Starting tomorrow, potential users will be able to start buying Factoids, the currency that powers Factom, from Koinify. Factom is described as “a data layer for the blockchain” that will help businesses manage their data.
To gain access to that Factom network, though, requires Factoids, a digital token designed specifically for the Factom network. Starting tomorrow, these new coins will be available for sale. However, they will not be dispersed until May 15th.
This is where ShapeShift comes into play. ShapeShift allows for users to instantly convert from one cryptocurrency to the other. A user could trade their bitcoin instantly for litecoin or convert from dogecoin to Ripple. This ease of transferring from one currency to the other is the catalyst for this partnership.
“Factom will be listing ShapeShift as a recommended way for Factoid Software Sale participants that do not have bitcoin to get BTC for other digital tokens,” explained David Johnston, Chairman of the Factom Foundation. The second part of this agreement will introduce Factom onto the ShapeShift platform so that users could easily convert in and out of the currency. This part of the partnership, Johnston explained, wouldn’t happen until after May 15thwhen the software sale finished.
“Our team spent substantial time researching the technologies and protocols available to build scalable blockchain based applications and the conclusion we reached is that Factom had a solid approach and architecture for publishing and securing general data to the blockchain and so we decided to integrate their digital token into our platform,” said Erik Voorhees, ShapeShift CEO, in a written statement to Bitcoin Magazine.
This partnership means that any user that wants to exchange in and out of Factoids once they launch can utilize ShapeShift’s platform. This makes ShapeShift the first partner to integrate Factoid tokens. In addition, there are no fees associated with transferring between Factoid and any other currency beyond the typical exchange rate, which is based on the market rate of Factoids.
Blockchain scalability remains a topic that many in the bitcoin community debate. Even Gavin Andresen, the chief scientist at the Bitcoin Foundation, has talked extensively about the need for scalability on the blockchain. Originally, the size of one block was infinite, but due to denial-of-service attacks, Satoshi rolled the size back to one megabyte. (https://blog.bitcoinfoundation.org/a-scalability-roadmap/)
By taking any data, as Factom does, and processing it on a layer above the blockchain to encoding it all down into one hash, the data can still be verified on the blockchain. In addition, this approach minimizes bloat on the blockchain as only data hashes are stored. This partnership will facilitate the ability for users to acquire Factoid and begin using the network.
This article has been updated to reflect the fact that ShapeShift is only the first partner to integrate the Factoid tokens and the partnership is not exclusive.