The goal of the Factom team is to scale blockchain technology to create a platform for robust applications and tools. Currently it is being developed as a system for securing millions of real-time records in the blockchain with a single hash.
Factom is led by CEO Paul Snow – experienced engineer and head of the Texas Bitcoin Association, Chief Scientist Brian Deery – the founder of the Bitcoin Bookkeeper, and President Peter Kirby – serial entrepreneur and marketing executive.
AllCoinsNews recently had a chance to engage in a Q&A with Factom President Peter Kirby.
ACN: Factom seeks to address three core constraints of the Bitcoin blockchain: speed, cost, and bloat. That would be revolutionary but could these become problems later for the Factom model if it gets beyond critical mass? Is there a law of diminishing returns for the Factom model?
Kirby: Factom is designed to be very slim and low-overhead – mostly we collect and organize hashes. There is also way the data is organized with distributed hash tables that allows you to pull only the data that applies to you. Paul Snow would be able to explain the architecture better than I, but basically – it’s designed from the ground up to give it a huge ability to scale. Its scalability resembles the torrent network more than the bitcoin network.
ACN: The major applications that you and Paul Snow have proposed for Factom is accurate business or institutional record keeping. How will the Factom team test this out?
Kirby: We’re working with a few major organizations – Fortune 100 companies, Counties, etc. – that are looking to deploy prototype Factom projects with existing their enterprise software. These projects will give us a good stress test of the system.
ACN: Also would Factom have prevented something like the subprime mortgage crisis?
Yes and No. Factom gives us tools that allow for transparency, accountability, and real time auditing on a scale that has never before been seen. A lot of what “caused” the subprime mortgage crisis came from fraudulent behavior, unaccounted documentation, and very poor audit and rating systems for mortgage backed securities. So yes, Factom could have had a major effect on those parts of the crisis.
The other 1/2 of the puzzle is home values dropped and people stopped paying their mortgages. Hard to imagine how Factom could of fixed that part of the crisis.
ACN: This youtube video was fascinating.
Factom Use Case: Unlocking $9 Trillion in Land Value
However, in many parts of the developing world, property records are surprisingly not digitized. Will that be hurdle to adoption?
Kirby: 2 problems:
a) Digitizing property records is a HUGE project. Far beyond just scanning and documenting old records because you have to prove ownership across 100s of years and multiple governments/occupying counties, etc.
b) Digitized property records creates a HUGE target for corruption and hacking – so these kind of systems need serious enterprise levels of security. This is very hard to create in developing nations.
The deeper you dig into the problem the more insane it seems. That’s why we’re so excited about a blockchain solution. Immutable ledgers and databases are a very powerful solution.
ACN: Also why cryptographic public records when property ownership records are required to be public in many countries?
Kirby: Were talking to a country about this… they’re very very concerned about the safety of their people. If you can just look up the ownership of a property and see who’s wealthy – it presents a huge risk for kidnapping and extortion. It’s a messy problem that cryptography solves well. A public record can be public without revealing the true owner. (In the US and Europe people do this with shell corporations and investment trusts.)
ACN: I read in various reports that you are going to raise funds through crowdsale of your currency Factoids in early 2015. Is that on schedule?
Kirby: Yes. We’ll make a detailed announcement to follow in early 2015.
ACN: Will Factoids be purchased through bitcoins or fiat currencies or both?
Kirby: We’re looking at options to buy with both Crypto and Fiat with a service like Circle. We want to bring as much new fiat into Factom as possible.
ACN: What will the ratio and relationship be between Factoids and Entry Credits?
Kirby: Factoids buy entry credits… Entry credits buy entries but you can’t go backwards. It’s an elegant system that permanently takes Factoids out of circulation and gives Factom tools to prevent inflation. The ratio of Factoids to entry credits is not fixed, but will be able to go up and down depending on the value of the Factoids.
ACN: Also can you explain the difference between a Factom Chain and Sidechains?
Kirby: Sidechains is focused on value exchange of different crypto currencies. Solving questions about how to merge one type of blockchain into another and transfer value. Factom is about data and record management. Both projects want to extend blockchain technology for broader business uses, but they are very different kinds of projects with different goals.