Factom Coin: Full Analysis
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Factom Coin is a remarkable idea. It changes how businesses share and store their data in a transparent, safe and honest way. Any private data is kept private when using Factom, and threats like corruption, fraud, and forgery are avoided. To summarize it, the platform helps guarantee data integrity. The network achieves this by letting hashes of large quantities of data to be stored on blockchains that are secure, like those of Ethereum and Bitcoin.
Furthermore, it separates the blockchain technology’s immutability from currencies that are normally associated with it, making data storage on the blockchain cheaper and easier for businesses. Factom also makes auditing easier. In fact, the only time you need to audit your data is when you enter it into the network’s system. And because of the blockchain’s immutability, as long as the data you enter is known to be true at the time it was entered, anyone checking out the documents is assured that the data is unaltered and correct. Data entered into the Factom blockchain gets time-stamped. Thus the platform can be used as a straightforward proof of publication. Let’s learn all about Factom coin below.
What Is Factom?
Factom is a disseminated record keeping system used to for storing massive amounts of data on a blockchain. It functions as a validation and verification layer as well. Factom’s most essential concept is separating Data Layer or notarizations from the Value Layer like the BTC protocol facilitating value transfer, thus allowing users to notarize documents securely in a separate system. To ensure immutability of the primary data, an anchor of the records of the system is then documented on the BTC blockchain. Federated servers, which functions just like a node, are required by Factom to anchor every information and run every operation.
The platform uses a decentralized database that has end-to-end encrypted storage to put records into various locked boxes instead of putting all in one place. Instead of being open to all admins, access can be arranged to different regions on an individual basis. Factom also keeps track of who is granted access, so in case there are any changes made, it’ll be identified and modified quickly.
In terms of the data level of Factom cryptocurrency, cryptography is used when a record is hashed into the Bitcoin network, making it impossible to hack. That information is then distributed throughout thousands of computers all over the world. Basically, this means that the system will not be brought down with the loss of one server, thus making it highly secure.
How does Factom coin work?
The Factom protocol is quite complex. But basically, every entry submitted will have a Chain ID, which will determine the sub-group where the entry will be included. The maximum size of entries is 10kb, but users are allowed to use multiple entries so that they can link larger files together. A chain is formed through a sequence of entries. The mandate of the entries is then recorded by the chain leaving an audit trail. In simplest terms, chains are simply like folders, while entries are the files that are put into the folders.
On the other hand, a group of hashes of every entry with a specific Chain ID is called an Entry Block. Keep in mind that an Entry Block comprises of only the hashes and not the Entries’ actual data. When the hashes of the Entry Blocks are grouped together from that particular timeframe, the Federated Servers produce a Directory Block every minute. When 10 Directory Blocks are created, which takes place every 10 minutes, the hashes from these Directory blocks are then fastened into the blockchain of Bitcoin. The Federated Server performing this actions is randomly selected.
Because of how the network is designed, auditing records become a low-cost and easy process. Whereas in order for a transaction to get validated in Bitcoin, you need the full history of the blockchain, with Factom, this is not required. The amount of bandwidth you need to audit records are greatly reduced with the use of Chain IDs and Directory Blocks.
The Technology Behind Factom
A consensus algorithm is being used by the Factom network. Through this, a consensus is reached by randomly selecting a leader from the Federated Servers pool.
- Federated Servers. These are the servers on which the Factom network is running primarily from. In addition, Federated Servers are the ones that can only receive Factoid rewards as well as write data to the blockchain.
- To prove the existence, these servers send an instant message to the network’s followers. If one of the Federated Servers does not generate an instant message, the followers will start a new election right away to select a new Federated Server to take its position.
- Audit Servers. These servers double check the Federated Servers’ work. A Federated Server becomes an Audit Server if a mistake was made and then an Audit Server will be upgraded to a Federated Server.
- Follower Servers. These servers are only allowed to make transaction requests. Once a Follower Server receives an entry request, it will forward those requests to the Federated Server.
The Factom Team
The Factom Cryptocurrency is headquartered in Austin, Texas, USA and operates from other locations such as Sunnyvale, CA, Honduras, London, as well as Shanghai and Beijing, China in order to meet their international customer’s needs.
The brainchild behind this project was David Johnston, Factom’s Chairman of the Board and Paul Snow, Chief Architect. The idea of the project started out in 2014, putting it in line with the older end of the blockchain range.
