Factom

Factom is a decentralized blockchain protocol for building independently verifiable and immutable record systems. 

Overview

Factom is a decentralized publication blockchain that you can build on top of current blockchains such as Bitcoin and Ethereum. Factom allows for the secure storing of digital proofs for integrity solutions and data provenance without exposing private information or using trusted intermediates. 

Factom is an open-source software created on top of Bitcoin. Individuals and businesses can also develop on top of the bitcoin blockchain using Factom. The minds behind this project designed it for users who need to trust their digital data, such as in the medical industry. 

Factom employs a distributed ledger architecture for more effective storage and retrieval that allows related entries to be connected chronologically in a chain. Entries can contain any type of data, except private and personal information. Entry data are stored in DHTs (distributed hash tables) and transferred from peer to peer. Each entry is hashed before it is written on an entry block.

Factom uses military-grade, end-to-end encryption on a cloud-based blockchain. In addition, it supports system tracking, individual access levels, and various other enterprise tools on the Factom while encrypting and decrypting hashing records on the Bitcoin blockchain. 

Product Detail

Factom protocol is a decentralized way of collecting and securing data onto the bitcoin blockchain. The Factom protocol uses a network of decentralized servers to gather, organize, and secure data onto the Bitcoin Blockchain. Different components of the system are delegated to these servers. No single server is ever in charge of the entire system, nor is a single server in control of any network element permanently; responsibility for each part of the system is rotated among the servers every minute.

To keep information off the Blockchain, Factom creates its own structures. The Factom protocol allocates them throughout the Factom nodes' systems, a peer-to-peer network similar to the Bitcoin Network. First, Factom stores a lot of data in the Blockchain by placing a single hash. Then, a Merkle Tree is used to integrate all of the entries received over 10 minutes and deposit a single hash (the Merkle root) into the Blockchain.

Factom provides a faster, cheaper, and more secure solution for applications to run without crowding bitcoin. Factoids (Factom's native token) works similarly to Bitcoin, allowing for multiple inputs, outputs, and multi-signature security. A unique Factoid Chain manages factoid transactions. As a result, the Factoid chain is more restrictive than other blockchain networks. 

The Factom servers will reject entries in the Factoid Chain if they are not legitimate Factoid transactions. Factoids are added to the protocol to decentralize Factom reduce crowds and spam in both Bitcoin and Factom.

Factom makes it easy for organizations to budget their blockchain costs. Most blockchains use one token. Thanks to Factom’s two-token system, organizations can easily budget their blockchain costs. For example, Ethereum is the token for the Ethereum blockchain and Bitcoin for the Bitcoin blockchain. Factom, however, uses a two-token system which are Factoids and Entry Credits. Factoid (FCT) is a variable price token, i.e., the price in relation to the US Dollar varies with time. FCT is created by the network and issued to an organization that runs on the Factom protocol servers. The supply of Factoid is limitless, and it cannot be mined. Every month, a set rate of around 73,000 FCT is released.

You need to spend (burn) entry credits (ECs) to log data on the Factom blockchain. An EC is capable of writing 1kb of data on the Blockchain. They are a fixed-priced token, meaning an EC will forever cost $0.001 (one-tenth of a cent). Although EC is pegged to the dollar, it is not a stable currency as it is non-transferable. 

Factom operates a pure data blockchain that allows developers to build apps on the Factom Protocol using their preferred language. Developers can enter any data onto the Factom blockchain. The servers store the data, doing nothing with it, hence "pure data blockchain." To understand the importance of this feature, we'll need to compare it to another blockchain, say the Ethereum blockchain. 

The Ethereum blockchain entries are sequences of instructions that the network executes. The process will not run as intended if there is a mistake in the set of instructions, and problems may arise. Since the data entered into a blockchain cannot be altered, errors are irreversible. The Factom network does not use the data as instructions, meaning mistakes due to the instructions are not possible with Factom.

Factom Protocol serve businesses looking to capitalize on the power of a decentralized blockchain but won’t hold cryptocurrency for legal or internal reasons. Many businesses want the power of a decentralized blockchain but cannot hold cryptocurrency due to legal or internal reasons. Organizations who wish to secure their data with the Factom Protocol can buy Entry Credits (ECs) from any token holder using traditional (FIAT) cash. Because ECs are more like non-transferable tickets that allow users to enter data into the Factom blockchain, they don't count as crypto coins.

Factom can be used to protect Intellectual property, detect fraud, and lots more. The Factom protocol gives enterprise users access to the full blockchain capabilities. Factom protocols' use cases include fraud detection, insurance claim verification, intellectual property protection, voting systems security, supply chain tracking, trade, and credit financing.  

Factom also uses hash technology which converts digital data to alphanumeric strings. These strings are a form of digital fingerprint, and security for them occurs in three ways; proof of existence, proof of process, and proof of audit. All of these come together to verify identity and prevent fraud. 

Recap

Factom's collaborations, including the Gates Foundation and the United States government, have generated a lot of attention. The team has successfully validated its data integrity technology in real-life applications ranging from law to government to real estate to finance.

Factom is a secure and decentralized smart contract protocol that indexes hashes to allow for interoperability with older and blockchain-based applications. With these elements, Factom has set itself to be a powerful force in the blockchain space.