I have inadvertently started a collection of hag stones. Not intentionally, I just find them rather intriguing and can’t help picking them up…
There seems to be a long history of humans fascinated by natural holes. Large stones with holes in them, such as the Tolmen Stone on Dartmoor, have been used for people to pass through in initiations for thousands of years. If it is difficult to access, or dangerous to egress, so much the better. Caves have formed a similar purpose, particularly when it is possible to emerge somewhere other than where you entered.
Initiation by a stone works because it changes the consciousness of the person passing through. In shamanic journeying, it is usually necessary to find a natural hole to pass into different worlds; a hole you can physically pass through means you also take your body with you. A hag stone is a tolmen on a small scale, as only your consciousness may pass through. For this reason they can be a useful aid when you want to look at something in a different way, and I have used them for middle earth travel. This may be why they gained the reputation of being a way to see fairies.
Holes have also been thought to cure disease, or infertility. Where a holey stone of the right size cannot be found, then for cures trees were often used; these have the added benefit that the hole can be sealed up again by binding the tree back together and the time of spell is lengthened to include the regrowth of the tree.
The hole can be used as a doorway or portal even without passing through it, in order to draw or repel energy. For example, they can bring luck, or wealth, or protection, and banish misfortune, poverty or psychic attacks. Common places to find them in use are attached to fishing lines or nets, to keys, or as an amulet. They have also been used for divination, looking at the moon through the hole.
Here is my collection, found on various beaches around the British Isles. Most of the holes have probably been made by bi-valve molluscs to live in, when the stones were still attached to bedrock.