Factom, a recently announced decentralized protocol aiming to solve the Bitcoin blockchain's problems of speed, cost and bloat, releases API and white paper.
The lead developers of Factom, a new protocol built upon the Bitcoin blockchain, announced on November 17, the release of its white paper and API, according to an official announcement.
The founders of Factom conducted an AMA (Ask Me Anything) session on /r/Bitcoin on the same day, at 2 p.m. (EST), where they discussed the white paper details and answered the community's questions.
“Stretching far beyond the realm of digital currency”
Announced earlier this month, Factom aims to create a faster, cheaper, bloat-free way to develop blockchain-based applications. According to the white paper:
"When Satoshi Nakamoto launched the Bitcoin blockchain he revolutionized the way transactions were recorded. There had never before existed a permanent, decentralized, and trustless ledger of records. Developers have rushed to create applications built on top of this ledger. Unfortunately, they have been running into a few core constraints intrinsic to the original design tradeoffs of Bitcoin."
These constraints, reads the paper, are speed, cost, and bloat. It continued:
"Factom is a protocol designed to address these three core constraints. Factom creates a protocol for applications that provide functions and features beyond currency transactions. Factom constructs a standard, effective, and secure foundation for these applications to run faster, cheaper and without bloating Bitcoin."
Factom's simple extension of the Bitcoin blockchain, allows users to run their own personal, provably immutable ledgers. Users and applications, also have the ability to define which information is stored in the ledgers. "Foactom lets you use the blockchain without forcing you to use the currency," explained Factorm's CEO and core developer Paul Snow, who continued:
"Factom opens the door to transparent and secure audits of all business processes, not just financial ones. Users of Factom can leverage the blockchain for projects in title records, the Internet of Things, security, medical records, banking services and more. And users can do this without using Bitcoin or any other digital token. "
Factom's numerous initiatives aim to help establish the technology as the true standard bearer of Bitcoin 2.0, and the developers are expecting to see new and innovative ways in which the protocol can be applied. This technological breakthrough is said to have to the potential to reach beyond the realm of digital currency, to more traditional spheres such as business and law.
AMA session sum-up
In their AMA session, the founders of Factom, Paul Snow, Peter Kirby, and David Johnston, answered the community's questions regarding Factom's freshly released white paper and API. Here are a few topics and questions that stood out:
shannoncode: "Do you guys see Factom as an alternative to sidechains, not related, or complementary?"
Peter Kirby (petermkirby): "Definitely complementary! Sidechains is really cool technology that lets the blockchain do much more interesting things with currencies and value exchange.
Factom is more about record keeping and data. When Sidechains gets implemented, we'll have to write some special code to accommodate them. Sidechains is a special case of the broad things that can be done with the blockchain."
The sidechains technology was introduced earlier this year, and aims to increase Bitcoin functionality by allowing off-blockchain 'add-ons.' While trying to achieve the same goals, Factom and sidechains are using different mechanisms.
cryptomarketstech: "Can you describe a bit how you are going to solve bloat/scalability issues... Given you want to use the blockchain for new things (beyond bitcoin payments etc.)."
Paul Snow (alanX): "Factom actually keeps the information off blockchain, using its own structures, and distributes them over the systems running Factom nodes. It is a separate P2P network, much like Bitcoin's. All the entries we receive over 10 minutes are combined via a Merkle Tree to place the single hash (the Merkle root) into the blockchain. In that way we reduce bloat.
Users put their entries into their own chains. They create them, define the rules for their chains, and populate them. Chains all have their own proofs that drive to the Bitcoin Blockchain. If you have your chain and your data, you don't need anyone else's data. So effectively, there is no limit on the entries we can process, but at the same time other users don't get bogged down in your data."
creationlayer: "Will Factom offer any services to actually develop systems for your use cases? It seems that a lot of your use cases appeal to traditional business that may not be acquainted with Bitcoin technology. How do you plan to onboard such projects?"
Paul Snow: "One of the main ways we are going to make Factom approachable to businesses outside of Bitcoin. First thing, traditional business can access Factom without cryptocurrencies. This is because we built the system so that Factoids (the Factom token) are converted to Entry Credits assigned to a public key that are:
- Non-transferable;
- Can only be used to place entries into Factom.
This means that "traditional business" can buy access to Factom from someone that has Factoids (like the servers that get Factoids for running the system) using Bitcoin or even a credit card. Heck, they can set up a subscription with a CC to keep their public key "full".
They don't need a wallet, and they don't need to touch any cryptocurrency. And since for at least the short term, servers will need to pay bills, this is a way to sell a subscription to a service to get money.
Note: NOBODY here is a MSB or a MTB. Entry Credits are the only thing the customer touches, and the protocol and the server are the only parties involved in moving Factoids. And I am pretty sure the law doesn't consider a protocol a party in a transaction."
Peter Kirby: "Let me answer the second part of this question, while Paul answers the technical part:
The way to onboard traditional companies (Like Bank of America or Bowing) is by engaging with the consulting companies that already have a relationship with them. IBM, Deloitte, and McKinsey are all building groups to explore blockchain technology and build robust business solutions on top of the blockchain.
BoA [for instance], will want to engage with one of these big software consulting firms because they have credibility and experience working with projects of this scope.
However, there will also be hundreds of new application companies that are launched using Factom and blockchain technology to solve problems in fast, cheap, and novel ways. You could be the next salesforce type company that totally disrupts the way big companies do business."
udecker: "What do you see as the first use-case of the Factom technology, in terms of third party adoption?"
Peter Kirby: "Making exchanges honest is one of the first projects that's being done on Factom. You can run a proof-of-audit on steroids - letting you produce a true audit trail of every transaction at every moment. That'll really get businesses to sit up and notice.
The other application that will pop up right away is Title Records - because they secure such a large portion of a country's wealth. We've already had a country reach out to us about building a Title Application using Factom/Bitcoin Blockchain.
We've also been approached by a group that wants to trade commodities with Factom.
Big companies like Bank of America and BP have been fined $10's of billions for losing track of their systems of record. So you'll see a lot of fast movement in the opportunity to move mortgage and energy systems onto Factom.
Lots of interesting things being built on Factom - my guess is the first ones will be the simple options that solve a lot of pain."
Did you enjoy this article? You may also be interested in reading these ones: