Whitepaper - Factom With Cover
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3) Bloat – with the Bitcoin blockchain size limit of 1 MB per block, transaction throughput is<br />
capped at 7 transactions per second. Any application that wants to write and store information<br />
using the blockchain will add to the traffic. This problem has become politically charged as<br />
various parties seek to increase the block size limit.<br />
<strong>Factom</strong> is a protocol designed to address these three core constraints. <strong>Factom</strong> creates a<br />
protocol for Applications that provide functions and features beyond currency transactions.<br />
<strong>Factom</strong> constructs a standard, effective, and secure foundation for these Applications to run<br />
faster, cheaper, and without bloating Bitcoin.<br />
The <strong>Factom</strong> Ecosystem<br />
There are several primary components in the <strong>Factom</strong> ecosystem, as depicted below:<br />
Once the system is set up, including issuance of Factoids (i.e., the cryptocurrency of<br />
<strong>Factom</strong>) and user accounts, token value is transferred among users, <strong>Factom</strong>, and<br />
Bitcoin with the following primary interactions:<br />
1. Application Owner purchases Entry Credits with Factoid<br />
2. Application records an Entry<br />
3. <strong>Factom</strong> Servers create Entry Blocks and Directory Blocks<br />
4. <strong>Factom</strong> secures an anchor (hash of the Directory Block) onto the blockchain<br />
Details of these and other interactions are in the upcoming sections.<br />
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