Factom and its FCT coin: A starter’s guide
In this era of data manipulation and concerns over the accuracy of information, a flawless verification mechanism is invaluable and this is where Factom comes in.
What is Factom?
Factom is a platform built on top of blockchain networks such as Bitcoin. It functions as a permanent unalterable directory and therefore provides a verifiable means of keeping data. The platform does not add the endless blockchain transactions to systems not designed to cope. This is because Factom efficiently stores data in the form of hashes on the blockchain.
As a result, it can secure million real-time transactions in its fully transparent database. Data from anywhere can be compared to that stored on the blockchain for verification. The end result is a fully transparent, cheaper and secure system which still retains the decentralized advantages of blockchain technology.
Factom is based in Austin, Texas and creates applications that utilize blockchain technology. The company’s products are used in a wide range of sectors for functions like data integrity improvement and even auditing.
An example of these products is the Factom Harmony. This is a document management application that relies on blockchain technology and is suitable for the mortgage industry. Another flagship product is dLoc by SMARTRAC which is a handy solution for authenticating important documents as birth certificates or land titles.
Other applications include an Anti-Corruption Tool which Factom and Bitsapphire are working on. The tool specifically addresses land registry problems common in Kosovo. To protect IP (intellectual property) of artists, especially musicians, Factom works with Peertracks. Through a special Factom API anyone can crosscheck and authenticate content if it violates IP property of the musician.
FCT coin price
As of this writing, the Factom coin, or FCT, is priced at about $25. It goes without saying that there has been a significant drop in the coin price from the highs of late 2017 where it was valued at $70. That said, it is still an impressive feat because Factom traded for less than $3 early in 2017. As of this writing, the market capitalization of Factom as per CoinMarketCap is $225,628,004 USD.
The Factom ICO presale commenced on Mar 31, 2015. In the initial day of trading, more than a million tokens were sold. It is important to note that the only accepted form of payment was Bitcoin.
As a matter of fact, the Bitcoins for this purpose were released in three batches, each of 33 percent. The first 33 percent were for when milestone one was reached, and the same to the second batch. The third batch will be released once milestone three is achieved.
During the ICO, an impressive $1.1 million, the equivalent of 2,278 BTC at the time, was raised from 323 different investors.
Factom: How it works and its key features
One might find the Factom underlying mechanism complicated. To ease matters, let’s first understand what hashing means.
To explain it in layman terms, a Hash is a tool that enables the conversion of, for example, a document or video into a fixed computerized string. The end result of a hashing output is a unique identifier of the converted data. Factom relies on the hashing algorithm SHA-256 to streamline this process.
An easy comparison would be a fingerprint. This obtained identifier is permanent and cannot be altered. The hashes are combined into a single hash and anchored to Bitcoin’s blockchain.
This hash remains on the blockchain. Anytime a person seeks to authenticate data, they hash it and compare it to the hash on the blockchain. If it fails to match with the original hash, the data has been manipulated. Similarly, if the two hashes match, the data is verified as accurate.
There are certain checks on the system that ensure that Factom operates smoothly as intended. These checks are termed as ‘Proofs’ and are as follows:
- Proof of Existence – Once a company enlists the services of Factom, their data is hashed. These hashes are combined into a single hash on the blockchain and have a time stamp. The addition of hashes every ten minutes confirms that the data existed at a certain time. That is proof of existence in a nutshell.
- Proof of Process – This is essentially the process of making entries and verification on the blockchain.
- Proof of Audit – Since Factom is anchored on the Bitcoin blockchain; the hashes can be produced anytime for audit.
FCT coin: Uses and utilities
The need for efficient and secure data storage and verification can extend to thousands of sectors worldwide. Here are some additionals uses for Factom:
- Mortgage data – Banks can store mortgage data of millions of customers efficiently on Factom. Unlike traditional methods of storage which are bulky, this platform offers a cheap fast alternative.
- Healthcare data – This is another sector that normally churns out loads of continual data. Factom is the ultimate solution to settle issues of storage of such data.
In summary, any industry that stores data in some form should consider Factom.
Factom: Platform and technology
It is important to note that there are two different tokens that Factom uses:
These are the predominant tokens and are synonymous with Factom itself. The token boasts of its own chain in Factom. Besides, it can be freely traded like most other cryptocurrencies. It is through the supply of FTC that the network remains decentralized. Additionally, it prevents spamming of the network. Factom servers are rewarded with the coin for their help in maintaining the network.
Entry Credits (ECs)
Factoids can be used to buy ECs via the protocol. These tokens are non-transferable meaning that ECs serve as a mode of payment for entries and voting for Federated servers.
