Bitcoin Forum

Question in the title  :D

I feel like I am missing something here..

The point of Factom is to profit from a Factoid pump-n-dump.

The rest is handwaving and obfuscation.

There are much better ways to do proof of existence and if the Factom team cared about building a quality product instead of executing a P&D they would have used those instead.

Can you define proof of existence? Is it storage of small bits of data on the blockchain?

Include a particular hash in a transaction that gets mined in a block.

This constitutes proof that the data which produced the hash existed at the time the block was mined.

The proof is as strong as the blockchain is difficult to retroactively rewrite.

I thought as much  ;D

What use cases do they plan to have for this in Bitcoin?

Yes, I believe that's all factom does. This is a huge innovation that will have many benefits. It costs BTC to insert data on the blockchain. factom reduces costs of this.

Of course the ICO was over priced. They did not need that much money to build factom. I bought some factom just in case. I will hold mine for 10 years. If bitcoin goes up a lot then factom should as well.






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A side note on user creation for open source software:

I see DAOs taking off huge and DAO + DApp combinations being the best investments (You invest in a DApp then invest in a DAO to create users for the DApp). A DApp like ethereum or Bitcoin will be weak without DAOs supporting it. Watch more here: 47 minute LIVE interview (https://www.youtube.com/watch?v=a6ZwGImvtkM)

The point of Factom is to create a place where users (mostly applications) can place data in an organized list or set of lists, and secure that data against the Bitcoin blockchain.

Factom does not push all of this data into the Bitcoin Blockchain, but rather combines all of the data provided to all lists into a Merkle Root and places that root into the Bitcoin blockchain every 10 minutes.

Factom will use a set of Federated Servers (elected by the users of the protocol, i.e. Delegated Proof of Stake) to collect this data and create the hash placed into the blockchain.  Factom is also set up to separate the accounting and overhead of the protocol from the data recorded in these lists.  So applications that mostly need to read data do not have to wade through the tokens and Entry Credit data to access their application data.

So to the question about placing hashes on a blockchain.... Yes, mostly data held externally will be secured in Factom using hashes placed in some Factom Chains.   You are not limited to hashes, and more small data (like asset trading) the data might be inserted directly into Factom.

Proof of Existence is only part of securing business processes.  What is also needed is uniqueness, sequence and membership.  You need to also be able to assert where records will be secured.  The order in which they are entered.  And proof of what has NOT been entered.  And of course, proof of existence (timestamp and hash) of a document's existence at some point in time.

Now  justusranvier is a big critic of the project, and a very idealistic individual.  We used a token to create a system that will stand on its own and provide incentives for running the servers necessary to support the protocol.  I believe his central complaints with our project is that we use a token to decentralize the protocol, and that we have used a token sale to provide the initial distribution of the tokens and to fund the development.   I have always been open to any review of our design by Justusranvier and suggestions for how to improve (simplify) our project.

I also have problems with the factom crowd sale. My complaint is that there's no transparency. Everything is hidden from the public. For example, the following questions can never be answered:

- Is there corruption? This is the basic question that can't be answered.

- Did an investor invest BTC, then get all their BTC back and also get the factom tokens?

- Were media outlets given FREE factom tokens to promote the idea? (This 100% for sure happened. I was contacted to promote GEMZ and factom in exchange for free tokens)

Do you ever wonder how a crowd sale could drop below the initial value? This is how. No one knows what % of factom tokens have been given away for free marketing, making them = 0 BTC each.

- How much do things cost?

- Were BTC just taken out of the system to buy a new car.



Transparency can help build out a better system for businesses. I don't support factom even though I bought the crowd sale. I would support someone else taking the open source code and building a better transparent system to make sure scamming doesn't happen.




A message to anyone trying to do a crowd sale:
Transparency first! Be honest and help build a better business model for everyone to use.

No.  Proving a positive by putting a hash in the Bitcoin blockchain is indeed a trivial problem which requires very little overhead.  Proof of existence is proving a positive.  Factom proves a negative, which requires examining all possible places where a thing can exist.

