Factom (FCT)

Factom (FCT) is a record-keeping system running on the blockchain which makes it easy for businesses to store documents and data. The aim is to separate the data layer from the value layer which will allow any users to securely sign documents in a separate system. In order for all this to work, is requires “Federated Servers” which is like running a node. The white paper can be viewed at https://bit.ly/2sfIbDy (Factom Website).

• Lacking Social Media
• Entry Credits (EC)
• Application Building
• Big Supporters / Investors

If you haven’t heard of Factom I don’t blame you, they are extremely inactive on social media on YouTube they haven’t posted a video for nearly a year. Also for their blog, they post three months which isn’t ideal if you want to engage your community together. We can forget the Facebook page nothing posted on the page is relevant or eye-catching to new traffic. Factom have a good concept but I really think to get this going they will need to keep up with their community by posting daily on their blog, eye-catching Facebook posts and overall just being active. If they can get this under control, Factom will be heading in a good path.

Entry Credits (EC) were created because companies were concerned of holding “Cryptocurrency” which could be the bad reputation it has been getting from mainstream media or general legal concerns. Entry Credits are bought directly from the Factom Enterprise this isolates the use of Factom’s Protocol. One Entry Credits allows up to 1 kilobyte of data submission which roughly costs around $0.001 USD (Price may differ in future).

Now I’m guessing you’re asking what is the use for FCT (Factoids) which is used to exchange for Entry Credits and when a user this also means Factoids are burned when Entry Credits are created, this is because Entry Credits are non-transferable and cannot be reused. So basically overtime Factoids are burned decreasing the market supply causing an increase this will only happen if a huge amount of users are using the Factom protocol.

The applications of the Factom protocol have a huge variety, this means Factom can be applied to any business in any working industry to tailor its needs, for example, Factom launched solution which was called “Factom Harmony” which was focusing on mortgage and banks. This is a really innovative feature as it allows businesses from different industries to organize data effectively and preserve its integrity to tailor its needs.

Factom has a phenomenal line of supporters that are known for their influential actions or success. The Bill Gates Foundations has support Factom by providing a $500,000 USD Grant to them to provide a proof of concept prototype tailored for the medical industry.

Another well-known supporter is Tim Draper who has had huge success in his life by founding a university and his own firm with tons of books and TV Shows he is not one to go out of his way to support a small project unless he knew it had potential, he assisted in the 4.2 Million Dollars capital rise. Even the Department of Home Security gave Factom a grant in order to advance the digital identity for the Internet of Things. However as of late Factom hasn’t seen many people with similar successful backgrounds providing grants or heavily investing in them, as we also have not seen much progress in the past year.

• Paul Snow
• David Johnston
• Brian Deery
• Zachary Lynde

Overall Factom is solving a real-world problem which faces many businesses daily in a decentralized form. I believe FTC is undervalued especially with the burn rate and decreasing market supply expect it to rise. However with this project starting in early 2015 and with only two products I expected more they really seem to be taking their time so I wouldn’t be expecting any major short time rises this is a long hold so if you don’t mind waiting a couple years to get a decent return don’t pass this up.

Unlike most other blockchain solutions, Factom uses two different tokens on its network:

• Factoids (FCT): Factoids are coins that are used to decentralize the network and prevent user spam. Like other cryptocurrencies, they can be freely traded and are listed on cryptocurrency exchanges. They are also used as the incentive for maintaining the network, and are paid out to the Federated servers at a rate of roughly 73,000 FCT per month.
• Entry Credits (ECs): Entry Credits are used to pay for Entries or to vote for Authority nodes. They have little intrinsic value of their own and can be purchased with Factoids or with the currency of your choice, but only through the Factoid platform.

