It’s no secret that China is the world’s second-largest economy. And in 2008, the country became the largest population on the Internet. Now, as this Asian behemoth continues its meteoric rise, innovative technologies are needed to strengthen their economic infrastructure.
Enter, Factom Inc. an Austin, Texas-based firm at the epicenter of the blockchain movement. Factom’s cutting-edge solutions provide governments and business stakeholders with a means for facilitating data transactions on a massive scale in a manner that’s secure, auditable, verifiable and tamper-proof. The company’s blockchain technology solutions secure data for large public and private entities through the creation of a cryptographically unique data footprint that integrates with Factom’s immutable, distributed ledger. This data is then confirmed through a “proof of existence” model that codifies it for all future transactions.
The name Factom comes from the Latin Factum for “Anything stated and made certain.
The potential benefits of this emerging technology to Chinese economic efforts are immeasurable. From process efficiencies to massive cost savings, blockchain innovations provide a way to effectively manage exponentially growing amounts of digital data that the core of the country’s economic, social, technological and cultural fabric.
According to Factom co-founder and CEO Peter Kirby, the key theme undergirding this Chinese interest in the blockchain is integrity. “What’s really interesting about China is that their billion plus people have a difficult time trusting each other. In particular, they find it difficult to trust contracts as well as the court system. That’s the core of the problem.”
The beauty of Factom’s model, Kirby said in an interview with BTCMANAGER, is its ability to integrate any system with a blockchain back-end that allows for a permanent, immutable audit trail for data. It’s through this that a country like China can realize a whole new way to ensure accountability and a tamper-proof repository for data that heretofore had been susceptible to tampering by any number of third-party stakeholders.
Two Bold Applications of Blockchain Technology
Aligned with a long-term vision for better managing their cities and massive urban landscape, China’s government has agreed to collaborate with Factom and consulting partner iSoftStone in employing blockchain’s distributed ledger power to fuel a comprehensive “smart city” initiative. The foundation of this plan is centered around a well-crafted set of strategies for erecting a new storage, auditing, and verification service infrastructure to accommodate the country’s unrelenting growth push.
I think of a smart city as a whole collection of sensors. The challenge for a country like China is in how to prove that the sensor data doesn’t get changed somewhere along the way. So in a sense, the purpose of this initiative is to provide audit trails for sensor data. In other words, how do you prove that the pollution data being captured is correct or that the traffic data is right.
Dovetailing off of this is a second partnership that was recently announced between Factom and the Chinese electronic data notarization service Ancun Zhengxin. Here, Factom will serve in an advisory and technical support capacity in an effort to help Ancun erect a blockchain infrastructure that will encompass over 100 locations in 28 provinces across China. The ultimate objectives: to leverage Factom’s blockchain model to secure data history and provide timestamps thereby ensuring greater openness and accountability while reducing costs.
Kirby says that this project’s importance is directly related to the soaring peer-to-peer lending culture that’s proliferating in China, replete with over 1,600 P2P lending companies that represent billions of dollars to the Chinese economy. He notes that because these monetary exchanges occur outside of China’s traditional banking system, a core problem has emerged, namely, in how to verify and prove that a transaction has.
This is where, according to Kirby, the blockchain shines in its ability to record it securely. “With millions of peer-to-peer transactions now taking place throughout the country, compliance of these lenders becomes problematic. This has led to more stringent rules and calls for accountability around this.”
The Future of Data Integrity
With the rapid scaling of cities and regions worldwide, such as those in China, it is anticipated that growing numbers of countries, corporations and governments will champion technological innovations to manage their large data repositories and expansion plans. It’s here where Blockchain-based solutions can offer higher levels of transparency and accountability while reducing costs and expenses.
This is all consistent with Kirby’s contention that the projects that Factom finds itself increasingly engaged in are more representative of problems with data than problems with moving money around. He goes on to champion the exponential nature of blockchain in providing real world solutions to these challenges.
Says Kirby, “In a sense, bitcoin at seven transactions per second has some limitations its facing at present. So if you really begin thinking about applications from the blockchain, you are starting to think about many, many, many orders of magnitude beyond those seven transactions per second, particularly as it relates to cities where billions and possibly trillions of data points can be impacted. This, as I see it, supports why Factom’s technology allows blockchains to scale, way, way, way beyond the blocksize debate.
The most important question of the 21st century is how to balance individual privacy with public transparency. There are huge debates about this going on behind closed doors.
The recent ventures in China, says Kirby, represent a great opportunity for Factom to demonstrate another way to think about scaling blockchain by putting a data layer on top of it. “The problem we are ultimately trying to solve for is this tendency among certain stakeholders to monkey around with sensor data. Our charge is to ensure that the data that’s been gathered is 100 percent accurate so that someone can’t lie about the pollution coming out of their city or even their private factory.
In achieving this says Kirby, the blockchain can bring a tremendous amount of transparency to how cities and businesses actually operate. “Because whenever you boost data transparency, you have a motivation for mischief. This is where the blockchain can help keep everyone honest.”