One of the first applications of blockchain technology is Bitcoin - a decentralised digital currency secured with the help of cryptography. However, developers and blockchain enthusiasts soon realised the massive potential behind blockchain and started using this revolutionary technology in ways outside the realm of currency world. One of the first projects to do this was Ethereum and in many ways, it set the precedent for others to utilise blockchain for real-world applications. One project that has been doing this remarkably well is Factom.
What is Factom?
Factom is among the first projects that uses blockchain technology to address real-world business problems. It does this by providing organisations with a way to store data in an unalterable records system. Factom’s distributed ledger technology, or blockchain, has been designed in such a way that it can store real-time records in the chain, thus making this data immutable. Furthermore, once the data is on the blockchain, it cannot be deleted. You can think of it to be a record verification and auditing infrastructure based on blockchain. In a way, Factom has changed the way we authenticate documents.
Factom is essentially a decentralised, distributed protocol developed on top of Bitcoin blockchain. The network is distributed on servers distributed across the world, all of which are independent of each other. As a result, it is practically impossible to shut down the Factom network. It also boosts accountability and creates a business system that can’t be altered. While Bitcoin serves as a decentralised currency and stores all monetary transactions on its blockchain, Factom can be utilised to store important information like voting records, medical records, legal documents, audit records, et cetera, on its blockchain.
Factom works on the principle of cryptographic hash function. Simply put, it is a function that takes any digital file - documents, audios, or videos - and converts it into a fixed alphanumeric string. This alphanumeric string is unique for every digital file, sort of like a digital fingerprint. Once these hashes are created for digital files are created, they are collected and combined into a single hash. This single hash is then entered into the Bitcoin Blockchain, thus making it immutable.
Anyone can take a digital file, hash it and then compare it against the original file. If both alphanumeric strings match, then the file is original and it hasn’t been altered. On the other hand, if hashes don’t match, then the file has been tampered with.
The underlying currency of the Factom network is known as Factoid, or FCT for short. It is the fuel that runs the network and is required by those who are looking to utilise its services. Factoids are used to buy Entry Credits - tokens that allow you to enter your data into the Factom protocol. Unlike Factoids, Entry Credits cannot be traded.
For the time being, the total supply of Factoid tokens is capped at 8,753,219. According to the developers of Factom, new Factoids will not be issued until the Factom protocol is deployed completely.
Where to buy Factoids (FCT)?
Factoids are available for purchase on the following cryptocurrency exchanges - Poloniex, Bittrex, Shapeshift, Changelly, Coincheck, Bitmex, et cetera. It is important to remember that Factoid is an altcoin and as a result, you may have to trade it against either Bitcoin or Ether instead of buying them directly with fiat currencies.
Wallets designed with the sole purpose of storing Factoid tokens can be found on the official website of Factom. Alternately, you can also look at other options to store FCT like Jaxx, Exodus, et cetera. However, the safest way to store your cryptocurrencies is in hardware wallets like Nano Ledger S or Trezor.
Factoid Cryptocurrency Mining
It is not possible to mine Factoid tokens directly.
FCT Token Price Trends
At the time of writing this article, 1 FCT token is worth approximately 28.9 USD. The token has already exhibited a couple of bull runs, quite similar to other cryptocurrencies. The first run came in May 2017, when the price moved up from around $7 to $30 in a little over a month. This four-fold increase in value was soon followed by a drop that took the price down to less than $15. In December however, the price soared to reach new heights, driven primarily by the growing speculation in the cryptocurrency space. The price moved up from around $20 to $75 in a matter of weeks.
This tremendous spike in price was immediately followed by a dramatic nosedive wherein the coin shed all of its recent gains. By mid-February, Factoid tokens were being traded at around $35.
Risks associated with investing in Factoids
Factoid, being a cryptocurrency, can be considered to be a rather volatile asset. Not only is it subject to regulatory complications, but being a relatively new asset class, it is undergoing a great deal of fluctuation in its prices.
Therefore, it is recommended that you invest in other investments like mutual funds, which are relatively safer, legal, and can generate decent returns in the long-run, if chosen wisely.