Holochain Forum

Why Holofuel instead of $ or EUR?

I have read here in the forum that app developers need to pay Holofuel to host their apps on the network.

Can somebody please explain, why Holofuel was introduced for this purpose? Why not using $ or EUR - just because it’s cool nowadays to use crypto?

I see a lot of irritation here about the relation of HOT and Holofuel and how these currencies will be used. This could have been avoided by making a clear statement on the homepage, what services the project offers and what’s the price in $ for it.

EDIT: I don’t like the fact that I need to pay for hosting. There are tons of offers to host JavaScript apps for free and I can place my apps in app stores without paying a per app fee. We already fund the project by buying HoloPorts and there are many other ways for you to fund this start-up project. If somebody needs to pay to evaluate Holo technology, it will definitely be a barrier for project success.


Yup, a bunch of people sat around and said “Hey crypto’s cool, let’s create our own one!”.

As an avid observer of Holochain, Holo, and the encompassing metacurrency project, as far as I understand it, Holofuel is required as it is a payment in return for hosting services on the Holo network. The Holo network is a known network of specific hardware and presumably curated content.

This strategy was decided upon in order to fund the development of Holochain, which does not need the Holo hosting network in order to run programs on your own network, and you could set up your own Holochain hosting and compete against Holo if you wish, I believe everything is on Github.

If anything, the confusion is caused by the misunderstanding that Holo and Holochain are anything like the current ‘crypto’ scene - this is also a very cunning move as we do need to reinvent how technology is used in this world otherwise we do end up in the world you describe, where people sit around and create something just because it’s ‘cool’, which is OK but most the people I’ve seen who hang around here are quite deep thinkers and doers, and that’s my kinda folk I like hanging around with hence why I’m still here :wink:

There was an excellent interview posted on YouTube the other day which goes into the bigger picture, I’m sure a chill out and a watch of it will help clear up the intentions a little further for you:

Two articles I like to share are:

Here’s Holochain in 100, 200, and 500 words

Unenclosable Carriers and the Future of Communication


Hosts store your source chain. Storage costs money. Ethereum Swarm, for instance, charges money to provide storage too… As for app stores, roughly speaking, app stores are unprofitable business branches of way too profitable companies; an excellent business strategy financially speaking.

The answer given in the Holofuel Economics 101 article is that handling micropayments for a distributed hosting infrastructure requires a highly efficient cryptocurrency:

From a technological perspective, we need to be able to handle extremely high levels of micro-transactions, on the order of millions of transactions per day, since that is the nature of of how distributed hosting will be provisioned. This requires cryptocurrency-like technologies, since existing payment networks are not able to handle micro-transactions economically.

From an economic perspective, we need price signals that are both stable AND accurately reflect underlying activity, so that users and hosts can make long term plans with confidence. We assert that this requires a currency that is backed by the hosting capacity of the network.

I would then further assert that making it hosting backed requires agent-centricity, and therefore a cryptocurrency built on Holochain, that is: HoloFuel

Couldn’t you self-host a Holochain application during development and avoid paying for Holo hosting until you need to go live on the web? Forgive me if I’m misunderstanding – I’m not a dev so I might not get how this is a barrier.

Thanks for your answer… I now see that there are tons of possibilities to freely publish lets say a JavaScript app but if it needs to store its data somewhere (here the dht) then I would also have to pay for it… at least if it is much data. Does the hashtable for a Holo app need much space?

Again, to clarify a few things:

  • A Holochain (h)app runs on end-user’s devices.
  • The space it uses grows as your activity grows. The underlying database is, as far as my understanding goes, just a simple relational database (LMDB); the hash table is a Holochain-level concept. The entries are still kept in some databases. Again, I’m not sure about the under-the-hoods.
  • Mobile phones don’t have the capability to run a Holochain app effectively; your phone would get hot as hell were you to run a Holochain node for an app you use.
  • So you (the developer organization of the (h)app) sort-of book some hosts on the Holo network; those hosts would run the nodes of your (h)app’s users.
  • The ‘thing’ that the end users use is then just a User Interface that establishes a connection with the remote host. The UI stores nothing.
  • The end users don’t necessarily have to pay anything if you (the dev) can fund the hosts out of the investor’s pocket.