Satoshi solved a very tricky problem, which was the doublespend problem.  Doublespend is a subset of proving a negative.  The miners must prove to each other that Bitcoins have not been spent before.  To do that, they need to know about all Bitcoin transactions ever. 

Lets take the counterparty project as an example.  It rides on top of Bitcoin.  A counterparty wallet must download the entire Bitcoin blockchain to see if the asset sent to it was doublespent.  It proves the negative of a doublespend by looking at all of Bitcoin, all of mastercoin, all of proofofexistence.com, and all Bitcoin value transactions too.  This is not scalable.

Factom is attempting to make a publishing platform which is simultaneously censorship and spam resistant. This is what makes Bitcoin magical, and what Factom is trying to accomplish.

Last Summer, I went down the road of building such a system but everything I came up with was susceptible to either one or the other.  I gave the packaging entities the glorious name **Compaction Service Providers** (CSP) and even wrote about it here: https://github.com/FactomProject/FactomDocs/commit/2791c51917e3ecc65dc52bfc434ca6dec0b3a1fd (https://github.com/FactomProject/FactomDocs/commit/2791c51917e3ecc65dc52bfc434ca6dec0b3a1fd) back when we were Notarychains.  With free entry of CSPs, censorship would be limited, but the entire system would get spammed quickly, and there would not be a good way to accurately locate the data you needed.  Without free entry, once a specific CSP was selected by an application, the CSP could selectively censor within that network.  Lock in effects would be strong, so switching the entire application base over to a new CSP would be expensive.


Factom is a system that generalized the proof of the negative, and makes it scalable.  To prove a negative, you only need to scan through things in your application's small corner of Factom.  It is general enough to prove a negative for general business processes, rather than just value transfers.

Factom is open source, we use Github for open development.  So quite clearly "Everything" isn't hidden from the public.


Wow.  I really wish there was a technology that prevents any corruption.  So I'll give you this one.


No factoids are issued to anyone until the Genesis block is posted with the first server.  So no, nobody got their Bitcoin back and their Factom tokens.  On the other hand, most people who think they are investing want their investment plus a return.  


Are people allowed to participate in the contributor pool for Factom?  For promoting Factom?  Yes.  People also are getting to code to participate, provide management to participate and more.   The Contributor pool is 30% of the crowd sale initial distribution.  There are roughly 70 people who are contributing.  The pre-purchase pool is 20%.  

The inflation rate will be a fixed 10% of the initial distribution forever.  However, the tokens used to write to the protocol, and the transaction fees, they are all burned (i.e. the exit the token supply).  All of our models suggest that the tokens that flow into the system will match in value the tokens leaving the system.  This gives a value to the token if the protocol itself is valuable.

All of these distributions will be documented in the Genesis block for Factom (Not who gets the tokens, but how many are distributed to various addresses).  


Well, no, we will not break out how much went for marketing vs programming vs management.  But how many is pretty clear.  20% of however many tokens are sold in distributed after the token sale.


What exactly do you want to know?  How much we spend on pencils? marketing?  computers?  rent?  travel?  Certainly the project has expenses, but we haven't been outrageous in our spending.


No.  That is why Koinify is involved.  We do not have access to any of the funds until we deliver on our milestones.


Thanks for your support, and please reach out to us if you feel we are not being transparent enough.  Seriously, we go so far as to open our offices to a Bitcoin meetup every Tuesday at 7:00pm.  We talk about Bitcoin, what we are doing, what else is going on in the space.  If anyone wants, we can skype or google them in.

We are being as transparent as we can be.

Updated the information about percentages of the initial distribution

A better solution is to approach problems differently such that negative proofs are not needed in the first place, but of course taking that approach means one less justification for an appcoin so it's understandable the team did not take that approach.

Huh?  Proof of the negative is fundamental to ownership.

I must prove that I haven't sold my car previously before before selling it to someone else.

