Holo (CCC:HOT-USD) tokens have been hot this year, despite coming off their highs recently. The crypto ended last year at 0.06403 cents, according to Coinmarketcap.com. As of Sunday, May 16, it was at 1.21 cents per HOT token. That means its price is now 18.9 times its price at the end of 2020, a gain of 1,789% year to date.
It is now 57.5% off of its highs of 2.848 cents on April 4, but I suspect that Holo could regain this peak over the next several months.
At today’s price Holo still has a market capitalization of $1.9 billion. This ranks it as No. 66 in the Coinmarketcap universe of cryptocurrencies. This is over 100 times its initial coin offering at 0.015 cents in 2018 when Holo.org raised $20.65 million.
So, Holo is not a fly-by-night crypto. But what is driving its growth?
Holo is an Ethereum token that acts as a distributed peer-to-peer hosting platform for Holochain apps (hApps). These apps can be downloaded on personal computers to earn HOT tokens.
Holo wants to disrupt the crypto space. It distributes the blockchain on a peer-to-peer basis, instead of everyone having the same blockchain or ledger. Holo says this avoids the “fundamental scalability problem” with existing blockchain platforms. By parceling blockchain ledgers out to many different people it can avoid congestion in both blockchain processing and storage.
For example, each “agent” or “node,” such as an individual user of Holo, can maintain their own blockchain. But key parts of a distributed blockchain require consensus to validate the blockchain. This is how the peer-to-peer networking cloud hosting concept works for Holo.
As Coingecko points out, every device on a network can function independently. It only requires the synchronization of data when necessary, or agreed upon by users.
But this also highlights its biggest weakness. Each member in the network must independently verify the whole blockchain. So, although Holo offers scalability for data and transactions, it does not have speed. But on the other hand, each member does not have to store the entire blockchain. Holo is not a mining crypto and rewards users with HOT tokens through a proof-of-stake system.
What to Do With Holo Crypto
Holo recently applied for and received a patent on its innovation of using a distributed blockchain platform. The company said it protects its technology from trolls who might otherwise have tried to hold up applications. It also protects users who want to set up hApps for different commercial uses. I think this helps the HOT token to also gain widespread acceptance.
One problem the holochain platform has right now is that it does not have a list of popular hApps that solve a practical or common problem for users. This would make the cryptocurrency more popular if that was the case.
One recent example was a social media app named Junto that decided to use Holo because of its distributed scalability features. Junto is still in beta testing and plans to launch in summer 2021. If this takes off, it could be a real practical advertisement for the use of Holo in developing decentralized apps.
Over time the development of these kinds of apps will lead to a higher demand for HOT tokens and also the HOLO price. Moreover, Holo’s popularity is starting to grow. For example, anyone can host a node or keep a blockchain app on their computer if they have spare capacity. Holo hosts are rewarded in HoloFuel credits or HOT tokens as a result.
Bottom line: As this reward system becomes more well known, expect to see HOLO crypto rise to its former heights. If that happens, Holo could rise at least 100% from here.
On the date of publication, Mark R. Hake did not hold a position in any security mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.