Factom Community Elects Niels Klomp
On April 18th, I spoke to Niels Klomp regarding his involvement with the Factom community, protocol and blockchain. Briefly, the purpose of the protocol and platform is to provide document authentication and verification solutions. Niels, who is the CTO of Sphereon, a startup that uses Factom to provide various digital document related services, had a lot of pertinent technical information to share with me.
The tech-savvy entrepreneur first explained to me that he is a democratically elected, third-party representative of the active community behind the development of the Factom protocol. So, Niels is not part of the currently private Factom company itself. Interestingly, he is only among 1 out of 5 people elected by this crypto-platform’s community. Niels also informed me that one of the main goals that they want to achieve is full and complete decentralization.
M3 – Full Decentralization
In order to achieve this target, the experienced software developer and system administrator said that the Factom community has set up a few milestones. I won’t go into the details of every single milestone that has been completed. However, I will tell you what Niels told me. He mentioned that the community’s next major goal is to achieve Milestone 3 (M3). Primarily, this milestone aims to move the crypto-platform as close to full decentralization as possible.
Niels, who was recently appointed (2 weeks ago) as a Factom community leader, says that he was chosen for the role based on his high technical expertise, business knowledge and acumen, and organizational skills. Among the five individuals selected by this platform’s community is one of the founders of Factom as well, according to Niels.
Okay, so now that I have covered the important background information, let’s delve into the more technical aspects of the Factom protocol.
Proof of Authenticity
The blockchain-based Factom protocol presently has approximately 15 GB of data. Of course, that’s not a lot. One of the reasons for this is that the platform’s blockchain itself is not used to store the actual data. Instead, it serves as a means to provide proof of authenticity of documents. These documents can be almost anything, including legal, escrow or even mortgage related information.
So, if a document has Factom’s official “seal of approval”, then users can be rest assured that its contents are original. What I mean by original here is that the person or entity that is listed as the document’s author is really/actually the author. Furthermore, the authenticity system guarantees that the document’s contents have not been tampered with or corrupted in any way by third-parties.
According to Niels, the Factom community has decided that they will appoint 65 nodes/servers to manage the essential functions of the crypto-platform. These nodes have been categorized, as Niels broke down for me, into Federated Nodes, Auth (Authentication) Nodes, and Follower Nodes. Although our interview did not allow for us to go into the intricacies of how these Nodes function together, the main concepts were covered quite clearly.
The Sphereon CTO noted that the Federated and Auth Nodes would work towards making the Factom platform fully decentralized. The achievement of this goal, as mentioned previously, is referred to as M3 (Milestone 3). Currently, the Federated and Auth Nodes are operating in a more centralized manner. Ideally, the Factom community hopes to transition to a decentralized model in the foreseeable future.
Entry Credits and Factoids
Alright, so what about other details such as the monetary aspect of the Factom protocol? Well, the Sphereon CTO whose company offers a number of different services such as document processing, extraction, and conversion pointed out that users of the platform can choose between using non-transferable earned credits or the network’s Factoid cryptocurrency.
Earned credits are a monetary mechanism which are, according to Niels, pegged to the US Dollar. Therefore, they serve as an alternative monetary option for companies who might not want to or not be able to use cryptos due to regulatory restrictions. So, basically you purchase earned credits with fiat currency and then use them to pay for services provided by the Factom protocol.
Another monetary option, as mentioned, is to use the Factoid cryptocurrency, which is intimately tied to the usage of the the Factom protocol/blockchain/network. Theoretically, as usage of the platform increases, so should the value of each Factoid. Also, Factoids can be and are burned, so that they are removed from existence when converted to Entry Credits. Additionally, a set/fixed number of Factoids are created at periodic intervals by the Federated and Auth Nodes.
Compensation for Services
Organizations or entities that choose to and qualify to serve as Auth/Federation/Follower Nodes will be rewarded with the Factoid cryptocurrency. The exact distribution of these Factoids will not be covered in this article. However, as Niels conveyed to me, a percentage of the Factoids will go toward funding the future growth and development of the Factom platform.
