Is the whole point of Factom the ability to store hashes on a blockchain?

[Daedelus]

Question in the title 

I feel like I am missing something here..

[justusranvier]

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.

[Daedelus]

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?

[justusranvier]

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.

[Daedelus]

I thought as much 

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

[fartbags]

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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[AlanX]

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.

[fartbags]

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.

[BrianDeery]

Is the whole point of Factom the ability to store hashes on a blockchain?

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 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.

[AlanX]

I also have problems with the factom crowd sale. My complaint is that there's no transparency. Everything is hidden from the public.

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

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

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

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.  

- 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)

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).  

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.

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.

- How much do things cost?

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.

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

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

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.

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

[justusranvier]

Factom proves a negative, which requires examining all possible places where a thing can exist.

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.

[BrianDeery]

A better solution is to approach problems differently such that negative proofs are not needed in the first place

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?

[justusranvier]

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

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.

[Kazimir]

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.

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?

[Daedelus]

A better solution is to approach problems differently such that negative proofs are not needed in the first place

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?

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

[AlanX]

A better solution is to approach problems differently such that negative proofs are not needed in the first place

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?

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.

[justusranvier]

Please note that even justusranvier's solution absolutely fails if it is possible to sell your car via a car title outside the blockchain.

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

[Daedelus]

Still don't follow the distinction.

Let's go back to this:

Factom is attempting to make a publishing platform which is simultaneously censorship and spam resistant

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?

[AlanX]

Please note that even justusranvier's solution absolutely fails if it is possible to sell your car via a car title outside the blockchain.

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

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:

A better solution is to approach problems differently such that negative proofs are not needed in the first place,...

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.

[AlanX]

Still don't follow the distinction.

Let's go back to this:

Factom is attempting to make a publishing platform which is simultaneously censorship and spam resistant

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?

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.