Factom

About Factom

Factom, Inc. was a blockchain technology company established in 2014, with its headquarters in Austin, Texas. The founding team included Paul Snow, Peter Kirby, David Johnston, Brian Deery, Jack Lu, and Tiana Laurence. Paul Snow, who also served as CEO, had previously founded the Texas Bitcoin Conference and an open-source rules engine project called DTRules.

The company focused on providing blockchain-based data integrity and provenance solutions for enterprise clients. Factom's core technology was designed to address the scalability, cost, and speed limitations of using the Bitcoin blockchain directly for data storage. It did this by creating a separate protocol layer that would bundle and anchor cryptographic hashes of client data onto the Bitcoin and Ethereum blockchains. This process created an immutable, timestamped audit trail without storing the actual sensitive data on a public ledger. The business model targeted industries with significant data auditing needs, such as mortgage servicing, healthcare, and government. Notable clients included the U.S. Department of Homeland Security, for which it worked on securing data from border sensors, and the Bill and Melinda Gates Foundation, for a project involving medical records.

Factom's ecosystem utilized a two-token system to insulate clients from cryptocurrency price volatility. Clients would purchase non-transferable Entry Credits (ECs) at a fixed US dollar price to pay for writing data to the protocol. These ECs were acquired by burning Factoids (FCT), the protocol's tradable cryptocurrency. This model aimed to provide a predictable cost structure for enterprise users. The company developed specific solutions like 'Harmony', a Blockchain-as-a-Service (BaaS) platform aimed at the mortgage industry to create immutable records for loans and workflow events.

The company raised approximately $15.9 to $23.6 million through various funding rounds, including a Series A that brought in over $8 million from investors like Draper Associates and Medici Ventures. Despite its technological promise and high-profile partnerships, Factom faced significant financial difficulties. After escalating annual losses, the company filed for Chapter 11 bankruptcy in June 2020, citing an inability to service its debts. Following the bankruptcy, Factom's patents were acquired by Inveniam Capital Partners in the summer of 2021. Subsequently, the Factom protocol's validators voted to upgrade and rebrand into a new protocol called Accumulate, which involved a complete rewrite of the original codebase.