This concept of Nodes and Elections is not exactly new to the crypto-community. On the Komodo Platform, the Komodo Pioneers group has a similar idea/concept of how they want to grow and develop their network/blockchain/platform. But let me clear though, I am not stating here that both platforms are using the exact same development strategy. It just appears that there some similarities between the two.
So apparently, this might be a legitimate a viable strategy or game plan to use in order to not only grow a crypto-platform, but also to create a vibrant, competent and motivated community behind it.
Now, let’s get back to the Factom Protocol, as it was explained to me by Niels Klomp.
Using the Bitcoin Blockchain
While Factom’s blockchain is fully functional and independent, it does currently rely on the Bitcoin blockchain to provide an added layer of security for its data. As mentioned previously, the Factom blockchain does not store the actual data. Instead, it stores the information/data necessary to prove the authenticity of documents.
You can think of it as somewhat serving as a set of indices or pointers that link to the actual documents. These links contain the verification/authentication information that proves the genuineness of the documents they link to. This authentication data is copied over to the Bitcoin blockchain to ensure that the data is not corrupted.
A Work in Progress
This does not imply that the Factom blockchain is not secure. It is only one of many blockchain platforms that rely on the Bitcoin blockchain for added security. That’s because the Bitcoin blockchain is the most established, has never been hacked, and has a long record on its ledger of successfully completing more transactions than any other cryptocurrency platform. This is another solid reason why Bitcoin is not going to go away.
While the Factom blockchain might have been built on solid technology, it needs to stand the test of time and prove its worth in the CryptoSphere. Notably, when I asked Niels Klomp if the Factom Blockhain can switch to a different blockchain, other than Bitcoin, for backups, he said that it’s something they are currently working on. This, in my opinion, shows Niels’ honesty and truthfulness about the current stage and state of development.
Realistic Outlook and Expectations
As most crypto watchers are aware, there are numerous so called “crypto businesses” that make the most outrageous claims, and yet, manage to suck and exit with lots of money. So, the best thing to do is do your research and consult a professional to help you make informed decisions.
Anyway, I have digressed a bit here. Let me get back to covering more of the technical aspects of the Factom protocol and blockchain. Niels made it very clear to me that not all the data from the Factom blockchain is stored onto the Bitcoin blockchain. Rather, certain pertinent bits of data are copied over to the flagship cryptocurrency’s ledger every 10 minutes. If you do the math, that’s 6 entries per hour, and a total of 144 entries per day.
Complicated Concepts to Grasp
Partly due to the time limitations of our interview, I was unable to gather all the details regarding the ongoing development and present implementation of the Factom protocol. However, to be able to accurately convey and cover all the technical information would require more than 1 article. Therefore, you can look forward to more articles on this unique platform from us in the future.
Before I end this article, let’s cover a few more things. Assume that a malicious entity attempts to provide fake credentials so that they can gain unauthorized access to a any particular document stored on this crypto-platform. Quite simply, due to cryptographic security, the hash function that is executed after credentials are provided will simply not compute something which corresponds to validate the fictitious credentials provided. This way, access will be denied to unauthorized users. That, I believe, is the beauty of cryptography and mathematics.
As Niels remarked, the full technical details and aspects of the Factom protocol are quite complex and even very challenging to understand. That’s why he has taken on the role to educate as many people as possible to clarify and develop a better understanding of this platform. Although not going into the details of it, the Factom Community leader did say that there are a number of sophisticated data structures that make up the underlying foundation of the codebase on which the Factom protocol is built. He even said that there are even certain concepts and elements from Game Theory and Economics that have been incorporated into this crypto-technology.
From the business point of view, the Factom organization has managed to form strategic partnerships for ongoing projects with a number of big name companies. However, due to the NDAs (Non-Disclosure Agreements) that the company has understandably signed, the names of these big players will not be made public at this point. Presumably, once these collaborative projects have matured and achieved some level of success, then these companies might look into making an official announcement regarding their partnership and business relations with Factom.
Even though I have not covered everything we discussed during our interview, I will save it for a future article that you will be able to read here, exclusively at Crypto Core Media. Have a great day, and thank you for reading my article.