Factom is a data application platform for the blockchain, and Koinify is a crowdfunding platform that serves the cryptocurrency sector.
The Factom team noted the following regarding the sale:
Our friends at Koinify will be our due diligence and sale partner for this event, ensuring that our token proceeds are distributed according to staged development milestones. Software token sales are an exclusive event where the community is able to purchase a limited number of project tokens that will give the holder privileges to access the network at launch.
The partnerships that Factom has been announcing recently are part of a larger effort to add to the use case and diversity that Factom offers through its technology. Factom’s software tokens, called Factoids will enable users to access the core platform and services from its partners through the network.
The tokens will be generated after the close of the token sale and sent directly to participants. Holders of Factoids will be given priority access to the network and will be of the few to have a first glimpse into the future of Blockchain technology with Factom.
Factom indicated that they were still finalizing the end date of the crowdsale and will be releasing the development milestones closer to the end of the month.
Factom also stated:
Our goal is to be as transparent as the Blockchain and we will be updating the community regularly with our progress on this announcement.
However, Koinify revealed in its announcement that the sale will last 45 days and listed the milestones and their portions of the sale in detail.
The Koinify team blogged:
We will be launching the Factom software sale on March 31st, 2015 at 10:00AM CST, which will run for a consecutive 45 days. Staying true to Koinify’s core beliefs, we have implemented many best practices and accountability methods for the upcoming sale.
The crowdfunding group added:
We will be using a milestone structure, where there will be 3 goals for 33% of the funds each. This is to ensure that Factom developers are incentivized to constantly improve the product beyond their initial release.
The main three milestones are:
◾Release of the Factom Beta Client – 33%
A. The beta release of the Factom client includes having various subsystems operational.
i. Packaging user Entries using Merkleized block structures.
ii. Anchoring blocks into the Mainnet Bitcoin blockchain using a single server.
B. The beta release of the Factom client includes the Factoid chain.
i. Construct a genesis block from the Factoid software sale designated public keys.
ii. Factoids can be reassigned to another address after checking cryptographic signatures.
◾Release of the Factom Front End / Begin Adding Federated Servers – 33%
A. Storefront for selling Factoids and/or converting them into Entry Credits for users.
B. Factom is running on a P2P network and has 8 appointed Federated servers coordinating block creation.
◾Release of the full Factom Peer to Peer Consensus Mechanism / Decentralized Election of Federated Servers Begins – 33%
A. Factom network’s Federated servers go live with the consensus mechanism.
B. Entry Credit based election system begins operating for electing Federated servers.
Third Party Evaluators & Key Holders
Koinify indicated that they will use trusted third parties from the crypto community holding the keys for the wallet that will contain the funds raised via the Factom software sale. Two of the three keyholders must be satisfied that a milestone has been met for any funds to be released. The Factom team will hold one key, the independent evaluator another – who will determine whether the milestones have been met, and a trusted institution, such as a law firm (really?), will hold the third key. Independent evaluator(s) and the trusted institution will be announced on Factom’s project page before the sale launches.
According to Koinify, all funds will be stored in a multi-signature wallet for security and to provide a system of checks and audits inherent to the release of funds.
We will be working with the Crypto Currency Certification Consortium to ensure our key storage meets all levels of security, qualification, and certification. Two of three signatures will be needed to release any funds until the milestones are met and funds are delivered to the Factom controlled accounts.
Koinify stipulated that it is leveraging the Bitcoin blockchain to execute the sale in a fully transparent manner. Bitcoins will be sent to a public Factom address in specially-constructed transactions. These transactions will contain the purchaser’s Factom public key in a data field.
When the Factom blockchain launches, the information embedded in all these Bitcoin transactions will be used to generate the Factom tokens and load them into the purchasers’ wallets automatically. It is easy for anybody to audit and validate that the whole process was done correctly and that funds were attributed to the right accounts, by only looking at the publicly-available contents of both Bitcoin and Factom blockchains.
There is considerable hype behind Factom, so the sale could do very well. Factom has formed partnerships with Tether, Serica, Coinapult, Tradle, and Storj to leverage its platform, and apparently has many more in the pipeline including a national government.
Factom demonstrated its technology with the announcement of hashing of the entire Gutenberg Project (46,000 books) into the blockchain, which can be viewed here.