Holochain Consistency vs. Global Consensus

Global consensus cryptocurrency systems are sometimes AP; they give up Consistency to maintain Availability, in the face of a network Partition. Bitcoin will carry on processing transactions and mining new Bitcoins inside each partition of the network. When the partition ends, all but the longest chain will simply disappear. It will maintain "Availability" to all participants, inside every separate "Partitioned" network, through the duration of the network event.

This is, obviously, false Availability. Bitcoin will process transactions and mine new Bitcoins inside each Partition of the network – but when the Partition ends, all but the longest chain simply … disappears! All ledger balances adjusted in all the Partitions of the network containing "shorter" chains vanish.

For those in the “disappeared” fork, was the system really available? No, it was not – all of their transactions ceased to exist. The remaining Bitcoin blockchain is “Consistent”, all right – consistently absent of all of their transactions.

That something; just not … money.

From the perspective of the spenders and recipients of Bitcoin transactions within the affected network Partitions; it would be as if they received "counterfeit" Bitcoin. It seemed to be "recognizable" as Bitcoin (at the time of the transaction). It seemed to be "transportable" at the time, but clearly was not.

So, Bitcoin has great utility and high network-effect due to its great age and wide-spread recognizability. But at best it should be considered an "asset", not "money".

Hashgraph (hBar, Carbon, and perhaps some other cryptocurrencies) will stop, in whatever part(s) of the network cease to have a majority quorum of signatory nodes, and then resume when the partition re-joins the larger network.

So that’s at least better; we can’t “seem like” we’re doing an hBar cryptocurrency deal, and then find out later that it just blinked out of existence.

At least it works at tens of thousands of transactions per second, with absolute settlement in seconds, when it works! But, what do I do about food when I happen to be disconnected from the ‘net for a couple of weeks?

Better; still just not quite … money.

Availability is simply not an optional feature for "money". It means real-world inconvenience at best, starvation at worst.

Holo’s Holochain based systems maintain Consistency, giving partial Availability in the face of a Partition. The HoloFuel cryptocurrency used by Holo for hosting payments, etc., is an example of what is possible, beyond the restrictions of global consensus systems.

You can transact a deal with any other party that you can communicate with (of course, you can’t deal with other agents you can’t communicate with, which sort of makes sense).

Furthermore, the deal is validated by as many nodes are available within your partition. Of course, don’t do a billion-dollar deal if you’re in a mobster’s network and can only see a few of his nodes. But, even if you do – as soon as you rejoin the larger network, any attempt at fraud will be immediately discovered. Unlike statistical consensus, which agrees with a majority (the 51% attack) – it only takes a single non-fraudulent node to detect and report fraud, and then any and all other nodes can confirm it, and black-list the complicit parties.

Worst case – if you decide to accept the high-risk transaction – you’ll have to Decline the (unfortunately fake) funds you were paid, to restore your account to non-fraudulent status. But, for most typically use cases, the cost of building the fantastically complex and elaborate “charade” required to perpetrate a single fraudulent transaction won’t be worth it. Especially since the ill-gotten funds will immediately become worthless – nobody will deal with the account – as soon as the fraud is detected by a single other node!

In Holofuel, it is trivial to avoid even the possibility of this happening; simply include one other trustworthy Holofuel Agent in the transaction, whom you know is outside the hostile network you are within; your partner's Holofuel account, for example. These can be zero-value participants, who only need to sign the transaction, but don't contribute or receive any part of the ledger balance transfer.

These risks and mitigations are somewhat analogous to cash:

• Don’t take suitcases of “totally legit!” USD$100 bills from a North Korean stranger in exchange for your yacht.
• Don’t trust a certified cheque from “Bubba’s Bank and Trust and Taco Shack”, or from the “Royale Bank of Scottland” branch in the City of Culiacán, Sinaloa, Mexico.

That’s more like money!