of optimism about the levelling of the socio-economic playing field – recall John Perry Barlow:

We are creating a world that all may enter without privilege or prejudice accorded by race, economic power, military force, or station of birth. We are creating a world where anyone, anywhere may express his or her beliefs, no matter how singular, without fear of being coerced into silence or conformity. Your legal concepts of property, expression, identity, movement, and context do not apply to us… We believe that from ethics, enlightened self-interest, and the commonweal, our governance will emerge. A cyberspace Independence Declaration

The basic internet remains free as designed: we still pay nothing for example for sending an email or retrieving a web page but something has gone wrong. The Internet continued to grow, as with all technologies, as new layers were built; the internal logic of each layer is entirely independent of the others just as the stable atomic model of protons, neutrons and electrons owes nothing to the fuzzy quantum reality on which it is based. Gradually the capitalist interests worked out how to replicate their own logic and structures in cyberspace. On top of the open protocols they built pay walls, monetised services and enclosed spaces. The rules are different at every level. In 2017 it seems normal that platforms large and small, own data and control economic territory for the benefit of private investors. The biggest platforms have the most users and the most money and the most political power and that is why I find it hard to imagine any platform like minds.com competing head-to-head with Facebook, and winning.

Beyond platforms to protocols

I want to expand upon this argument:

A platform cooperative or a platform company model is not one that takes full advantage of the potential to have a truly distributed network. They still have a central platform operator at their core, providing coordination, quality assurance and, most essentially, trust. However, it is possible to go beyond platforms to protocols – to commonly agreed ways of operating. Thus anyone who agrees to the rules can become a part of the network.Mikko Dufva

Ride-sharing is the poster child of the sharing economy, the pressure point chosen by platform cooperatives, and the current fiefdom of Uber. It could be considered a natural monopoly, which is to say it involves infrastructure which need not be duplicated – users don’t want to have multiple identities, apps, user interfaces, price structures etc. PayPal creator Peter Thiel is being lauded by businessmen for arguing that these monopolies are desirable and that competition is for losers. Since he doesn’t address the social question of how monopolies should be owned or governed, we should assume from his investment strategies that he intends to own as many as possible himself.

So Uber’s near monopoly, won as a direct result of having unimaginable access to money, is an invaluable commercial advantage in itself because without serious competition it can squeeze the market for all it is worth. But be careful what you wish for; should Uber fall from grace, the market would probably splinter into many incompatible pieces, which benefits neither the people with cars nor those who need rides.

A platform cooperative ride-sharing service sounds like an attempt to form a cooperative and compete with Uber by recycling profits and remunerating workers better. Its not a very convincing business plan even if the allegations about illegally to sabotaging its enemies are not true because Uber has resources to undercut any competitors until they choke.

But an open protocol for ride-sharing changes the game completely. Anyone could sign up to the network and announce their intention to travel or willingness to chauffeur. A simple algorithm would connect them and at journey’s end they might remunerate each other in cash, Bitcoin, home-brewed cider or anything; the line between giving a friend a favour and earning a crust would be very grey. There would be no middle men collecting rent or dictating how drivers should behave as representatives of the company. The open protocol creates a free market – not in the neoliberal sense of Wall Street being able to flush out the economy of any country it likes with imaginary dollars, but in the sense that suppliers and customers can meet without middlemen, regulators or rentiers. This is less optimal for collecting taxes and running protection rackets, but more optimal for granting everyone access to the economy, and probably much more efficient in terms of using underutilised transport infrastructure.

This article’s title suggests that a protocol could replace a platform as a basis for a cooperative infrastructure. More accurately, it seems to me that an open protocol diminishes the role of the platforms and changes the operating environment by:

• the main benefit to users of a monopoly is built in to the protocol, so there is no benefit to users of having the market dominated by a monopoly.
• suppliers and customers can interact without paying middlemen (which was one of the early promises of the internet)
• users benefit from no longer being captured inside walled gardens
• the question of data ownership is probably handled in the protocol, not in law, and not by a 3rd party, which reduces costs.
• the platform owner is no longer responsible for what happens between suppliers and customers, reducing the need for surveillance and fees.
• the law of the land applies only to the traders behaviours, and thus is much simpler

A changed economy

In short, most of the functions of the platform are no longer necessary and in its absence there is room for new kinds of organisations to fulfil new kinds of function. The new kinds of organisations could compete on the basis of what value they can add to the protocol, or they could just cooperate to make the users lives easier. To stay with the concrete example of ridesharing.

• Companies could develop paid apps which compete on the best user experience
• Drivers of old bangers could organise to ensure constant supply and that they don’t undercut each other.
• Drivers could organise mutual insurance and/or finance.
• A system could be built on top of the protocol to help set up multiple passengers with multiple destinations in the same car, perhaps taking a small cut of the savings.
• A private ambulance service could be imagined, along with haulage companies, a postal service, long distance travel and regular commuter ridesharing.
• if the protocol didn’t handle it, a 3rd party service would be needed to ensure that drivers and/or passengers were identified or had a certain reputation.

Likely such a protocol widely deployed would render our transport ecosystem unrecognisable. It might obviate most full time driver jobs in favour of hitch-hiking 2.0 approach. The free market would level out the full time driving jobs and the unemployment of drivers and costs and revenues, leading presumably to a more equal society (at least until driver-less cars took over!)

The role of blockchains

The blockchains are already making this happen because blockchains are basically protocols which allow open participation. Blockchains can perform some of the critical functions of platforms without being owned by any one institution, namely:

• store data
• execute contracts
• manage payments.

This article about Arcade City makes it clear:

In the end, Arcade City will be a protocol composed of Ethereum smart contracts supporting a global logistics network with an entire ecosystem of apps and businesses running on top of our infrastructure. What SMTP is to email, Arcade City will become for distributed logistics.

For all the bluster about Arcade City being an upcoming platform coop, to me it seems there is no platform in the sense of a thing which can be owned & sold. What then does the brochure site mean when it claims to be owned and operated by its members? It seems to me that the language is wrong.

The human factor

The benefits and challenges of co-owning and operating a legal entity such a cooperative within a legal jurisdiction, are quite different to the benefits and challenges of using, governing and stewarding a universal protocol. Regrettably Arcade City has now forked after a disagreement in the board, which poses serious questions about the claim that its members were in control. Technology alone will not create the society we want; at a more fundamental level, we have to learn to work together.

Professor Jem Bendell and I have explored these ideas further in our new paper Thwarting an Uber Future for Complementary Currencies: Open Protocols for a Credit Commons especially as they relate to payment systems, which we argue is the ultimate Death Star platform.

Photo by Glassholic

Photo by Glassholic

The post From Platform Cooperativism to Protocol Cooperativism? appeared first on P2P Foundation.