Thanks a lot for explanations through the last 3 pages.
I still view Factom only as a "sugar" that may attract customers without technical knowledge, but the same can be (and it already was partly) done around Bitcoin.
If "it is the same as with Bitcoin", how can you ensure the price for storing hashes is going to stay the same 0.01$, if the space in the blockchain is scarce ?
And why go through all the hassle through BTC-FCT-Factoid-EC if I just can use my BTC directly to store my hashes into Bitcoin blockchain ?
Sorry, too many questions
A good simple use case would be a will. In court, Factom can prove that the will in question is correct and not been altered and latest copy.
Factom is like a factual authority beyond question. Factom creates fingerprints of objects like a passport and stores that fingerprint on its blockchain. After Factom gets to say a 100 different passports fingerprints it then creates another fingerprint of that stack and files that stack away by locking it into bitcoins block chain. Now customs scans passport's linked to the factom blockchain to check to see if that passport is valid and not altered.
These are just a few use cases, basically any legal document, contract, any financial documents, titles of ownership, inter company documents, these are just a few off the top of my head.
In factom , you have factoids and also have entry credits. Entry credits are like Ethereum gas.
Entry Credis are not a tradable token, large institutions who are forbidden from using cryptocurrency can use Factom. All they need is an EC key, which can be refilled by outsiders taking credit cards or PO orders. The outsiders would handle the vagaries of the market and all the regulatory uncertainty which might be involved.
purchased entry credits, factoids are removed from circulation. These factoids are not recaptured by the servers, and are gone forever.
I think these re-post might answer your questions.
Adding entries to Bitcoin blockchain directly is very expensive
Prices for Bitcoin transactions are not stable. Cost for adding 1kb data to factom is.
You can't create custom chains on Bitcoin
To store data on Bitcoin blockchain you need to own Bitcoin and handle all the bookkeeping and legal stuff involved with having cryptos, which is a nogo for many companies. At Factom you buy EntryCredits which can't be traded and in the background Factoids get burned. That's a perfect abstraction layer to allow companies using a blockchain without dealing with cryptos.
Factom the hashes, and hashes are data, are stored forever - in Factom and the Bitcoin-Blockchain. But the data that is hashed is not stored by Factom. It has to be that way, because nobody would want to store personal data, like medical records, on a blockchain.
The sense is: Let's say a bank hashes transactions and places the hashes into Factom and Factom into the Bitcoin-Blockchain ---> one year or five years later the bank has proof that nothing was altered or deleted. If there would be a hash in Factom but the file is missing, it would reveal that data was deleted. If there is a file that doesn't match to the hash it was altered etc. Plus: It's also about organizing data and we talk about "big-data" here.
And Factom also can be used to hash access to data. Let's say you work for a bank and you log into your account - Factom can record that as hash (depends on the application, on how the bank uses Factom). And let's say you open a file and change it --> Entry into Factom. So it's not just about the data and hashes but also about responsibility. It makes it much harder to mess with data once it's recorded as hashes. And that is more powerful than most people think because it's not just about objective aspects like:
- Proof of Existence: a document existed in this form at a certain time.
- Proof of Process: a document existed and is linked to this new updated document.
- Proof of Audit: an updated document can be verified to have changed according to a set of rules.
...but also about the way people think and act. That's why it's called "honesty-system". It doesn't prevent dishonest behaviour, it doesn't make it impossible to manipulate or delete data. But Factom would reveal it.
To understand how powerful that is it needs some knowledge about how it's handled today and how much manipulation is going on everywhere on this world with data.
The actual data is stored by the companies as it is currently in their datacenters. With factom they create a merkle tree of this data or hashes of each file (as they like and dependent on use case) and store it in the factom blockchain. If they do it in regular intervals, they have a proofable hashed history of their data. This can be used to either check the integrity of the current data, or to audit the status of data back in history.
