I recently wrote an article about Holochain and Network Effect, if you haven't read it you can check it out from link below.
Holochain & HoloFuel The Network Effect Explained
There’s an old saying, “the more you learn the more you will earn.”
In that article I delve into what is needed and how it can be achieved for Holochain to succeed due to network affect.
I also touched on the reasons blockchain cannot achieve that critical mass of users because there is so many competing blockchains and even though most of them do more or less the same thing (which isn’t much) they continue to just exist for the hell of it.
They don’t actually solve any problems or bring about global change for the better. Rather its an unregulated financial mess that has jurisdictions around the world looking at things from different angles and stand points.
So what’s my point?
The main point I want to share with you in this article is to look at where blockchain is likely to be in 2,5, or even 10 years from now.
Some may say “who cares, you don’t know what’s going to happen”, and they would be correct in saying that. But if you are investing your money into something now wouldn't it be wise or even prudent to ponder what the future will hold?
I’m also going to discuss how I think HoloFuel will be received and the likely relationship of price with the HOT token.
Blockchain is over valued
Lets get that out there straight up, the prices for blockchain cryptocurrencies are totally ridiculous when you consider what you are actually buying and what it then does for you as an owner or “consumer”.
Try and look at it from this mindset, it helps to have a reality check sometimes.
One Litecoin does the same thing when its valued at $5.00 as it does when its valued at $185.00.
One Bitcoin does the same thing at $200.00 as it does at $50,000.00.
One Polkadot, one SOL etc all do the same thing at any price because they don’t have an intrinsic value.
Stock traders use intrinsic value to determine if a stock is over or under priced, with the main goal being to gain value while investing is to seek out stocks that are trading for less than their intrinsic value.
But how can you put an intrinsic value on something that doesn’t have a revenue, doesn’t have turnover, doesn’t have any assets backing it?
Blockchain only achieves its value or discovers its price by what the market does, and this market is heavily manipulated.
Its a perfect place to launder money, steal from those whom are new to cryptocurrency, hack smart contracts, phishing scams, you name it, blockchain has it.
Blockchain is an unregulated industry that has no product itself other than the coins or tokens its selling, the people who make money regardless of the price is the miners, the stakers and the exchanges.
If you own blockchain coins or tokens picture a triangle with your head in the middle of it.
At the top is the exchanges, bottom left is the miners, bottom right is the stakers, you and your money are in the middle with a big (sucker) lightbulb above your head showing because you are paying every corner of the triangle for the privilege of owning something that has no intrinsic value, is highly volatile and charges you every time you want to do something.
That’s the system, blockchain just takes and takes, sure people make money with the buy low — sell high mantra and of course it works for some but the majority lose out.
In a way blockchain also resembles coronavirus, each government has its own way of dealing with it, no one can control it, people suffer, others deny its impact but mostly anything associated with it is negative, just like blockchain.
The other similarity is education, people push their view on coronavirus just as hard as they push their views on any particular blockchain coin or token and then you have some media saying one thing about coronavirus pushing a theme or agenda and other media saying the complete opposite, sound familiar?
Its an eternal point of view argument that takes place daily on Twitter and other social media for both blockchain and Covid19.
Where will blockchain be in 12 months or 5 years?
To me that’s an easy question to answer logically, but logic and blockchain don’t co-exist very well.
The real world media now follows blockchain and uses a lot of it as “filler” news now rather than actually featuring it.
On the other hand the cryptocurrency media are one big propaganda machine. In particular Cointelegraph you can tell it is owned by a conglomerate of Miners because no matter how red the charts are dripping with blood they will push the propaganda out 24/7.
Coindesk are not quite as bad as they used to be, they are owned by the digital currency group and tend to promote (of course without any obvious disclaimers) the coins and tokens where the DCG has an interest.
Forbes Crypto and Bloomberg are all in the same boat, they do paid for (backroom handshakes and transactions) advertising dressed up as a story.
Why I’m saying this is for those that are unaware the entire industry is manipulated and packed up with a ribbon on it so they can sell sell sell.
Because no blockchain cryptocurrency is actually tangible or asset backed the product is the coin/token itself and whatever shit they have plugged into it to make it seem useful.
Smart Contracts, NFT’s, Defi are all just selling points all of the blockchains use to convince you this is the future.
I think it couldn’t be further from the truth.
One day more people will wake up and see blockchain for what it is, they'll learn the hard way that paying gas fees, transaction fees, staking costs, dealing with 20 to 50 percent ups and downs is not “normal” at all, its a faux world of finance where the only product is the idiot that buys it and contributes to it.
And yes I just called people invested in blockchain idiots, I was once one of those idiots myself until I decided to take a step back and look at the entire industry as a whole.
Until people take their own step backwards or take the time to try and understand what it is they are putting their money into then they remain the perfect client for the suckers triangle.