- Their aim was to change the future with the use of the software they’re shaping up at that time.
- Their vision is for businesses to practice transparency with the help of their products.
Since its inception, its team has made steady development and progress.
The company’s core team consists of several members with numerous years of experience in the blockchain industry. In fact, their Co-Founder/CEO Peter Kirby and VP of Product Management Abhi Dobhai, have worked together previously at CoinTerra Inc., a company that produces ASIC miners for BTC. They also recognize the strength of their team, and all areas of their operations are consist of an experienced group of people. Factom encourages everyone on their team to be the best that they could ever be and is creating a workforce devoted to changing the future.
- Today, Factom have more than 11 million entries and some noteworthy partnerships as well.
- Furthermore, in order to deliver order trails for data gathered at the US borders, they have teamed up with the Department of Homeland Security.
- The team also partnered with the Gates Foundation in order to store people’s medical records in emerging countries.
The Factom Roadmap
Factom has achieved some notable milestones over the years. Here is the company’s developmental roadmap.
- July 2015. In this milestone, Factom blockchain was built via a genesis block, and its centralized software protocol to host the software, as well as involved the establishment of pioneer servers.
- September 2015. The pioneer servers of Factom went live. During this time, the platform was centralized and controlled by the company, but applications are allowed to be built upon its protocol.
- December 2016. The Factom protocol consensus algorithm was set in place. This software supports the distributed processing and transactions times are enabled for just a matter of seconds. In addition, multiple blockchains like Ethereum and Bitcoin are supported, providing an even sturdier network. New tools in Factom’s public test-net or development suite are also enabled along with 8 Federated servers for its network.
- After 12 to 16 Months. In this milestone, in order to guarantee good behavior, the point of decentralization included 32 audited servers and 32 federated servers in an electoral format. And to balance supply, 73,000 FCT are issued.
What makes Factom Unique?
The use of a protocol is isolated by the Factom Coin from a tradable token. This is done by a payment system that’s two-tiered using FCT or Factoids and EC or Entry Credits.
- Companies would be cautious of holding cryptos because of legal concerns or from its internal policies.
- Digital coin’s extreme volatility could have an adverse impact on any business’ financial budgeting roles.
To address these rather real issues, Factom created EC to isolate its use from tradable tokens, because firms can buy EC straight from the Factom enterprise. This lets firms to enter data into the Factom protocol as well as let them enter up to 1 kb of data.
Factom Harmony Solutions
The Factom Harmony Solutions combine the platform’s unique blockchain technology with a digital fingerprint for every data file or document and advanced cryptography tools to provide lenders with a secure method of storing and exposing individual loan documents or files to several third parties. This creates a new kind of blockchain vault for every loan documents.
Furthermore, an immutable loan index is established for all closed loan documents, thus generating permanent records and directory of all final loan documents. This leads to smooth audits and reduced quality control because of review time and thoroughness saving your company money and time.
- Regulatory Auditing and Litigation. A secure, unalterable and comprehensive single document catalogue are eliminating document assembly costs and saving lenders time through the consolidation of document storage. Lenders can also easily and quickly provide their auditors with credentials to the files associated. Hence, any risk of missing or losing documents will be eliminated.
- Quality Control. One of the biggest sources of creating false impressions of poor quality, defects and produce unnecessary costs and quality control process challenges are documentation errors. With the Harmony Solutions of Factom Coin, costs of document assembly are eliminated, as well as lost documents, exceptions, duplicate documents and document issues.
- Mergers and Acquisition Due Diligence. Lenders are provided with a blockchain-based secure solution for reviewing and assembling of documents within a loan via a diligent process. Whether it’s for whole or bulk loan sales, conduit, securitization or file transfer, the decrease in costs will be significant to all parties to audit and review the data and documents related to the transactions.
The Factom coin applications are extendable to a wide array of industries. Basically, it can be applied to any type of industry or business that requires preservation of its integrity and needs to organize data effectively. Essentially, extending the blockchain technology’s traits that comprises of easy validation and verification, censorship-resistant and immutability. These applications include the following:
- Mortgage Industry. Factom Harmony is a solution focused on bank’s mortgage data.
- Factom has a grant funded by the Bill and Melinda Gates Foundation to help securely and reliably maintain medical records of developing countries, rendering them readily accessible anytime.