By virtue of their low value, they are typically not as lucrative a target for thieves as Factoids. As a result, there is usually little need for ultra-secure storage.
The importance of safe storage of digital assets cannot be overemphasized. Never has there existed an easier, more valuable target for hackers. Unlike some other networks, wallets don’t seem to be the primary focus of the Factom team. At the moment, there aren’t many wallets that support factoids.
Despite that, there are two recommended options:
- Desktop wallet (Enterprise Wallet) – This is one of the recommended ways to store your FCT. Notable also is the fact that Exodus Eden, which is an unsecured pre-released software from the Exodus company, now supports Factom.
- Paper wallet (Factoid Papermill – The Papermill allows a user to effectively secure factoids by creating public and private factoid key addresses. It is compatible with Mac, Windows, and Linux.
Factom: Team and founders
Factom is the brainchild of Paul Snow and David Johnston. At the moment, Peter Kirby is the company’s president while Snow serves as the CEO of Factom and Johnston chairs the board. Additionally, Brian Deery joined as the chief scientist. Snow and Johnston had the origin conversation on Jan. 24, 2014. The former proceeded to begin coding six months later on June 11.
Consequently, a blockchain based platform began to take shape and the first media article was released on Nov 11, 2014. The Factom white paper was published on Nov 17, 2014, followed by the launch of the release of Factom version 0.1 on Jan. 25, 2015.
With that in mind, a blockchain based data security platform was now in existence. What followed was the presale.
A notable development in Factom’s timeline was a project with the U.S. Department of Homeland Security in June 2016. Moreover, Factom partnered with the government of Honduras to create a secure land deed registry. Henceforth, the country has addressed the problem of fraud involving land title.
Factom: Can you mine Factom?
The simple answer is no. Mining in the traditional sense is not possible since it is built on the Bitcoin blockchain where Factom data is anchored on. Unlike Bitcoin, Factom isn’t designed as a payment solution or a currency.
The transaction processing of Factom comes from 32 federated servers which act more like “mining pools” as they order transactions within the network and build the blockchain. The decision on which nodes get to become federated M3 servers come from a vote by the biggest users of EC’s at the time. This way transaction ordering servers are known in advance improving response time in the process.
On the wings are 32 Audit Servers which can replace — in real time — the 32 Federated servers in case of massive failures. There are even more candidate nodes competing to become Audit servers at any time.
The network does not exhibit a linear roadmap as can be seen for most projects that are similar. Nonetheless, the project’s progress can be tracked in the form of ‘milestones’. At the moment, these milestones have been achieved.
Milestone one — This involved building a blockchain using the genesis block coupled with the centralized software protocol. Additionally, there was the task of establishing pioneer servers. These were critical baby steps and ensured the platform was up and running.
Milestone two — This involved the setting up of the consensus algorithm through which Factom gets its processing capabilities.
Milestone three — The third milestone was to be achieved when there were 32 servers in existence; both federated and audited. This is in line with the decentralized ideals of cryptocurrency. Besides, Factoids would be issued at the rate of 73,000 a month to balance supply. The importance of the third milestone is to ensure the long-term stability of the platform.
Twitter — Factom has a strong Twitter presence as shown by its 76,000 followers. Its handle is @factom.
Reddit — Reddit is a popular destination for technology enthusiasts. It is no surprise that Factom regularly publishes information on this network for its approximately 8,000 readers.
Medium — Factom is featured on Medium.com as well. There are articles as well as reviews that can be helpful in understanding the network.
Coinmarketcap — The coin is listed on Coinmarketcap as the 64th largest cryptocurrency by market capitalization. Additional information is also provided.
Factom: How to Buy
There are certain exchanges where you can buy Factom. These include Bit-Z, Poloniex, and Bittrex. It is important to note that they are traded for Bitcoin only.
In the grand scheme of things, the network is an asset for the cryptosphere. The immutability of data provided is a strong boost in the adoption of blockchain technology. This network is a legitimate bridge between cryptocurrency and data management.
The team has to be more aggressive in marketing. Despite that credit has to be given for the behind the scenes efforts to form business partnerships and upgrading services consistently. The team should also make improvements to the compatibility of Factoids with various wallets. This can improve transactions on various exchanges.
Factom: Final thoughts
Factom is a timely entity as it solves issues that span several industries. The importance of data authenticity cannot be overstated. This is why any cryptocurrency enthusiast should track the growth of this network keenly. As the world continues to embrace cryptocurrency, it is poised to only grow bigger.