Abstract. The theoretical storage capacity of data in the form of volume holograms is estimated to be of the order of a terabit per centimeter cube. However, the practical limit of the capacity is set by the system parameters. A model is shown that uses system parameters such as bit error rate, data access time, number of holograms, and noise to yield practical estimates of the capacity. The model calculates the impact of different system parameters on the capacity and shows the bottlenecks for this technology.