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<strong>Factom</strong><br />
Business Processes Secured by Immutable Audit Trails on the Blockchain<br />
Contributors: Paul Snow, Brian Deery, Jack Lu, David Johnston, Peter Kirby<br />
Advisors: Adam Stradling, Shawn Wilkinson, Jeremy Kandah, Dexx, Marv Schneider, Steven<br />
Sprague, Andrew Yashchuk<br />
Reviewers: Vitalik Buterin, Luke Dashjr, Ed Eykholt, Ryan Singer, Ron Gross, J.R. Willett,<br />
Dustin Byington<br />
Version 1.0<br />
November 17, 2014<br />
www.<strong>Factom</strong>.org<br />
Abstract<br />
“Honesty is subversive” - Paul Snow<br />
In today’s global economy trust is in rare supply. This lack of trust requires the devotion of a<br />
tremendous amount of resources to audit and verify records - reducing global efficiency, return<br />
on investment, and prosperity. Moreover, incidents such as the 2010 United States foreclosure<br />
crisis demonstrate that in addition to being inefficient, the current processes are also terribly<br />
inaccurate and prone to failure. <strong>Factom</strong> removes the need for blind trust by providing the world<br />
with the very first precise, verifiable, and immutable audit trail.<br />
In the past, records have been difficult to protect, challenging to synchronize, and impossible to<br />
truly verify because of the manual effort involved. Computers automated some of these tasks,<br />
but they are even harder to protect, synchronize, and verify because computer records are so<br />
easy to change. Authority is fragmented across innumerable independent systems.<br />
Blockchains provide a distributed mechanism to lock in data, making data verifiable and<br />
independently auditable. Bitcoin’s blockchain is the most trusted immutable data store in<br />
existence; however, it is not very useful for non-Bitcoin transactions. <strong>Factom</strong> gives businesses<br />
access to blockchain technology without getting bogged down in currencies.<br />
In this paper, we describe how <strong>Factom</strong> creates a distributed, autonomous protocol to cost<br />
effectively separate the Bitcoin blockchain from the Bitcoin cryptocurrency. We discuss clientdefined<br />
Chains of Entries, client-side validation of Entries, a distributed consensus algorithm for<br />
recording Entries, and a blockchain anchoring approach for security.<br />
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