Guys, Ive question regarding the Entry Credits. Companies dont have to touch Factoids at all to make entries in the Factom System, which by the way is brilliant beacuse it reduces the risk of holding a cryptocurrency. However, I dont understand why Entry Credits cant be stolen. In the whitepaper is stated following:
Entry Credits are non transferable, so the user cannot assign them to another users public key, and selling private keys isnt practical or useful.
Why is it not possible to transfer a entry credit?
Thx in advance!
In order for Entry Credits to come into existence, a specific field in a Factoid transaction needs to specify an Entry Credit key. Since this balance does not increase another Factoid address, the Factoids are essentially burned. The Factoid transactions live in the Factoid blocks. When sending to an EC pubkey, the sender does not need to know the private key. This is why the Entry Credit store can work.
https://shop.factom.com/A corresponding balance increase is made in the EC block which increases the specified EC balance. Those ECs are forever tied to that public EC key. There is no mechanism for reassigning the EC balance in the EC blocks. The only thing they can do is pay for Entries.
If you have a non-unique private key, others can make Entries using those ECs. The key point is that the ECs can't be sent so someone else without sharing the private key. The doublespend problem is not solved with Entry Credits. Someone can sell the private key to N different people, and only the first person to add Entries into the blockchain can use them.