One of the most striking projects that has emerged across the range of blockchain applications is Factom. This firm has introduced a new decentralized protocol built as a layer on the bitcoin network, which increases the potential of distributed ledger technology by the following: the transaction system does not work with cryptocoins, but with mass storage of data. In Factom, it is space that counts.
Created as an open source project by Peter Kirby and his team, established in Austin, Texas, Factom comes from the Latin factum, which means "True Fact." By the way, he attributes his creation to the fact that institutions are losing credibility, and people's confidence in them is diminishing.
In the blockchain, the digitally stored data is protected, synchronized and verifiable, unalterable and indestructible, since it does not depend on a single organism for its integrity, but for the whole network of users. Factom created a network from bitcoin, a blockchain protocol that supports the homonymous cryptocoin, but that has not been very useful for non-monetary applications, since the size of the block is very small for mass storage purposes and its very long time of transaction confirmation.
This makes Factom an ideal network for voting systems, medical records, financial statements, real estate titles or identity management, something that in its white paper qualifies as its biggest goal; which emanates from various human rights, such as privacy, personal security and property in all its forms.
Factom allows users to subscribe their data to the network. This information is encoded in hash functions, or in other words, the block address in a unique serial number, which in turn can be deposited in a larger block together with others previously generated by the user.
The correct protection and immutability of data are characteristics that other nodes (users or computers) can validate without having to access the contents of all the blocks. However, Factom clarifies that they do not have the authority to certify the data as authentic before they enter the blockchain, since this is a task that depends on larger instances such as government supervisory agencies that approve the data before being subscribed on the platform. From this signature, they can only certify its existence and origin.
The validation and creation of blocks occurs using a mechanism similar to Proof-Of-Stake, although much of the security responsibility is left to the bitcoin network. To do this they make a division of the network between transactional processing and consensus, which in this case is assumed by Factom through the federated nodes chosen by users with the entry credits, which are nothing more than non-tradable currencies.
Users should convert their bitcoins into factoids to join the network. In turn, these factoids must be deposited in a portfolio specifically designed to perform the participation and mining test. With this cryptocoin can also be made purchase and sale of space in the network, but are not allowed to make votes, but once they have been converted into incoming credits, which are non-transferable, is delegated to a federated node for the taking of decisions. This allows real users of the system to make decisions, not those who are only potential users but not active.
The data entries are subscribed to the Factom network by the users, in a coded way under a hash address chosen at random by the system core, guaranteeing its protection and privacy. Once this address is registered in the blockchain, Factom guarantees its proof of publication, so if the same document is submitted again in the future, the generated hash addresses must be the same.
The network is kept secure and managed by the nodes, which are rewarded with factoids, the native cryptocoin of Factom, with which credits can be purchased to store the information and data desired on the network.
Factom distributes the tasks among the miners of the bitcoin network in two phases: to register the entries in order and to audit them. Initially the Factom servers accept the registration of an entry, organize it in blocks and place in order. After 10 minutes this transaction becomes irreversible by means of collecting all the data about it, issuing a hash and inserting it into bitcoin's network.
Entries are audited separately in another process. After entering, the entry is verified by an auditor, who adds another entry with the data of the validation by signing it cryptographically. This firm must publicly attest that all phases were successfully approved. Such a process does not need the trust of the network to run, being similar to bitcoin. In Factom, you can create a small chain ecosystem where customers and applications quickly approve data. This could be done if the application understands the stipulated rules for a string, where invalid entries do not cause major interrupts, being ignored.
Factom has received the support of important institutions and business organizations to achieve this project, which could be considered one of the most important to be applied in the field of data storage.