Factom, a new system for leveraging the Bitcoin blockchain for use has released their much anticipated Whitepaper, today. The community has been talking about Bitcoin 2.0 smart contracts for years now; however, many have forgotten that a decentralized/distributed layer for “trust-able” information sources is a necessary prerequisite to smart contracts functioning the way idealists want them to.
Factom melds security, accessibility, and innovation in such a way that will undoubtedly expedite the use of blockchain technology for non-monetary purposes. While the concepts have existed in “unhashed” form for awhile, Factom will be the first large scale project to tackle the problems of centralized record keeping and the associated wasted efficiency. Factom will take any information, organized into a chain, and store a hash of said information into the Bitcoin blockchain, the most secure blockchain in existence, roughly every ten minutes. In this way, any information that previously required centralized control, can instead by secured by decentralized technology, become truly censorship-resistance, and offer verification abilities to all users.
Also read: The Upcoming Decentralization Singularity
Factom’s whitepaper explains (emphasis added):
In today’s global economy trust is in rare supply. This lack of trust requires the devotion of a tremendous amount of resources to audit and verify records reducing global efficiency, return on investment, and prosperity. Moreover, incidents such as the 2010 United States foreclosure crisis demonstrate that in addition to being inefficient, the current processes are also terribly inaccurate and prone to failure. Factom removes the need for blind trust by providing the world with the very first precise, verifiable, and immutable audit trail.
Factom’s whitepaper was penned by contributors CEO Paul Snow, Chief Scientist Brian Deery, CTO Jack Lu, Chairman David Johnston, and President Peter Kirby. Before its release to the public, the Factom team made sure to receive constructive criticism from advisors such as Storj’s Shawn Wilksinson and Rivet’z Steven Sprague as well as reviewers such as Ethereum’s Vitalik Buterin and Bitcoin mining pool operator and dev Luke Dashjr.
CCN Interview With Factom
Factom President Peter Kirby, in an interview with CryptoCoinsNews, expanded on some of the key features of Factom:
Can you explain the double-edged sword that is unsheathed by the use of a minimal ruleset for Permanent entries?
Factom concentrates on recording entries as they are submitted. Factom does not check the entries for validity. This allows Factom to record much more data, and its architecture allows for the organization of the data in a way that allows individual chains to be enumerated independently.
To validate a chain, an application must validate the chain for itself. This is client side validation. As long as all applications using the chain for the same purpose use the same validation rules, client side validation is very powerful and flexible.
Where applications are trying to use the same chain for the same purpose, but are not using the same validation rules, then errors can occur. To combat this, Factom ensures that the creator of a chain gets to create the first entry. This entry can provide documentation on how the chain should be validated. This can even include a link to the audit and validation application, and the hash of that program to validate it.
Protocols like Colored Coins, Mastercoin, and Counterparty already use client side validation. So the technology is already in production. And that technology can run on Factom.
Generally, why do you feel that there is a need for censorship resistance in information sources?
The users of Factom must be assured that they will not be discriminated against. To that end, Factom is designed to expose servers that discriminate, and provides mechanisms to remove them. This is about building an impartial protocol that supports all applications without judgement. At the same time, no system using Factom has to keep any entries or chains that the user finds offensive.
What is one real-world application that you’ve had frustrations with in the past that you feel Factom will help solve? How?
We get frustrated at the difficulty of holding banking and financial corporations responsible for their behavior. In 2008, the industry wrecked the world economy, and we are still reeling from the aftermath. Factom injects honesty, by removing deniability in the business processes that it can document. Certainly mistakes are made, but with Factom, all the records of business processes become immutable. IT has a very real chance of holding individuals accountable for their decisions.
How do you foresee Factom interacting with other Bitcoin blockchain based projects such as Ethereum, Maidsafe, Mastercoin, Colored Coin, etc.?
Some of these protocols, like Mastercoin and Colored Coins, will be modified to run on top of Factom. Others, like Ethereum, may provide insights on how to manage applications on Factom. And projects like Maidsafe and StorJ could very well provide archival services for Factom users.
Factom’s whitepaper is available for download on the front page of their website; needless to say, it’s an advised read. Factom has an FAQ section for those that finish the whitepaper and have more specific questions. In addition, the Factom team will be running a Reddit Ask Me Anything (AMA) on the Bitcoin subreddit at 2PM EST. Most exciting for some is the release of Factom’s API.
What do you think about Factom? Comment below!
Images from Factom and Shutterstock.