First-class analytics can only occur with quality data. As the old saying goes, ‘garbage in and garbage out’, and it still holds correct – incorrect data is of very little usage. Data quality is therefore vital to ensure accuracy and reliability. Some analytics systems allow you to query your data without validating it, however, we only analyze validated data.
This if put of blockchain could do wonders and this is what Factom does. Factom is a distributed record-keeping system used to store huge amounts of records on the blockchain, functioning as a verification and validation layer. The fundamental concept of Factom is to separate the Data Layer (notarizations) from the Value Layer (such as the Bitcoin protocol that facilitates value transfer) thereby allowing anyone to securely notarize documents in a separate system. The Factom Blockchain is an open source project. It was built to protect data and systems. Often it is described as a publishing and auditing engine. It allows users to write data to its ledger for a small fee. Once information has entered into the Factom Blockchain it can’t be removed.
Why was Factom built?
The Bitcoin Blockchain has several core issues. Factom was built in order meet these needs. Entering data into the Bitcoin blockchain is excessively expensive at the size. Additionally, the Bitcoin blockchain cannot handle high transactional sizes. The Factom Blockchain is orders of huge less expensive and has orders of magnitude more capacity for transaction volume.
Factom also has built-in layers of redundant security that other blockchains do not offer. The Factom Blockchain anchors itself into the Bitcoin blockchain (and others) to take advantage of the security of Bitcoin’s hash rate. The layering effect of security ensures the immutability of its blocks.
Another feature that the Factom blockchain offers is a theme tracking capability that helps those wishing to do large volumes of transactions. This enables the ability to chain together data you care about and forget the rest of the dataset. Unlike the Bitcoin Blockchain that requires you have all of the data to prove any of the data, Factom allows you to prove your data set without needing all the data in Factom.
What makes it unique?
Factom provides a distributed mechanism to lock in data, making data confirmable and independently auditable. This simple purpose is extremely powerful when applied to business dealings and processes. Factom enables people and businesses to use a mathematically provable “notarization” service.
Factom isolates the use of a protocol from a tradeable token, through a two-tiered payment system using Factoids (FCT) and Entry Credits (EC). This to me, is a novel way to ensure business practicality, since:
- Firms would be wary of holding cryptocurrencies due to legal concerns or due to its internal policies
- The extreme volatility of cryptocurrencies could adversely impact the financial budgeting functions of any business
In order to address these real issues, Entry Credits (EC) were created to isolate the use of Factom’s protocol from the tradeable token, since companies can purchase EC directly from Factom enterprise. EC allows companies to enter data into the protocol, and one EC allows you to enter up to 1kb of data and costs $.001 at present.
Is There a Need for Factom (FCT) Tokens?
Factom’s tokens are called Factoids, or FCT. The main reason for the existence of FCT tokens is the idea of scarcity. Anyone can input data into Factom layer since it is unbiased. In order to limit spam, scarcity has to come into play. Therefore, FCT adds a cost to the RIGHTS of putting data into the Factom protocol, as well as ensuring there’s no centralization. What do I mean by centralization? Assuming if it uses BTC instead; there must be a party that issues the RIGHT to add data into Factom protocol, and this is blatant centralization!
The interesting thing about entry credits is how they come into existence. Factoids are converted into entry credits. Entry credits are not transferable or reusable. They are a one-off token whose sole purpose is to allow data to be hashed and inserted into a private chain.
Factoids are ‘burned’ when entry credits are created. Burning means that the factoids are destroyed, thereby limiting the number of factoids in existence, at least until Milestone 3 is reached. Entry credits are also burned upon usage. So until Milestone 3 is reached the factoid supply is deflationary, that is that usage reduces the number of factoids on the market.
The theory behind this is that a large burn rate of factoids will produce a diminishing supply, and as the factoid price goes higher, the number of entry credits per factoid will increase, as the entry credit price is fixed. Should you be an investor, and once Factom usage takes off, it means that your holdings should theoretically increase in value.
