“Honesty is subversive” – Paul Snow
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.
In the past, records have been difficult to protect, challenging to synchronize, and impossible to truly verify because of the manual effort involved. Computers automated some of these tasks, but they are even harder to protect, synchronize, and verify because computer records are so easy to change. Authority is fragmented across innumerable independent systems.
Blockchains provide a distributed mechanism to lock in data, making data verifiable and independently auditable. Bitcoin’s blockchain is the most trusted immutable data store in existence; however, it is not very useful for non-Bitcoin transactions. Factom gives businesses access to blockchain technology without getting bogged down in currencies.
In this paper, we describe how Factom creates a distributed, autonomous protocol to cost effectively separate the Bitcoin blockchain from the Bitcoin cryptocurrency. We discuss client-defined Chains of Entries, client-side validation of Entries, a distributed consensus algorithm for recording Entries, and a blockchain anchoring approach for security.