To answer the question of the heading where will blockchain bein 12 months or 5 years, it is entirely dependent on how long they can keep the suckers in the loop.
They say there is one born every minute so with that as a guide, could be a while. But seriously I think sooner rather than later people will realize that the whole scarcity thing is bullshit and used to sell coins and tokens.
They’ll also eventually understand that there is no need for miners or stakers to ensure stringent transaction security, that is a very old technology.
I think the longer Bitcoin sits near 50 thousand USD at the time of writing this article the higher the chances are its going to mega dump.
The miners and exchanges do most of the dumping then their propaganda outlets, the cryptocurrency media and influencer propaganda immediately switches into “Buy the dip”, or “Gas fees are the lowest since…” all of the usual bullshit they put out every time, just after they have financially raped 1/3 of all cryptocurrency holders.
It just cannot keep going the way it is now, I think eventually even though its a jurisdictional challenge eventually bigger countries will legislate much of it into oblivion with the assistance of banks requiring them to only accept funds from exchanges that comply with a particular countries legislation.
That’s another reason privacy coins will die first, they are the biggest to launder money then people jump onto unregulated exchanges or use mixing sites to swap anonymously to eventually cash out.
Its a partially criminal operation operating with impunity for the most part but again I think technology and legislation will put it in its place.
Remember its not illegal to lie on Twitter, telling a lie is not illegal. Telling lies for financial gain is illegal but also hard to prove, especially when it comes down to interpretation.
One of the biggest lies I constantly highlight are the blockchains that claim to be cloud hosting or cloud/data center alternatives but in a decentralized way.
These guys lie and lie every single day, they do it because they can and nobody can stop them. Even their supporters if you provide proof of using commercial data centers they are still either dumb enough or over committed to even acknowledge that they are being lied to.
Its a dirty industry that sleeps on a bed of lies every night because the uneducated or mislead people give them money for doing so. Until the general public calls out their lies they will keep spreading them, and those who have money in them promote the lie because that same lie is the only thing that can see them gain financially, so even if they know its all bullshit, they’ve got skin in the game too hence nobility is rarely seen in blockchain.
To finish this piece about blockchain before I talk about Holochain I will share what I think will happen with prices of the cryptocurrency market as a whole.
I think the current prices of all coins/tokens in the top 100 are ridiculously over priced.
Remember what I said at the beginning, once LTC does the same thing at $5.00 as it does at $500, the same applies to all of them because none of them are asset backed.
I can honestly see Bitcoin going below even $5000.00 within the next couple of years because eventually the world is going to wake up to the big scam that cryptocurrency is in its current form.
It doesn't solve problems it creates them, it doesn’t pay its holders it punishes them financially for transacting.
The miners dump when the difficulty is high because usually the price is too, then when the price drops they continue to mint coins at a lower difficulty and wait until the price goes up with difficulty again then dump on the same suckers.
This as everyone knows has a follow-on affect to all other coins and tokens.
It is a manipulated and corrupt industry, its not full of criminals and of course there are some bright well meaning well intentioned people within blockchain but its underbelly is rotten to the core.
I will finish my rant about Blockchain with a quick summary of some of the top 20 coins/tokens and give a brief explainer of what I see it as being in the future.
Bitcoin ~ The big daddy, not going anywhere and will remain the king but is extremely over valued and the number one user of “scarcity” as its selling point. (FYI there isn’t any scarcity, a Bitcoin broken down into Satoshis means there is enough of them for every single human on earth to own 200 thousand of them. Scarcity my ass..
Ethereum ~ Also highly over valued, switching to proof of stake and always trying to make itself able to do things it was never designed to do, like scale. Its just another old and slow technology that brought ERC20 tokens to the masses.
Cardano ~ Going to do an entire article and review comparison on this soon.
PolkaDot ~ Another Digital Currency Group shitcoin, highly over valued.
Ripple XRP ~ This one is probably the most over valued of them all, XRP does nothing for its holders, provides no revenue and Ripple the company spends money at will as they’ve convinced thousands of people of its immanent adoption (hasn’t happened in 8 years, never will). The same as attaching a blockchain to a cloud doesn’t make either of them any better it just means more transactions, XRP is the same with cross-border payments, you don’t need a coin or token for this, its a product created for a market that has never existed.
Solana ~ Won’t go into this too much, they just had a major fuck up and had to reset it. Its like Iota it has a pause/reset button.
Uniswap ~ AWS dependent myth that has fooled thousands into thinking it is a DEX or decentralized exchange, it runs entirely on AWS. You can’t get much more centralized than AWS. But as I said, in blockchain it isn’t illegal to lie or mislead or incorrectly label your product, just do what ever needs to be done to make sure the idiot in the triangle pays everyone.
