It is a secret for no one, I’m a fan of Factom. The project developed by the Factom team could literally change some aspects of our daily life by making the data that surround us honest and immutable. I won’t come back on the project itself as it was already explained in a previous article, nor on the valuation of its bi-currency aspect.

To add a bit of clarity, Factom is divided in two entities: a foundation and an incorporated company. The foundation (Factom) develops the protocol and the incorporated company (Factom Inc) develops applications on top of the protocol, and gets paid by clients for this. The success of Factom as a protocol, and thus of its factoid token, is independent of the incorporated company’s as the latter one only leverage uses the protocol.

Harmony

In my opinion, Harmony is currently the most ambitious project of Factom Inc. It allows to keep track of the whole life cycle of a mortgage, from its origination to its complete repayment. The system currently in place is made of physical signed paper and drag and dropped copy of these documents on centralized data center.

Costly legislation

Since 2008, the mortgage industry saw a myriad of new legislation put in place to regulate the activity. It has two goals: protecting the clients of these bank and to prevent the banks to go wild once again, lending to insolvent people. All is gathered into the Dodd Frank Act. The act forces bank to add extra step of audit in the process of lending money. All these steps cost a serious amount of cash. According to Peter Kirby, CEO of Factom Inc, it costs now around $12k to the bank to issue a mortgage, when the cost was around $2.6k pre 2008. Harmony would seriously help to reduce this cost, making it very interesting for the banks.

Old Processes

The audit extra cost due to the Dodd Frank act is one thing. But to that, the cost of operational issue has to be added. The banks are liable for any lost document on their end, and not being able to comply with the regulation triggers consequent fees. When Bank of America bought Countrywide, a masterpiece of the 2008 crisis and was held liable for its target’s questionable practices. Mortgage-related documents were lost during the acquisition and Bank of America had to pay 17 billions in fees for that. Sae goes for Wells Fargo, paying 1.5 billions. Having everything stored on an immutable blockchain would simply solve for good this issue as at any time, the banks would be able to prove the content of their mortgage inventories. One again, the operational risk is lowered, reducing the risk to pay huge amount of fees. Banks will love it. By the way, another reason to adopt Harmony.

Protect the clients

The previous points were in favor of the banks. But history shows that the banks aren’t always on the good side of the gun. Having data stored in a immuable ledger would also allow the clients to prove any fraudulent modification of their current loan contracts. This is pretty much what Wells Fargo did, amending the terms of multiple mortgage contracts without the consent of the clients to get paid interests on a longer period. Luckily, it was discovered and now the bank faces another high fine. Harmony allows to finely track these kind of fraudulent acts as every update on any mortgage if finely stored for good. It makes possible to know exactly when things were done, without letting the possibility to hide these amendments.

A game of connections

Having a nice product is one thing, to sell it is another. The reason why I trust the project so much is because the team is made of experts in their field. And speaking about the mortgage industry, there are two interesting people present in the team: Laurie Pyle and Jason Nadeau. They both worked on the IT side of mortgages, selling products to handle the flow of data to big players. They must have the set of connections needed to advertise Harmony in the best way. Already spreading the Word.

A gem

Harmony is fully functional and only requires minor modifications from a client to another. Banks can save billions. Clients are protected. The overall market is forced to be honest and immutable: legislators will love it. Factom has on its side professional sellers of IT solution for mortgage. Let’s all note that Harmony is one of the few working products built on top of a crypto project. Factom is a gem.

Other Ventures

Kaula & Atrris

It’s no mystery anymore that Kaula and Atrris have announced a joint venture. The goal of their alliance is to secure the data of the social security of Japan through the Factom protocol. Kaula and Atrris will clarify the way they will implement the whole project during a seminar to be held in August, the 3rd. The news had a significant impact on Factoid’s price when it was release.

Hyperledger

IBM and a whole lot of companies are working on Hyperledger. Best thing is to quote the site itself:

“Hyperledger is an open source collaborative effort created to advance cross-industry blockchain technologies. It is a global collaboration, hosted by The Linux Foundation, including leaders in finance, banking, IoT, supply chain, manufacturing and technology.”

As explained in a previous article, Factom is part of this consortium-like. Hyperledger aims at providing plug and play block chain solutions. Factom would be the de facto used technology for every aspect of Hyperledger that would need a public witness. Understand by this a public proof of existence, stored for good in the bitcoin blockchain. Hyperledger is widely marketing its products. Each new client is potentially a new user of the Factom protocol.

Department of Homeland Security

Factom Inc is slowly but surely working on its proof of concept for the DHS. The goal is to secure the IoT-related device of the DHS,mostly CCTV I guess. They are four phases in total, and Factom is currently in the third one. They already got two grants of $250k each from the US government. Factom Inc has recently presented some results. The Powerpoint used for the presentation is here. Most of the information must have been given orally as the document doesn’t say much. But.

Surprise

Remember my first article? It was mentioned the words the Peter Kirby, CEO of Factom Inc. Three large—“very, very large”—financial institutions are already in the process of signing contracts with Factom. Since then, no word about it. The overall is ruled by NDA (No Disclosure Agreement). The sweet surprised is present in the power point presented to the DHS. Fidel to the NDA, no name is given, but some clues are left, page 4:

We know at least that during presentations to the US government, Factom Inc admits having some big clients.

Miscellaneous

Indeed, there are multiple other pending projects. I won’t write a lot on them. Let’s name them at least: Smart Cities in China, WanCloud, dLoc Smartrac, the Bill Gates project, the API.

Drawbacks and conclusions

Factom has three drawbacks. The first one is about the inner essence of the project. It is far from sexy for the average joe, but definitely awesome from a business perspective. I spoke about the project to a friend working with data. He understood directly the value of Factom. Second point is the lack of information. We all know there are lots of brewing projects, but because of NDA the team can’t speak much. It is very frustrating given all the over-self-hyped coins in circulation. But keep in mind these overhyped coins don’t deliver anything yet, pure speculation. Factom has delivered already. Third point is the absence of third-party wallet support. The Exodus support was postponed several times, and same goes for Jaxx. The Factom block chain is unique given its architecture and the way things are handled. Factoids, Entry Credits et data stored are all segregated. The Factom dev team is in uncharted territory, thus the chain might stall here and there. Exodus and Jaxx don’t want to be involved in possible unstable chain. Can’t blame them.

Now, read the article again. Get the whole idea of what Factom tries to accomplish. Mistakes were made, mistakes will be made again, but the team is definitely onto something. They are pioneer with no real competitors, they have at their reach powerful people (Gates, Draper, Us Gov, Banks) to leverage, they already are involved in serious and useful projects. In short, they have all the assets to succeed, and they will.

My previous articles on Factom

Factom – FCT – Cryptocurrency Huge Potential

Factom – FCT – Entry Credit and Factoid’s Source of Value