How is Holochain Different than Blockchain?

Holochain and blockchain are built for fundamentally different use cases. Blockchain is relatively good for systems where it’s absolutely necessary to maintain global consensus. Holochain is much better than blockchain at anything that requires less-than-universal consensus (i.e., most things). It’s faster and more efficient, scalable, adaptable, and extendable.

Long before blockchains, there were hash chains and hash trees. These structures can be used to ensure tamper-proof data integrity as progressive versions or additions to data are made. These kinds of hashes are often used as reference points to ensure data hasn’t been messed with—like making sure you’re getting the program you meant to download, instead of a virus.

Rather than trying to manage global consensus for every change to a huge blockchain ledger, each participant has their own signed hash chain (countersigned for transactions involving others). After data is signed to local chains, it is shared to a DHT, where every node runs the same validation rules. This is similar to how blockchain nodes all run the same validation rules. If someone breaks those rules, the DHT rejects their data—in other words, their chain is forked away from the Holochain.

The initial Bitcoin white paper introduced blockchain as an architecture for decentralized production of a chain of digital currency transactions. This solved two problems—time/sequence of transactions and randomization of who writes to the chain. The main innovation was bundling transactions into blocks. Somebody wins the prize of being able to commit to the chain if they solve a busywork problem faster than the others.

Now, Bitcoin and blockchain have pervaded popular consciousness and many perceive it as a vehicle for all sorts of decentralized applications. However, when the problems are framed differently, there are much more efficient and elegant solutions (like Holochain) that don’t have the drawbacks of blockchains, like processing bottlenecks to achieve global consensus, storage requirements of retaining FULL copies of all the data, and wasting electricity on busywork.