Factom strives to become a data and record keeping layer of Bitcoin. The project has received ample attention the world over, as the startup has even partnered with the Honduras government to work on a land title initiative and with USAA as an informal consultant. The startup released the genesis block of its protocol a few weeks ago.
The data on Factom is kept off block chain, and the protocol features its own distributed public data layer. Every ten minutes, Factom compiles the data in a merkle tree anchor and publishes it into the Bitcoin block chain.
When you think of Factom, it might help to become familiar with Project Gutenberg, which secures 30,000+ public domain digitized books. “[The Gutenberg Project] is an awesome opportunity to demonstrate how Factom technology can use the blockchain to permanently time-stamp documents in an immutable, distributed ledger,” Peter Kirby, CEO of Factom, says. In the Factom model, private information always remains private.
“Factom lets you publish a ‘hash’ of a document, like a permanent digital fingerprint of the document,” Kirby told CCN.
This fingerprint lets you validate and verify the document without revealing the private information.
When a project of this nature is presented, many people wonder how it can be guaranteed that the information on Factom is available at all times?
“Hundreds and eventually thousands of copies of the data are distributed around the world,” Kirby explained. “Factom publishes a distributed hash table of the information stored in Factom. The Factom servers will publish the full Factom data and make it publically available. In addition, anyone can run a full or partial node of the data they want to make public.” Factom allows you to create chains of broad data architecture tailored to block chain technology, and offers what the startup has called “proof-of-existence on steroids?”
“Existence proofs have been published on the bitcoin blockchain for a year or two,” he said. “They represent a single moment in time, like a photograph,” the CEO outlined. “Factom chains together many data points over time to create a changing picture of data, like a movie.” There are reasons why Factom did not use Bitcoin on this project, such as major limitations in speed, cost, and volume.
“Ten minute blocks are too slow, dust level transactions are prohibitively expensive, and Bitcoin can’t handle the transaction volume that big data applications need,” Kirby told me. Novel ways of using the block chain to organize data have been discussed increasingly in recent years, including Bank of America’s recent announcement about using cryptocurrency technology for wire transfers. Kirby has some thoughts on that development.
“Bank of America is one of many giant financial institutions looking to solve the problems of moving money around the world,” Kirby opined.
Although there’s a lot of excitement around moving money faster, we believe there are many many more problems involving data. At the heart of it, a bank is basically a big pile of records.
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