Factom is most easily understood as a protocol that provides unlimited books of blank paper. Users of the protocol can take a book, label it with the title of their choice, open the book, and write on a page. When that page is submitted to Factom it cannot be altered or deleted. Nobody can back-date a page. All the data written into the book is preserved in the order it was presented to the Factom protocol.
Factom guarantees security of the records by three different methods:
Proof of publication — the existence of each entry in the chain can be proven
Proof of process — all of the entries are grouped in a chain which enables their enumeration, examining the order and validity
Proof of audit — the chain is immutable, so it can be presented and examined at any time and documents behind it can be independently validated against the chain
The applications of the Factom protocol can be extended to a wide range of industries. Essentially, Factom can be applied to any business or industries that possess a need to organize data effectively and preserve its integrity. Basically, extending the traits of Blockchain technology that includes immutability, censorship-resistant, easy verification, and validation.
During an interview Factom’s CEO Paul Snow described three major use cases that are already being implemented thanks to partnerships with the Department of Homeland Security and the Gates Foundation:
“We are working with the DHS [Department of Homeland Security] to provide audit trails for data collection on U.S. borders. Certainly, our technology will ensure sensors are secure against those that would tamper with them. Our technology will also provide audit trails that ensure other parties that the data collected is properly disclosed when required, the integrity has been maintained, and that data held back as irrelevant is probably irrelevant (not collected within some timeframe, or at some location).”
“We are working on data management applications to ensure that mortgages can be processed faster, cheaper, and within the current regulatory framework. This involves auditing and tracking data collection from many different parties over time about information covering every aspect of a mortgage. Income verification, property history and maintenance, taxes paid/owed, payment histories, property surveys, zoning, etc., all produce many documents that must be reviewed in the course of issuing and maintaining a mortgage.”
“We are working with the Gates Foundation to ensure medical records are maintained, and available to parties providing care in developing countries to individuals that may have been treated by many different organizations in the past. This application has to be available when needed, transportable to remote locations without Internet access, secure, private, and require little in hardware and human resources.”
The Factom team is divided into the executive team and core developers. Looking at their credentials, they possess strong expertise in the tech line and the business world and has offices in major cities. Factom also has deep connections with the business world, in government and banks too.
In November 2017 Founder and Factom visionary, Paul Snow, assumed the role of CEO for Factom. Snow had plans to continue Factom’s leadership in the enterprise software space as well as to serve blockchain companies during this unprecedented time of growth. Factom Co-Founder, Peter Kirby, also holds the position of President, leading company operations, guiding revenue growth and product roadmaps.
Supporters and Investors
Factom has amassed a credible line of backers that are well-known and influential. A few mentioned below
On Oct. 5, 2016, Factom announced the success of a $4.2 million Series A capital raise, led by billionaire investor Tim Draper. Draper auspiciously stated afterward: “I believe that the Factom team has the opportunity and the potential to build a company greater than Oracle and Palantir and IBM combined”
On Nov. 18, 2016, the Bill & Melinda Gates Foundation announced they had awarded Factom a $500,000 grant “to build a Proof of Concept prototype of a digitized medical record system for individuals living in remote developing areas of the world”
Three days later, Smartrac—the leading provider of radio-frequency identification (RFID) products worldwide—announced they had partnered with Factom to create an integrated document-verification-and-authentication solution. And last month, the U.S. Department of Homeland Security revealed a second, follow-on grant to Factom designed “to advance the security of digital identity for the Internet of Things (IoT) devices.
To sum up, Factom is an undervalued coin which may seem boring but holds huge potential. Given the fact that that there is no FCT supply until it reaches a Point of decentralization where there’ll be 32 federated and 32 audited servers on an electoral format to ensure good behaviour.and that FCT will be “Burned” to produce ECs, its value will increase with usage. Factom has great appeal to organizations, thanks to its dual-tiered currency system. Considering that most of its partnerships are in the pipelines and kept silent due to Non-Disclosure Agreements, all it takes is confirmation of adoption by major corporations for Factom to sky-rocket.
Factoids are available at the following exchanges: