Quote from: BitcoinSanDiego on March 26, 2015, 12:15:26 AM

Quote from: mortified on March 25, 2015, 08:43:24 AM

Quote from: BitcoinSanDiego on March 25, 2015, 05:07:23 AM

Quote from: mortified on March 17, 2015, 09:05:31 AM

I'm still not clear why factoids are not considered cryptocurrencies and why bitcoins or off-chain Bitcoin contracts cannot be used instead.

Reading through the white-paper cleared up a lot of questions I had.

Basically, the Bitcoin blockchain simply can't handle very large data entries - so the Factom P2P network and blockchain handles larger entries which are then hashed into the Bitcoin blockchain. So, Factom is a layer on top of the Bitcoin blockchain. The two chains become intertwined which strengthens both of them. Factoids are tokens that are spent in the process of entering information into Factom. They serve as anti-spam and they also serve as a way to reward the federated servers.

Factom can operate on top of any blockchain - but they have chosen to use the Bitcoin blockchain. Kudos to them

That sounds nearly identical to the Bitcoin Lightning Network. They plan to use a hub and spoke model with serial multisig contract micropayments. It would only add one step to hash your data through static IPs. Howeverer, the FACTOM white paper doesn't discuss how the Factom blockchain will achieve consensus. Bitcoin contracts would require an open payment channel. consisting of counterparty (not xcp) deposits.

The information about FACTOM is unclear at the moment. I'm no longer skeptical of its veracity. Execution has been Bitcoin's historical adversary.

I am not sure how the Factom blockchain achieves consensus... my guess is it will be through Federated servers with a financial stake in the network, ie: Masternodes and these masternodes will be rewarded for hosting a full node through the spending of Factoids and they communicate with each other to ensure consensus among all masternodes on a time interval. This is purely a guess.

Another guess is those Factom blocks will contain the hashed information, the corresponding Bitcoin block hash, and through the Federated servers and/or P2P clients will host the data...

Yeah, this is still really confusing lol

I look forward to seeing more information next week.

Using Proof of Stake will end up with Masternode stakeholders owning a lot of beach front property.
Edit: Proof of Stake will allow large Factoid holders to vote on the conversion rate. They will make it prohibitively expensive to buy entry credits. Wealthy attackers can create counterfeit entries and cause genuine entries to be ignored by consensus. In other words, Proof of Stake is not a good consensus, especially for property. Wealthy factoid holders will collude to attack record systems of valuable real estate. This has already been done in countries that have gone to computerized real estate bookkeeping. It would be better to not avoid Bitcoin's consensus approach. Proof of Work offers stronger protection from such attacks.