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The holographic principle is a tenet of string theories and a supposed property of quantum gravity that states that the description of a volume of space can be thought of as encoded on a lower-dimensional boundary to the region—such as a light-like boundary like a gravitational horizon.
First proposed by Gerard 't Hooft, it was given a precise string-theory interpretation by Leonard Susskind, who combined his ideas with previous ones of 't Hooft and Charles Thorn. As pointed out by Raphael Bousso, Thorn observed in 1978 that string theory admits a lower-dimensional description in which gravity emerges from it in what would now be called a holographic way. The prime example of holography is the AdS/CFT correspondence.
The holographic principle was inspired by black hole thermodynamics, which conjectures that the maximal entropy in any region scales with the radius squared, and not cubed as might be expected. In the case of a black hole, the insight was that the informational content of all the objects that have fallen into the hole might be entirely contained in surface fluctuations of the event horizon.
The holographic principle resolves the black hole information paradox within the framework of string theory. However, there exist classical solutions to the Einstein equations that allow values of the entropy larger than those allowed by an area law, hence in principle larger than those of a black hole. These are the so-called "Wheeler's bags of gold".
The existence of such solutions conflicts with the holographic interpretation, and their effects in a quantum theory of gravity including the holographic principle are not fully understood yet.