BitcoinCash ~ Shitcoin fork that does what 90 percent of other coins do, send from one address to another and pay the miners. Another waste of space and free dollars for the miners.
Internet Computer Dfinity~ LOL first I have to stop laughing, even when I type the words Internet Computer I think of that turtle neck wearing wannabe who thinks he is Steve Jobs. He has even recently labelled the ICP “The World Computer”, its just another shitcoin using centralized commercial data hosting services but in Dfinity speak they are called “Independent Data Centers” which is another way of lying your ass off saying we use commercial cloud and data centers but our data providers use our network nervous system, this somehow obviates the truth about where the data is hosted. These guys out-do any other blockchain for lies, by a country mile.
Final words about blockchain
You’ve probably come to a reasonable assumption that I am both jaded and offended by the existence of blockchain.
Let me make it clear, although it is a seedy industry that is highly volatile and manipulated that doesn’t mean everyone who owns coins or tokens or works with or for blockchain is a bad person, that’s simply not true.
There are plenty of great people within blockchain but as an entire industry its filthy.
And with regards to blockchains that attach themselves to commercial data centers and cloud services for their nodes, for their stakers etc, there is nothing wrong with that, nothing at all.
Unless you lie about it, that’s when things change. If I am the CEO of a blockchain company offering to run applications using my blockchain and my nodes are commercial and centralized why not just say so, there’s no harm in that because that is the only viable option at the moment?
Because then they are no longer selling the myth, they are selling the truth and guess what?
Bullshit sells way better than the truth does.
I’ll leave it at that. :-)
Lets talk about Holochain
Given my obvious thoughts on the seediness of blockchain and what I mentioned above you are probably expecting me to go into a holier than thou spiel about how noble and honest Holochain is and how it has zero faults or challenges ahead of it, you would be wrong to expect that.
Firstly Ill mention the good then the bad then the unknown.
What I think Holochain has that many blockchains don’t is a whole lot of ethics, their leadership team are intelligent people who have been working on this long before Bitcoin first arrived on the scene.
Eric and Art the two founders of Holochain are personable, honest and friendly people, as is the rest of the team that I have interacted with briefly including Mary and David.
You couldn’t ask for a more reputable and respected leadership group.
I'm not going to re-write things I and others have written a million times about what Holochain can do in comparison with Blockchain, that’s been done to death, although its an on-going thing because there’s two things in the way of Holochain.
One is that it is quite complex, which is both an advantage and disadvantage because explaining its potential and areas it can be used and where it can and will disrupt current technology also touches on the realm of blockchain because cryptocurrencies can be created using Holochain along with its intended function as an application framework and hosting company.
To give you a brief comparison when it comes to scale please check out the article below by Art Brock.
Limits to Blockchain Scalability vs. Holochain
Vitalik responded to Elon Musk tweeting about dogecoin with a post about limits to scaling blockchain. Can Holochain…
If you want to learn more please visit Holochain or Holo websites or check out some of my other articles.
In this article in particular though I want to focus on HOT and HoloFuel and the swap and what I think it will mean for Holo hosting and Holochain itself, independent of what the cryptocurrency markets are doing at the time, although it would still be relevant.
HOT is the ticker for the Holo token which is currently an ERC20 token that can be swapped 1:1 (one for one if you have ratio issues) for a certain amount of time, the last I read was that it will be a guaranteed timeframe of approximately 6 months.
If I own 50 HOT tokens I will be able to swap them for 50 units of HoloFuel until the swap period ends.
The only place to swap HOT tokens is at one of the Holo hosting Reserve Accounts.
After the designated swap period (this is yet to be announced at the time of writing) then there is a little bit of uncertainty as to what will happen with HOT.
Although everything is subject to change because it hasn’t happened yet my understanding is that HOT will remain unpegged to HoloFuel as an entry point in and out of cryptocurrencies.
HoloFuel is the asset backed (through hosting) currency to pay for hosting services from Holo.
Customers of Holo (Think about that what I just said)
“Customers”/”Clients”/”Paying public” wow, in blockchain world WTF is a customer? (I’m being facetious here because blockchain doesn’t have customers, it has holders or owners) it doesn’t know what a revenue is because the end product is the coin or token itself the person buying the coins/tokens (the clown in the triangle) that’s the customer.
Anyway back where I was, Holo customers will be able to purchase hosting through the Holo Reserve accounts (translation: directly from Holo the company) and they will be able to do so using USD/EUR/GBP/ and probably a few other of the major currency pairs.
Having a clientele that isn’t a “crypto-er” is going to be unique to Holochain initially and its also a very good idea to allow businesses to pay commercially and have receipts from a registered company for their hosting requirements.
So as you can see HoloFuel will bring non-crypto people into the same hemisphere but without forcing them to create exchange accounts and go through other detailed processes, that will all be part of the Holo hosting on-boarding.
