A few months ago we published the first part of Matthew Schutte's interview, where we explore the origins and ethos of Holochain. Now we focus on the impacts and relevance it can have in our lives in the years to come.

One of the reasons Bitcoin and other cryptocurrencies are heavily criticised is because of the enormous amount of energy they consume. How does Holochain do things differently?

Great question. To start the comparison, let's remember that one bitcoin transaction takes as much electricity as running an entire house for eleven days in the USA. So on the tech side, the reason that Holochain can be run just on laptops and not be as energy-consuming is for the way we built the system, based on two popular software.

We combined the structure that GitHub uses (the most widely used system for collaborative open source software development) with the back end of BitTorrent (peer-to-peer file sharing).

The architecture behind GitHub is about having an identity as part of the system. It doesn't have to be your real-world identity, is just about having a key that no one else has. You can then take any action, suggest something to me and sign it with your cryptographic key. Then if I like it, I can accept your modification, just like in a google doc.

What we took from BitTorrent is something called a distributed hash table (DHT), which is a way of storing information. It's a great system where if I want to look something up and grab it, I can find it even though you and I did not agree ahead of time about where to put it.

Image courtesy of holochain.org

Where we put the file depends on what the file is. For example, if we take a file and we run it through a hash function, it comes up with a unique hundred digit long name, meaning you can't predict the outcome without actually running the hash function.

So let's imagine we have a group of four people, each with distinctive identity keys. When each of them runs their key through the hash function, they get a fingerprint, their unique address. For the first person, its key starts with a four, the second with a six, the third with a two and the fourth with an eight. Then I create a piece of content, and when we run it through the hash function, it comes up with a seven. What the system does is having the two closest people holding on to the file, in this case, it would be the people with the key starting with six and eight.

Later number six drops off, so you can ask number four to keep a backup. When you create an application, you set how many copies you want. If we're running Twitter, let's say we want 20 copies, to make sure the content is always available even if some people are offline. What that means is that even if you have a hundred million people running the application, what is the load on your device? Your tweets and twenty times what an average people tweets. That is what you would have to hold on to on your device that to make sure this application runs. Moreover, when somebody needs a piece of content, they have at least 20 different parties that could hand it to them. So, it is resilient, it is fast, and it is light enough that you could run 50, 100 our 1000 applications on just your phone, and you could be bridging between those and doing all sorts of different things that aren't possible today, and it's lightweight enough to be peer-to-peer. The blockchain is not.

People got excited about blockchain because they could finally interact without being oppressed by big institutions or governments. However, they failed to recognise they were already creating another big institution that would become the oppressor.

In a blockchain, every participant holds on to everything that anyone else has done. It means that you have to have a giant computer to be able to do that, even if the application is only sending money. The bitcoin blockchain is gigantic; the ethereum blockchain takes up to three weeks to synchronise. This system is not functional, and it just concentrates power. People got excited about blockchain because they could finally interact without being oppressed by big institutions or governments. However, they failed to recognise they were already creating another big institution that would become the oppressor.

The only thing that blockchain has proven useful for is fundraising by tokenisation.

People from the outside have been waiting for the barriers to entry to get eventually lower, but people from the inside are mostly focusing on how to make vast fortunes. Sadly all of those who were initially driven by other values and wanting to save the world, all of a sudden shifted their focus.

Part of the Holo architecture includes a crypto-currency called Holo Fuel, why is it different and how does it fit into your model?

Part of why we decided to introduce Holo Fuel this way is because of the Couchsurfing experience. I have a friend who was one of their first employees that came to work with us. We had many conversations about why Couchsurfing didn't change the world the way Airbnb did. The answer is pretty simple: Couchsurfing required a high level of trust in strangers, Airbnb did not.

Couchsurfing forced you to become somewhat intimate with a stranger. "Oh, you want me to sleep on your couch...? What's wrong with you? Are you trying to sleep with me? Are you just creepy?". There were lots of young people in particular willing to do it, really forward-thinking who liked the ideas behind this model and felt safe to do it.

Airbnb made it a more transactional relation, by bringing money into the system, it made it easier to understand. "Well, of course, she's letting me sleep on her couch, I'm paying her 60 bucks!" That shift made it so that people who wouldn't have thought of sleeping on a stranger's couch or in their guest room, all of a sudden were willing to try that. So once they had that experience, and felt it was great, it opened their minds to whole new business models, a whole different way of seeing the world that had been only visible to the people who had been participating in Couchsurfing, but they wouldn't have crossed that threshold otherwise.

