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About Factom

Vance Wood

Vance Wood

November 26, 2020

5 min read

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The Factom blockchain is designed to handle many complex business problems using big data, such as in mortgage lending.

The result was a robust audit solution.

The Factom protocol is open-source and anyone can run a follower node or create a private network for development and production use.

Differences from other blockchains

Unlike other blockchains, Factom Blockchain introduces a fixed value model that insulates companies from volatile cryptocurrencies. It is designed to efficiently store business records and related records in quick search chains.

The input data is hashed before being written to the input block. And the actual data is stored in distributed hash tables and shared peer-to-peer networks.

Each block of the chain is protected in the Factom blockchain. It is also additionally protected with cryptographic anchor records written in Bitcoin. Linking to other public blockchains ensures third party compatibility and security.

Five issues that Factom solves:

  1. Scalability.
    First-generation blockchains cannot scale and cannot handle transactional loads.

  2. Complex data.
    Traditional blockchains are limited to data that can fit in the memory of a single token, limiting usability.

  3. Non-transparent cost model.
    Cryptocurrency-based distributed ledgers have an unpredictable transaction model with high transaction costs.

  4. Complexity in using.
    Most blockchain solutions are complex to configure and deploy across an enterprise.

  5. Bloating.
    With a block size of 1 MB, the number of possible transactions per second is limited.

Documents and data stored in Blockchain-as-a-Service (BaaS) can be verified, which significantly reduces costs.

Many companies are interested in this. Especially if the company needs to store information to be transferred from hand to hand. For example, acts on real estate, medical reports - this is the information for which transmission without loss of accuracy is critical.

Storing paper documents is costly for companies, and traditional digital storage is vulnerable to attackers.

Factom blockchain tokens

  1. Factoids (FCT)
  2. Entry Credits

Factoids (FCT). Factoids, like most other cryptocurrencies, are freely traded.
The main purpose of the token is to convert the input credits of the second Factom token, which are used by users to execute a function on the blockchain. These coins decentralize the system.

Factom servers receive FCT as a reward for maintaining the network. The network pays out these rewards at a flat rate (~ 73,000 per month) regardless of their price.

Entry Credits (ECs) - The second token on the blockchain, can also be purchased separately in USD at a fixed cost. This allows Factom members to be independent of fluctuating rates and have a predictable cost model.

You can use Factoids to buy entrance credits through the protocol. ECs tokens are non-transferable and can only be used to pay for entries or vote for authority nodes.

Entry Credits tokens are used to add information to the blockchain. At the time of use of entrance credits, the factoids spent on the purchase of ECs are subject to burning.

Factom blockchain protocols

The Factom Asset Token Protocol (FAT) is an open-source tokenization protocol built on the Factom blockchain. It is efficient, modular, composable, and extensible. This allows developers to layer token functionality according to their specific use case.

The FAT protocol is built on a set of open-source standards that set out the implementation of pure data tokenization directly in the efficient data structure of the Factom blockchain.

The Factom protocol allows for many smart contract technologies. Create cheap and fully verifiable standalone smart contracts that keep all data confidential, or integrate into the FAT protocol to create self-executing smart contracts.

Factom protocol is hashed in 10 minutes and tied to Ethereum and Bitcoin networks.

Three types of Factom blockchain servers

Federated servers are the main blockchain servers for Factom. Only they can add information to the blockchain, for which they receive Factoid tokens as a reward. If the federated server stops generating an audit message, the successor nodes instantly re-elect a new federated server from the audit servers.

Audit servers double-check. And if the federated server makes a mistake, it becomes the audit server. In turn, the audit server (one of them) is updated to the federated server, which is the federated server.

Serial servers are designed to make transaction requests. When they receive a request, they forward it to the federated server. Since the network does not audit the initial records, you should check all of your records before entering them into the system.

Where to buy or sell Factom (FCT)

You can't buy Factom directly. For FCT purchases, both debit and credit cards and PayPal are suitable. You need to buy Ethereum or Bitcoin on a crypto exchange you trust and then convert them to FCT.
The best crypto exchanges to buy BTC or ETH and then exchange them for Factom:

  • Coinbase
  • KuCoin
  • Coinmama
  • Bitfinex
  • Livecoin
  • Binance
  • Mercatox
  • Coinswitch

Having chosen the exchange that suits your needs, go through registration, find a trading pair BTC/FCT or ETH/FCT, then place an order to buy these crypto pairs.

If you want to sell Factom, simply convert it back to Bitcoin or Ether. After that, you can sell them for Fiat currency.

Vance Wood

Vance Wood

November 26, 2020

5 min read