Prices vs supply vs swap vs uptake of Holo hosting
This is where it gets interesting and also takes us to areas of unknown details and voids that only speculation can fill at this juncture.
So that’s what I'm going to do, speculate, care to join me? Read on, but a warning you may not like it.
Forgetting about post swap, lets assume the swap is happening next week, should I swap my HOT tokens for HoloFuel?
That question is going to be on every HOT holders mind or currently is on their mind and is on standby in the background.
Its been on my mind for a while too.
There’s some important factors to take into account when you start delving into the to swap or not to swap question. These factors include but are not limited to the following IMO:
The current cryptocurrency market and sentiment.
Regulation or legislative requirements.
The total number of previously swapped or currently swapped HOT.
How the 1 Billion HoloFuel sold at ICO will affect market (US$1.00 per 8,145 units of HoloFuel).
The demand for hosting vs the number of live hosts.
Whether or not the disk image or Holo OS is available to the general public to on-board more hosts.
Any non cryptocurrency media coverage Holo may receive.
Swapped HOT can only be redeemed again through Holo Reserve if the HoloFuel was used for hosting (can be sold direct to market if not).
As you can see there are still many unknowns and that’s also one of the reasons there have been some delays with Holo.
There was about a year and a half delay when the team decided to switch from GO language to RUST. This put the team under immense pressure and in hindsight they handled it very well.
They had all kinds of things being thrown at them at one stage yet they brushed it all off and got many things done that surprised a lot of people.
The patent along with the proof of concept this year has done amazing things for the Holo brand.
And things are progressing but slowly, which is both ideal and not ideal. Its ideal because they are slowly scaling out and troubleshooting any issues as they arise and putting in permanent fixes. Its also not ideal because we are spoilt brats living on the internet in an age where a drone can bring me a pizza and we want everything yesterday.
So what are people going to do, swap or wait or a little bit of both?
What I think will happen and this is my personal opinion, do not take it as financial advise or assume it is accurate in any way, I am just thinking out loud here.
I think initially there will be many long term holders who believe in what Holo is doing and will swap instantly and just let their HoloFuel sit in their accounts, regardless of the demand for HoloFuel at the time.
Then you will see some sitting on the fence who swap a little but also retain some HOT because they are blockchain trained into scarcity, (swapped HOT is no longer in circulation that means lower supply) but again that isn’t what IMO gives HOT or HoloFuel any value, the value is the compute asset HoloFuel is.
Some will look at it like AWS Coupons or AWS dollars, because that’s basically what HoloFuel is, its a currency to pay for hosting, only this hosting just happens to be part of a word first patented invention that involves only Peer-to-Peer hosting without using data centers or regular cloud.
So if you look at it from the previous paragraph's point of view, you simply cannot lose, but that is with the assumption that the demand increases over time, which I think it will.
Initially though I think there is going to be some high volatility and although there are already some awesome projects building on Holochain and more than likely a few out there that we are not even aware of I think there will be an over-supply of HOT/HF and the price will drop considerably.
In the last few months I've tweeted that I think HOT is undervalued, but to be honest I think it is over valued right now the more I think about the number of known projects building on Holochain.
I just called out blockchain for lies so I won’t sit here and be a hypocrite and suggest that I think HOT is undervalued because that’s not how I roll. There’s going to be not enough projects running on HoloFuel to justify the current price in my opinion.
I hope I am wrong but my gut tells me that its going to take a year or two after release of HoloFuel for it to really reach its maturity. With that said all it would take would be one major brand or even semi-major brand to switch to Holochain and use Holo Hosting then boom, the entire world will know about it and it could see demand spike very quickly.
The technology itself is so unique and versatile I would actually be surprised if that doesn’t happen in the first year, but I just think that at the beginning, if we are following this current trajectory and say Holo hosting is live by November this year, unless there are some big changes or its given the media coverage it deserves initially there will be an over supply and lack of demand.
To me Holochain is the most interesting invention I've watched be created and built and spoken of so often. As I said at the beginning the team is amazing and the technology and brilliance of Holochain will change cloud computing and hosting forever.
Holo doesn’t have any competition, it’s patented, its user centric, and its able to disrupt and improve several billion dollar industries.
If you own 1 Million HOT or HoloFuel one day you will be a millionaire or very close to it.
Just don’t be surprised or shocked if the price drops considerably prior to, or during the swap, factor that in, then over time as word spreads and we start seeing digital currencies with zero fees, people creating dating applications where the users owns their data, Twitter, Facebook, all of the socials cloned but in a P2P way that gives you control of your data, your going to be on a big winner winner chicken dinner.
These are just my personal points of view, not financial advise and again if you’ve made it this far, thanks for taking the time to read the article, I wish you all the best in life. :-)