At some level for us, Holo and Holo Fuel is a little bit of that. You download this program and start making some money and all of a sudden you realise there is a different way of doing things. However, until you have that experience, you can't imagine it.

Holo Fuel is fundamentally about empowering users to become internet providers. Should telecom companies get worried?

To understand how holo-technology could disrupt the telecom companies in the future, we have to understand how the system works today.

The problem right now is that if I let people use my extra bandwidth capacity, there is no way for me to get compensated. I'm encouraging a cost, and there is no mechanism by which I'm able to offset that cost, no feedback loop to nourish that sort of investment.

The only actors that can get compensated or benefit from adding additional bandwidth capacity to the network are the organisations that own a customer relationship. We do this when we pay to a given company for x GB of internet a month. These internet service providers become your first hub; they don't own the entire internet, they only own the first stop. What they do is provide the highways for your information to reach its final destination, but nowhere in the middle is anyone able to contribute to improving the highway or benefit from doing so.

However, imagine instead, having a system that allows for people to decide how to run the highways they build. You'll pass me something, and I'll pass it along; if you're a friend you ride for free, if you're a member of a community I'm in you get it cheap, if you're a stranger, you pay full price. Having that kind of architecture could kill the telecom business.

A lot of the folks on the mesh networking world have gotten excited about Holo Fuel because our currency architecture is so efficient that you can make profitable accounts for small transactions. That is extremely important if you want to make possible a pay-back system when sharing bandwidth to someone else.

This model already exists in other industries. It is the equivalent of decentralised off-grid energy systems. In Germany and the Netherlands, you can buy your solar kit, generate energy for yourself, and if you want to, you can also share it with your local community and get compensated for it. This decentralised architecture is what holo fuel is allowing in the hosting space and soon even in the electricity space.

We want to use our architecture to support this decentralised off-grid energy supply, to eventually help connect 1.2 billion people who don't currently have access to electricity nor internet.

So how will Holochain impact our lives in the short term?

Somebody asked me a few weeks ago if a Holochain app is going to take down Uber. No, probably not, but what probably could happen is that in a specific town some local ride-sharing holo app becomes the better option. Because everything runs on open-source, they can share their model with other cities, meaning they'd be able to get some scaling while staying somewhat local. The way in which large corporations have an advantage right now is also a disadvantage. They cannot handle the complexity of the environments that they are trying to penetrate and establish control.

Nevertheless, our idea is not to take down Uber or Airbnb, is to create new patterns and let new offers emerge.

It used to be hard to develop a website, and now it's rather easy, but you still have to pay the hosting. With Holochain it shifts completely, now you can build your site without needing to pay. Anybody who wants to participate offers their capacity with their device. It's just like language. English doesn't live in a book; it lives inside of me and you and the millions of people who speak it.

However, in the short term, we know most humans are not going to be aware of Holochain. It's a developer tool. They might start becoming aware that with this "new thing" they can do other stuff than with the traditional apps.

Then why for someone who doesn't code or develop software would Holochain be interesting? For example, why would my mum care about this? – and my mum is already by usual standards, quite techy–

The way I usually explain this is that 15 years ago, I had a map book in the back seat of my car. It was called the Thomas Guide, and when I needed to find a place, I'd look on the index, find the right page and figure out how to get there. So if you had asked me "Do you have a mapping problem?" I would have said, "No of course not, I have maps!"

Photo by Jamie Dench on Unsplash

Then smartphones came along. They had not just a map, but a map that puts you in the middle and pulled information relevant to you to help you get exactly to your location (turn left in 300m). The radical change was that it put the user in the middle, and it was such a profound difference that it drove smartphone adoption. It was the application that people suddenly could not live without.

So we think of Holochain as doing for the internet, what Google Maps and smartphones did for maps.

Right now, when you use the internet, it's an internet where the application in the middle, where you jump into Facebook, and then you jump out, then you jump into Whatsapp or Instagram, and you jump out. You're not only jumping into these spaces, but you're also being pulled in 40 different directions at once, every day. Everyone I know feels like they have no time because their phones suddenly are trying to pull them into all sorts of different things and distractions. Because every one of those companies has a business model that depends on them addicting you and distracting you with their content, and none of them communicates the way you want them to, so it's not an internet that puts us in the middle.

Why will your mum find this better? Because it is something adapted to her needs, it is an internet where she is in the middle.

Is Holochain better concerning privacy? Yes. Is it better regarding control? Sure. Is it better in terms of security? Of course. However, people aren't going to adopt it for those reasons. They'll like it because once they use it, it makes their lives easier. That's the reason why people adopt new things. It might take a while, but the change will happen once people realise just how better the internet can become.