Factom is a blockchain tech company that is totally disrupting the way we think about crypto. I consider it to have huge upside potential, and today I’ll be sharing my thoughts about it with you.
What is it?
Factom is branded as “A data layer for the blockchain”, meaning it is built on top of the existing Bitcoin blockchain. Essentially, it expands upon the Bitcoin blockchain to create a decentralized method of managing records and data. Where Bitcoin is a store of value, store of account, and medium of exchange, Factom claims to be:
- A proof of existence—an immutable record that a document existed at a particular time
- A proof of process—updated documents are linked together to show all alterations throughout its existence
- A proof of audit—verification that the changes that in any document actually took place
Factom has been explained as a protocol that provides unlimited books of blank paper, which I think helps describe it to the average Joe. It is essentially a digital version of just that, although thanks to the blockchain, all the pages cannot be altered. It takes the need for 3rd party trust completely out of the equation.
Factom provides infinitely many business use cases by providing an immutable audit trail and means of communicating/recording all changes to any process. It can potentially eliminate the need for a business to have a central server altogether, thereby increasing security too. No single person controls it, but it can be used by buying into its own cryptocurrency, known as Factoids (FCT)
Features
As mentioned, it is built as an extension of the existing Bitcoin blockchain. Utilizing the longest-running and most familiar blockchain adds to its credibility for both users and investors.
A finite amount of Factoids are created every month by the system. To use the system, a business/client would purchase entry credits (EC) either with Factoids, or from somebody who already has the Factoids. Entry Credits have no tradable value and can only be used as storage on the Factom ecosystem. This way, application developers can use the service without ever having to actually buy Factom, only Entry Credits to store private data.
The fact that Entry Credits are used up (burned) will cause the constant amount of Factoids created monthly to reach an equilibrium value. This ensures this ensures that inflation will not be an issue as long as people use the system. The more entry Credits are used for functional purposes, the less Factoids there will be. The lower the supply of Factoids, the higher the price goes.
Factom utilizes “federated servers” to decentralize all aspects of the system. No server is permanently part of the system nor does it ever control a single part of the system. This makes an attack on the system extremely difficult.
Where it’s headed
The usefulness of Factom in business is easy to see, which is its major strength. Several businesses have already become early adopters of this resource, such as Intrino, China’s DataYes, and Microsoft (ever heard of them?). Not to mention, their marketing campaign is very well funded and managed, and they have had plenty of media coverage.
Some of the major business applications of Factom include:
- Legal—the ability to provide undeniable proof of contracts and other such legal documents to be indisputable in courts.
- Voting systems—provides a method of voting that is incorruptible by third party counters or counting programs
- Property titles—prevents disputes between transfers of asset ownership by laying out clearly defined rules
One of the major use cases of across all businesses is to save enormous amounts of money caused by the extremely high costs of storing the sheer quantity of physical paper records/data.
Speculation
I think that Factom as an investment is definitely worth looking into. Much more valid support from real businesses such as the integration with Microsoft’s Azure should give you confidence to see where this is heading.
The team is large and diverse with many years of experience. The core dev team has great experienced which is supported by amazing product developers, marketing, and executives.
Factom has already been mentioned in various highly esteemed news sources such as Wall Street Journal. It has also partnered with other blockchain companies such as ShapeShift, Tether, and Synero. The idea may not be sexiest but it is incredibly useful. Factom is really setting itself up for success, so I recommend you get in on it now.
As always, leave a comment below to share your thoughts.