Bitcoin itself is completely setup around proving a negative.  It is all about the Unspent Transaction Output Set.  Unspent = proven that spending hasn't happened yet.

How can you hand wave and say that in all cases for all things proving a negative is not needed, and just be more creative?

I could attach the hash of my car title to a colored coin, and my ability to move the colored coin on the blockchain would prove that I have the right to sell it.

Out of curiosity: if you purchased factoids as an investment and only expect them to go up when Bitcoin will go up, then why didn't you just keep the bitcoins?

A strange concept/wording. I thought logic dictated you couldn't prove a negative. I would interpret unspent = proof of ownership (proving a positive)

Ownership always entails that you can prove (to some standard) you have not sold your property.  In fact, the solution justusranvier suggests (of using a colored coin to track ownership) does exactly that, by leveraging the unspent transaction outputs (UTXO) of Bitcoin to prove you have not sold your car.

The statement "You cannot prove the negative" does not mean you cannot prove the negative in any context.  It means you cannot prove the negative in an unbounded context.  

You absolutely can prove the negative in a bounded context.  The bitcoin blockchain defines such a context were the negative is routinely proven.  You can prove the negative in a particular Factom chain.  You can prove the negative in a particular registry or ledger or database.  If you restrict your search space, you can prove the negative within that space.  Business processes always require some restrictions of spaces so that the negative can be proven, to an accepted degree of certainty.

Please note that even justusranvier's solution absolutely fails if it is possible to sell your car via a car title outside the blockchain.  In other words, the blockchain cannot exclude transactions outside the blockchain that may take precedence over a colored coin.  If the government seizes your car, they can absolutely own it regardless of what the blockchain says.  The only reason the government cannot simply seize your Bitcoin at will is because Bitcoin does not exist outside of the blockchain.

Just like how Factom fails if it's possible to sell your car via a car title outside Factom?

Still don't follow the distinction.

Let's go back to this:


So you don't want people to be able to censor the valuable stuff but at the same time you don't want it clogged up with garbage. What is the size of the payload that can be published? I understand it could be large and you just publish the hash of the large data but out of interest, what is the max size?

Let's stay on topic.  The need is to prove the negative.  You cannot prove the negative outside a bounded context, but you can do so within a bounded context.  

Neither Factom nor Colored Coins nor Bitcoin nor any other ledger can change this.

The bounded context can be defined by a colored coin.  Only with physical assets, actions can be taken outside colored coins.

The bounded context can be defined by Factom.  Only with physical assets, actions can be taken outside of Factom.

Since Factom is really a publishing vehicle for an application that can define this context for people using the application, we can manage not just information within Factom, but can use various trusted parties to report on the real world, which can be integrated into managing assets in ways that are not as natural (but certainly possible) with colored coins.

Factom is designed to create audits around business processes.  Applications can Track actions and decisions in a ledger, can provide validation for outside parties, demonstrate that data has not be altered, back dated, or deleted.   Where parties agree to document their processes using Factom, proving the negative (i.e. a notice was not sent for example) can be done.

The bottom line:  Your you made the following assertion:
And the observation is that this simply makes no sense.  Kinda like wishing pi = 3.  It is something you can say, but it doesn't make it possible.

Factom organizes data into various "Factom Chains".  You can create a Factom Chain and put your entries into that chain.  You find chains using the Directory Blocks, which act like a Micro Chain (that allows you to find your chains and your entries, and skip over chains you are not interested in).

Each entry is limited to 10K or less.  You need to use an Entry Credit for each 1K you write into an entry (about .1 cents per 1K, or a penny for 10K).

So anyone can write anything they want into Factom.  Applications using Factom will not necessarily care to download or access that information.

The whitepaper and the consensus paper (you can find at Factom.org) will help you dig through this.

I thought that you can do that with maidsafe,
isn't maidsafe able to do almost everything that factom do?

Some speculate solely on Bitcoin and despises speculation on any alternative blockchains. They even morally look down at others over this!