Factom is constructed of a hierarchical set of blocks, with the highest being Directory Blocks. They constitute a micro-chain, consisting primarily of compact references. To keep the size small, each reference in the Directory Block is just a hash of the Entry Block plus its ChainID. These Entry Blocks have references which point to all the Entries with a particular ChainID which arrived during a time period. The Entry Block for a Chain ID is also part of a micro-chain. The bulk of the data in Factom is at the leaves, the Entries themselves. These hierarchical data structures are rendered unchangeable by Bitcoin’s hashpower. They can be conceptualized as different layers. The layers and concepts in the Factom system are: 

1.  Directory Layer -- Organizes the Merkle Roots of Entry Blocks 
2.  Entry Block Layer -- Organizes references to Entries 
3.  Entries -- Contains an Application's raw data or a hash of its private data 
4. Chains -- Grouping of Entries specific to an Application

At its heart, Factom is a decentralized way to collect, package, and secure data into the Bitcoin blockchain. Factom accomplishes this with a network of Authority servers. Authority Servers are the set of Federated Servers and Audit Servers which share responsibility for different aspects of the system. The Federated Servers actually acknowledge and order entries and transactions in Factom, and Audit Servers duplicate and audit the work done by the Federated Servers and are always ready to replace a Federated Server that might go offline

The Federated servers take a very active role in running the protocol. The Federated servers each take responsibility for a subsection of the user Chains at the beginning of the creation of a Directory Block. The process works like this: 

1.  All servers reset their process lists to empty.
2.  The user submits an Entry Payment using a public key associated with Entry Credits 3. Based on the public key used to pay for the Entry, one of the servers accepts the payment.
3.  That server broadcasts the acceptance of the payment.
4.  The user sees the acceptance and submits the Entry.
5.  Based on the ChainID of the Entry, one of the servers adds the Entry to its process list, and adds the Entry to the appropriate Entry Block for that ChainID (creating one if this is the first Entry for that Entry Block). 

Factom splits the two roles that Bitcoin miners do into two tasks: 1 - recording Entries in a final order and 2 - auditing Entries for validity. 

1. The Factom servers accept Entries, assemble them into blocks, and fix their order. After 10 minutes, the Entry ordering is made irreversible by inserting an anchor into the Bitcoin blockchain. Factom does this by creating a hash of the data collected over the 10 minutes, then recording the hash into the blockchain.
2.   The auditing of Entries is a separate process which can be done either with or without trust. Auditing is critical, since Factom is not able to validate Entries before they are included in the Factom dataset.

 With trust-based auditing, a thin client could trust a competent auditor they choose. After an Entry was entered into the system, an auditor would verify the Entry was valid. Auditors would submit their own cryptographically signed Entry. The signature would show that the Entry passed all the checks the auditor deemed was required. The audit requirements could in fact be part of a Factom Chain as well. In the real estate example from earlier, the auditor would double check the transfer conformed to local standards. The auditor would publicly attest that the transfer was valid. 

Ledger

Install the Factom app on your Ledger device to manage FCT with MyFactomWallet. The Factom app is developed and supported by the Factom community.

Before you start

• Set up Ledger Livewith your Ledger device.
• Update the firmwareon your Ledger hardware wallet.

Install the Factom app

1. Open the Manager in Ledger Live.
2. Connect and unlock your Ledger device.
3. If asked, allow the manager on your device.
4. Find Factom in the app catalog.
5. Click the Install button of the app.
   • An installation window appears.
   • Your device will display Processing...
   • The app installation is confirmed.

Myfactomwallet

MyFactomWallet is a free, open-source, web-based Factom wallet. Use your Ledger hardware wallet or directly import private keys.

In addition to supporting the Ledger Nano S, MyFactomWallet also provides functionality to move funds with the use of a factom secret key or a Factom 12/24-word seed. These can either be generated fresh in the wallet, or imported from existing keys/seed.

Jaxx

What's really great about jaxx.io is that it doesn’t store the private keys on its servers but on the device of your choosing. Another reason to love Jaxx is cross-platform functionality. It is available on 9 different platforms and can be interlinked with all these platforms which means that the same balances and wallet is available when a different device is being used.

Exodus

 Another good example of a desktop wallet that supports FCT is Exodus, which supports numerous other cryptocurrencies along with Factom and is pretty straightforward and easy to use. Just download the app from the official site(exodus.io) and get straight into creating your wallet.  Exodus stores your Private Keys on the machine you choose and not on any server, providing you with relative peace of mind when it comes to the security of your coins.