Solving IOT Problems with Factom’s Blockchain

Blockchain | March 21, 2018
Home » Company » Blog » Solving IOT Problems with Factom’s Blockchain

My last two articles concerning security and transaction volume mentioned briefly that the Factom Blockchain has a solution for both of these issues. While many of the blockchain projects receiving media coverage are financial in nature, the Factom Blockchain was created to secure data on a blockchain, not just record the transferring of funds. Factom has implementations in the medical and mortgage industries where billions of documents per year are created. There have even been discussions about using the Factom Blockchain to track stock market transactional data. These implementations allow systems to be audited without the need to expose private data. The Identity and transactional volume solutions in Factom to handle these systems also makes it ideal for IOT.

Signatures using public-private key pairs are a standard and accepted method of proving Identity. The Factom implementation leverages these to prove Identity, but it also makes management of those keys on the blockchain simple. As mentioned in the first article, managing these on the blockchain allows Identity to be maintained without necessary software changes. The Factom implementation has multiple key pairs for various uses. With current technology, the largest risk to key pairs is human error. If a private key is compromised due to human action (or otherwise), a Factom Identity allows the authority keys to be publically and securely updated. Updating keys in a blockchain allows a company to effectively patch their device software to authority attacks without touching the software on those devices. Using Factom Chain IDs, Factom Identity is not a service or API call. It is the methodology that was used at Factom to handle the Authority servers in the network. The structure of the Factom Blockchain works well with an Identity set up in this fashion. If another project was to use the same format or a variation of that format for Identity, the same functionality should be available.

As covered in the second article, an issue with having IOT on a blockchain is that there will soon be billions of IOT devices on the internet. Factom Blockchain architects have had these massive volumes in mind from the start. In fact, one of the phases of Milestone 3 includes the ability to shard the blockchain as a way to add transaction scalability. This sharding will allow you to ignore the parts of the blockchain that you do not care about. The NYSE trades around 3 billion shares per day. So even if only a 32-byte hash is kept for those transactions, your hard drive would be filled quickly with data that has no meaning to you. Sharding and other optimization methods for the Factom Network keep the size of the blockchain that you must have on your hard drive smaller, but also it also means that you do not have to process and hash blocks that you don’t care about. If someone is using the Factom Blockchain to add auditability to the kitten breeding operation they are running, it will not bring your services to a grinding halt regardless of the number of kittens getting adopted.

With large amount of transactions come large transactions costs. Nothing in life may be free, but there are ways to keep costs down. So far, digital currencies have wildly fluctuating costs. If you cannot determine what a project will cost to operate, how can you determine whether it is worth doing? Because of this, Factom has established the cost at $0.001 per every entry into the blockchain.

When you buy Factoids, the native token on the Factom Blockchain, you must convert some Factoids to Entry Credits in order to make an entry into the Factom Blockchain. Once these Factoids are converted to Entry Credits, they expire and are no longer usable. As the price of Factoids fluxuates, the number of Entry Credits per Factoid also fluxuate to keep the price per Entry Credit at around the targeted $0.001. Because of this, 1000 entries will cost about $1 whether Factoids are $1 or $1,000,000. The targeted price of Entry Credits allow predictable costs for any project that might be using them.

If you or your organization is planning on leveraging the abilities of a blockchain, or just the marketability of the term ‘blockchain’, on an IOT device or any other high transaction volume service, look into Factom. Factom can deliver high transaction volumes, secure identities and a predictable cost to your project. Please reach out to us at hello@factom.com.

POSTED: March 21, 2018 BY Matt Whittington IN Blockchain
ABOUT THE AUTHOR