It’s very minuscule. That’s what differs Holochain from Blockchain: that you don’t end up storing the whole world’s data! Still everything works! Kinda like consensus without global consensus: distributed consensus. Neither do you “mine” /slash/ run complex hashing algorithms to keep the system secure. Hopefully someday even mobile phones would be able to run Holochain.

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my point why it is a barrier is that it supports the project, if EVERYTHING that the project provides (also the hosting) is free to test and evaluate

if I have to pay for something without knowing what I will get, then I would not use it… I first want to be sure that the hosting can swallow all my data, is fast enough and easy to use

I still do not understand why I cannot pay for this hosting with $ or EUR.

I do pay Amazon and Microsoft for their hosting services in $ and EUR and I do not need to continuously recalculate Holofuel into $ to know what the value on the invoice means or would you make this clear on the Holo hosting invoice so that I can immediately understand it?

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With respect, you’re trying to compare centralised hosting with decentralised hosting.

You’re comparing current services with something that isn’t even up and running in a commercial sense yet.

There’s plenty of info on what Holofuel is and why it exists, if things were as easy as you say they should be then we would all be doing it now, but they aren’t hence why it’s different.

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Ah I see, you were hoping that not just building and testing Holochain would be free, but also Holo hosting… at least to test. Honest question, is this really a reasonable expectation? Can you get hosting for free anywhere else? I mean hosts on Holo are offering their computational resources and spending electricity to provide hosting resources, so it seems a bit unreasonable to expect them to do this for free, unless they have good reason to do so. By the way, it IS possible for them to CHOOSE to offer hosting for free, so if you can convince Holo hosts that your project is valuable and deserves support, then perhaps you could get free hosting. Maybe there could be an option for hosts to support the developing ecosystem by offering free hosting just for testing purposes for projects in development. I might consider offering that if I were a host, actually, especially if I liked the project.


I dont want to compare… it is a simpke question. you say that you have something that must be paid for and there is almost nothing that we cannot pay with $ or EUR, right? I want to understand why this solution was not possible with Holo services

Same reason, you’re now just trying to compare a centralised currency with a decentralised one.

A $ or Euro is what you buy HoloFuel with. The HoloFuel thus bought are paid to for the hosting service. [In fact, as far as I know, one of these currencies will potentially be the reserve currency of HoloFuel. Anyway, that’s something that’ll confuse you further. Just ignore this section in square brackets.]

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It’s very similar to the concept behind buying credits on stock photo websites. See https://www.stockphotosecrets.com/questions-answers/what-are-credits.html

You can buy “credits” for hosting with your dollars/euros, because it’s not really practical to run a distributed web hosting infrastructure directly with dollars/euros, because that requires millions of microtransactions.

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thanks a lot! such credits are a very helpful association to understand the difference in comparison with using dollar or eur directly…

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your answer is not very helpful for me and others to understand the ideas behind holofuel

thanks! a lot for your understanding… helped me to get the point!

Thanks! This makes it clear for me as to why a HoloFuel is used as a intermediate currency between the host and the hosted. Hosted pays in macro but the host receives in micro and this second part is much easier to handle through transfer of tokens. The host is likely to accumulate these tokens and convert them back to dollars if they want to buy groceries and stuff but would keep them in tokens if they themselves have a hosting need.

(I think)

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Also, assuming that fractions of HoloFuel will not be transferred but rather integer number of them are, the final settling dollar value of a single HoloFuel would be relatively small. I am not sure what that small is (could be 50 cents or could be 50 dollars, if the host is paid per hour, then I can imagine it being that high but may be the host is paid by a token at hour basis but in bulks of large number of hours at a time and then the HoloFuel can cost more. Would like to know if I am missing something). But if half a HoloFuel etc can be paid then it is unclear what value it needs to take. All of these would ultimately depend on how many people adopt this.

As for the app monetization (developer would need to be paid for making an app) is concerned, it could still potentially use advertising right? I mean it is upto the one who makes the app. Am I right in saying that just for the sake of example, Facebook could launch an app that is based on Holochain protocol distributed hosting and still show adverts and all of that right? The ML algorithms that run tailors ads may have problem running in the absence of a central server with all the data but it is still conceivable. Am I right about this?