Factom is a phenomenal idea that very seriously gets me excited to even begin considering for it’s unique approach to the blockchain. If you read the earlier blog about Ethereum you’re most likely familiar with different groups using blockchain technology in ways outside of the currency mold. We’ve seen plenty of coins, but now excitingly, different applications are coming into existence. Where we saw Ethereum thrive in targeting issues such as two way verification, which has resounding implications for solving issues like secure contracts or sending money, Factom thrives in targeting the way that conglomerates handle data by providing an unalterable records system. Factom is essentially a trustless ledger technology that protects and decentralizes information with a strong focus on maintaining user anonymity. Governments, businesses and even schools can store different forms of data safely with no fear of alteration or loss through use of Factom.
Interestingly enough Factom is a protocol built on top of Bitcoin, on top of the Bitcoin blockchain. As you know, this means that no matter what, Factom can’t be shut down because no singular person runs the network. Instead, it’s operated by millions of people across the world, independently of each other. Though they’re connected there’s ultimately a big difference between the bitcoin blockchain and what’s built on-top of it. The Bitcoin blockchain targets currency and the data it contains in records of monetary transactions, whereas applications that you could instead see come into use through Factom are voting systems, legal applications, medical records and more.
“Well this sounds great, but I’m here to make money. So how exactly do you trade Factom…”
I’ll again harken to the parallel of Ethereum and Ether. As Ether was the fuel for Ethereum you can think of Factoids as being the underlying motor for Factom. It allows the users to upload or “hash” data into the network and works as something of an anti-spam net. When you purchase Factoids, or FCT, you can then trade them for entry tokens which allow you to hash. So as you can probably put together, the more applications that are designed using Factom, the more factoids become worth.
A user on Bitcointalk summarized another reason for the potential explosion of Factom as: “The problems that Factom promises to solve, with it’s focus on data, are more pressuring for more people in the present, than the problems of the financial systems [which BTC is solving]. That could change any time (financial crisis could become very intense at any time), but for now I believe it’s true. And a lot problems of the financial systems also are connected to data.”
The fact of the matter is that Factom solves more issues and has more potential than any other system outside of Ethereum in our opinion. It’s one of the strongest real world applicatives and we’re already seeing it manifest around us. Factom has been looked at for usage in smart cities, and even storing movie scripts and reels privately. It’s on the upswing right now and we have faith that this is just the beginning. The potential use cases for Factom add up to trillions and we genuinely believe it has the potential to shape the world.
“Okay, but what’s the catch?”
Downsides of Factom you ask? There’s not many. It’s built on-top of a tried and true foundation. It’s not a true currency in the vein of Bitcoin or Zcash, so there’s almost no immediate risk towards being hacked and at that, Factoids have such low value currently that there’s almost no benefit towards putting in the work to crack the system. In our opinion the potential downsides that manifest down the road are nothing in comparison the potential upside that you may experience through investing. Contextually speaking, if we look at the patterns of the most successful traders, the majority focus on the potential upside that a stock or bond may have, not the potential risk… and the heights we’re looking towards with Factom vastly overshadow the risk.
One example is Tim Draper, a well known venture capitalist with a proven interest in blockchain technology is an early stage investor in Factom. He stated:
“Centralized data is prone to critical failure by any individual mistake, whether by user error or malicious hacking. By decentralizing data through the blockchain, Factom avoids critical failures due to user error or hacker.”
All in all, Factom is an idea that we have a good tingling feeling about. Our spidey-senses are telling us that this is a technology the world doesn’t know it needs yet, but as cryptocurrencies gain more and more momentum, Factom will be a group that has already laid the foundation and network to capitalize on a building awareness. We strongly feel that this is an idea sitting at the ground floor that won’t be there much longer, so take your chance now and capitalize on it while it’s still low value!