Bitcoin has many issues to become so generalized.  The very fact that Justus wants BTC to be a store of value while also believing BTC to be a the blockchain data store speaks to the extremism in his view.

People who have approached this technology with an open mind come to it with vastly different opinions.

Congratulations on learning how to use scary words like "extremism".

Perhaps someday you can graduate to adjectives and maybe eventually even syllogisms.

That is a complicated way of saying that you were conflating two independent issues under the term "negative proof":

1. Can a user trust real-world entities to honour the promises represented by a digital token.
2. Can a user trust that a particular digital token is valid with respect to other digital tokens.

The first issue is not a problem that can be solved by software and in that case both Factom and colored coins are on the same solution. Since it's completely outside the scope of the conversation that's not what I was talking about when I said redesign problems to remove the need for negative proofs.

The second issue is one that can be solved by creating a system the proves that no conflicting digital tokens exist compared to a particular token of interest, but they can also be solved in much easier ways such as having the holder of the token produce a positive proof of ownership.

The second way is easier to implement and more robust, and the former is overly complicated unless the actual goal is to produce straw justifications for an appcoin.

You claimed the existence of designs that avoid negative proofs. "A better solution is to approach problems differently such that negative proofs are not needed in the first place,..."

Your words, not mine.

In no way was I "conflating two independent issues".    Issues are the things for which you find a solution.  Your two points are two ways to deal with the need for negative proofs and enforcing them.  There are others:  

1.  A user can trust real-world entities to honour the promises represented by digital statements provided by those entitites

2.  A user can trust real-world entities to enforce the promises represented by documents between the user and other parties

3.  A user can trust real-world entities to record and secure agreements for presentation to enforcement entities if necessary at the time these agreements should be executed.

And there are more. Maybe an infinite number of them.

All of these (and your suggestions) revolve around the idea that you can establish one way or another both positive proofs (that agreements have been made, services performed, goods delivered, etc.) and negative proofs (parties held rights to goods (no double spend), services were not performed, goods were not delivered, agreements were not made, etc.).

We can talk about the philosophical nature of the issues, or we can talk about solutions to the issues that beset us.  I was not talking about our particular solution, but rather trying to address your assertion that there was no issue at all.  



There is no holy one way to address all the situations that people may find themselves in.  Colored Coins are great solutions for some problems.  They do not solve every problem.  Factom is a really great solution for some problems.  Factom does not solve all problems.

I am not sure why you think the existence of an AppCoin is so evil.  But I'd be totally willing to discuss the design of Factom, and why we have a token if you like.  I do not care to try and stigmatize anyone for disagreeing with our design.  Perhaps some dialog would actually be helpful.

Maidsafe doesn't timestamp, order, or create chains of data.  You might be able to do with Maidsafe what you can do with Factom in some fashion, but it would be easier to put your data in Maidsafe and timestamp it in Factom.

Since this conversation appears to be at an end, let me give a more thoughtful response to this post.


The scope of discussion is about "proof of the negative".  You can do so within a restricted context.  Like digital coins.  It is harder (as in case 1. above) when you want to actually be useful in the real world.


"Positive proof of ownership" can only exist within some context where other ownership can be excluded.  If the party can transfer ownership, then there was a state where some set of data proves their ownership.  But that data can never be taken away from the owner.  So clearly there must be some way to add data, to allow transfer of ownership to someone else.  

You can't get rid of the previous data, you can only amend it in some way.  Every technology based on ledgers does this.  Bitcoin, databases, double entry accounting, the DMV, ... everyone.   And ownership then is proven by eliminating the possibility that someone else owns the token.

Unless you have invented something like Harry Potter's Map, that no matter who holds the data, it is updated as the state of Hogwarts changes...


The injection of appcoins in this discussion is the staw argument.  Not even in Factom does the appcoin have anything to do with proving the negative.  It provides an incentive to maintain a ledger.  Just as Bitcoin's token provides an incentive to maintain a ledger.

It is the ledger that allows a proof of the negative.