- Smart Cities in China. Two landmarks agreements were closed by the company in China. One is with a huge Chinese notary service, Ancun Zhengxin. The other one is providing services of data integrity to iSoftStone, which is strategically planning for over 80 smart cities all over China.
Two tokens are used on the Factom network.
- Factoids (FCT). FCT (also known as Factoid) has its own chain, and you can freely trade them like most cryptocurrencies. Factoid stops users from spamming the Factom network and decentralizes it as well. The network’s servers receive FCT as a reward for the network’s maintenance. These rewards are released by the network at a fixed rate of 73,000 each month in a method that is independent of its rate.
- Entry Credits (EC). Entry credits can be purchased using factoids via the protocol. However, these tokens are non-transferable, and the only way to use them is to vote for Federated Servers or as payment for Entries. ECs have little inherent value, so it’s okay to store them in areas with low-security and little danger of thieves stealing them. If you want to add data to Factom’s blockchain, you have to use your ECs. When you spend ECs, the Factoids used to buy them will be removed or burned from the system.
This separation of FCT from EC opens up the users of Factom who do not want to use or do not understand crypto. They can just purchase Entry Credits with their choice of currency. The network then purchases FC from the open market and remove them in order to cover the buying.
Factom Price Growth
In June 2017, the price of Factoid reached its all-time high of $33.72 or 0.0135 BTC. Ever since its price has dropped steadily with a couple of spikes which were short-lived. At the time of this writing, Factom coin’s current price is $21.94 or 0.00264079 BTC.
The Factom network is growing in popularity, so we may see a change on this in the coming months. Keep in mind that FCT prices are directly linked to the amount of usage of the network. So basically, the more businesses jump on the bandwagon, the more it will become expensive to submit Entries, which will affect the price of Factoid.
Each month, 73,000 FCT are being created. Once the amount of FCT being burned overtakes this, Factom cryptocurrency will become deflationary, which may result in prices driving up even more.
How to Buy Factom Coin?
- To purchase FCT from these exchanges, you have to have your own Ethereum or Bitcoin first or buy some from other exchanges like Cex.io.
- Register for an account on one of these exchanges that allows trading of FCT.
- Deposit funds into your account and buy Bitcoin.
- Move your BTC to an exchange. Make sure you have also opened up an account on another exchange.
- Exchange your BTC to FCT.
You can check out CoinMarketCap’s list of all the trading pairs and exchanges available for FCT.
Factom Enterprise Wallet
This is a secure desktop GUI wallet that you can run locally or online upon synchronization with the blockchain, which can take a bit of time. It is available to download for Windows, MAC, and Linux.
Cryptopia focuses on providing a good user-experience for crypto traders. They provide a marketplace, exchange services, mining pools and support framework for every coin listed in the platform to make digital currencies more accessible to everybody. Although it’s a rather small exchange based in New Zealand, it offers a wide range of altcoin assets. FCT is currently being traded at Cryptopia as 1 market pairs with 1 base currency of BTC. The exchange also non-BTC pairs options to trade. However, there are a number of complaints online from users experiencing poor customer service, perhaps due to the exchange’s buckling under the demands of its users.
Bit-Z has a massive number of crypto listed with some that have yet to be listed on other bigger coin exchanges. Their fees are priced fairly and on the lower side when compared to other exchanges. However, their reputation at the moment is mixed, with some users loving their services and others complaining about the inconvenience of waiting a long time when withdrawing their funds. FCT is currently being traded here as 1 market pairs with 1 base currency of BTC.
Bitterex may be considered as a great exchange for traders and newbies looking for a sturdy and secure platform to trade multiple cryptos, but it lacks customer support. Also, there are reports of questionable freezing of user accounts recently. You may proceed with using the exchange, but with caution though. FCT is currently traded on Bittrex as 2 market pairs with 2 base currency of BTC and ETH.
To Sum up
Factom Coin is a project that’s very well-established, providing a solution to a massive problem that has been plaguing multiple industries. Although its team is not focusing on marketing, they do work subtlety to build business partnerships as well as continue to improve their products. Factom’s team have experience on working together on previous projects and boasts of numerous years of blockchain experience. It will be very exciting to watch how FCT’s price will respond to the company’s growth and also what the scenario will be when or if it will hit a deflationary point.
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