Factom For Investors #1 – What Is Factom (FCT)?

This is Tai Zen broadcasting from one of the most popular malls in the city of Boston, and this is called the Natick Mall. And in this video, I want to share with you and everyone my friends about Factom and why I am considering the investing in Factom. And matter of fact I’ve already invested into Factom, and then a lot of my friends were asking about it, and we just want to share this with you guys.

So Factom is a software that’s written by a gentleman named Paul Snow who was the original co-founder of the Texas Bitcoin Conference. He invited me to the Texas Bitcoin Conference in the City of Austin, which is located in the state of Texas back in 2014 when Bitcoin was hot and when NXT just came out. So I went there and talked about some of the things that Bitcoin can do to get into the mainstream, and so that’s who Paul Snow is.

He’s very well recognized in the Bitcoin community for starting the Texas Bitcoin Conference with some of the other people. So the reason why Factom was created was back in 2008 when the stock market crashed and the real estate market crashed due to all the fraudulent stuff that The Wall Street was doing.

First of all, they were selling homes to people who were not qualified, and who did not make enough money, and do not have a good enough credit score to buy the homes. And for example, if someone only had enough money to pay for $100,000 homes, the banks were committing fraud by giving a loan of 400, 500, 600 a million dollar loans to someone who could only afford a hundred-thousand-dollar home.

So after the homeowners would buy the homes that were too expensive for them to afford, and they didn’t put any money down to show that they had enough money to pay for the house. Now if you’re listening to this outside the US, most people outside the US like in Asia and Africa, and stuff. Most people normally pay upfront like if they want to buy $100,000 home, they were just outright paid $100,000 in cash, and they would buy the home.

The way that first world countries like America, and like Canada, Australia, and Europe work is that they buy homes on credit, meaning that you put 1 or 2 or 5% down on the house. If you buy a house that’s a hundred thousand, you would give the bank like 5%, 2% or 3% of that amount, and the bank would give you the rest of the money to buy the house, and the rest of the time you would spend like 15 years or 30 years to pay off that loan to the bank.

So that’s how Europe and the U.S. work, the reason why I’m telling you guys this is that by doing that the people who were the homeowners still owed the banks a lot of money, and what the banks did was that they would take all this money, all these loans, and they would collateralize it and securitize it some way on Wall Street, and they would sell it so that people can buy and sell it just like if it was a stock.

What happened was when the people couldn’t pay for their homes because they never had money to pay for such an expensive home in the first place, they defaulted on the loans and the entire real estate market collapsed in 2008.

So what happened was after 2008, after the crash, the banks were trying to foreclose on the homes, and it was very difficult for them to foreclose on these homes simply because they did not have proper titles, and proper deeds to indicate who the owners of the homes actually were.

And because the banks sold off the loans to other banks, and the other banks sold it off to other banks, what happened was nobody really had a clear document or evidence of who actually owned the home, and who actually owned the loan that was on the home.

So what happened was there was a bunch of foreclosures on people by banks that didn’t even own loans. And then, people that were kicked out of their homes repossessed by the banks, it was not clear who owned the title to the land, of the house, or the home, or the property, or things like that.

So the reason why Factom came along was that they wanted to resolve this nightmare and this issue where the banks not having… and not just the banks but the homeowners not having clear…So on one end, we had homeowners claiming that they have paid loans on their bank and been making payments on it.

So there’s no reason why they should lose their home and on the other end, we have banks that claiming that they wanted to foreclose, and repossess, and take back the homes of the people living in it.

So there was a huge debate in America on who actually owned the homes so Factom is coming in, and what they’re doing is they set up a system where they take the title the deeds and all the payments that were made on a specific home from a homeowner, and what they’re going to do is they’re going to hash it.

And what hashing means is that they’re going to encrypt the data the documents, they can scan it in with scanners as a PDF or whatever, and take all the bank statements, all the contracts, the documents related to who owns that home who paid for it, the monthly payments that are made on it and they’re going to compress it.

And they’re going to hash that data, and they’re going to insert it into the blockchain. The reason why they want to create that hash is that to make it a smaller file. And they’re going to take that hash, and they’re going to insert it into the Bitcoin blockchain is because once it’s in there and it’s permanent in there, no one can come in and change it or commit any fraud with the documents.

Because everyone can go in there and look at the hash, and see the documents there. Now, here’s the key, here’s what makes it work. The hash has to be in a directory that the public can access. Once they access it there, it’s public and the hash is in the Bitcoin blockchain.

Once they do that, if anybody that wants to see who owns the house or the property or the building, they can go into the Bitcoin blockchain, look at the hash, and compare it to the public directory over here where the original documents, and the titles, and the deeds, and the bank statements are held and match it up.

So the PDF, and the videos, and everything, and the photos of the house, and the building, and they’re too big of a file to put inside the Bitcoin blockchain. So that’s the reason why they have to hash it. So the original owner of the house can keep these JPEGs, the PDFs, and these bank statements, and then they can always use it as a document to prove that they own the property. So the banks can’t come and take it.

So that’s what Factom does. It creates a directory where you can store those documents as a PDF, and JPEG, and all these things, and Factom will go in and compress all those documents that you put in there, and then insert it into the blockchain. Now, they can insert that into the Bitcoin blockchain, or they can insert it into the Ethereum blockchain, or any blockchain.

The reason why they choose to put it inside the Bitcoin blockchain is obvious that that’s the most popular one that everyone uses, it’s the most accepted one, it’s the most trusted blockchain. And it’s also the most secure blockchain because it’s been out on the market the longest, and all the computer hackers are trying to hack it every day to steal the Bitcoins and they’ve not succeeded.

So if you’re going to secure these titles and these deeds, and these property documents, the best thing to do is put it in a blockchain that has been consistently proven to be secure, so that’s what Factom is for.

 

I know I just went from the mall behind me and now all of a sudden I’m sitting at Sichuan Gourmet restaurant in Natick or maybe Framingham at the borderline. What happened was when you guys saw me pause the video. The mall security came and kicked us out, they said we couldn’t be talking about no Bitcoins, and no Factom inside the mall.

So my buddy Jeff and I, we got kicked out so we had to move. At least the mall cop was courteous enough not to delete our prior video. So here we are at a Chinese restaurant getting some dinner, and Jeff and I are going to finish up on this video, I’ve never been kicked out for making a Bitcoin video before.

Jeff: It was a little embarrassed.

You should have seen the cop. He even wanted to ask us because he stood there, and he listened to what I was saying for about a good 5-10 minutes before we noticed something was wrong. So Jeff finally hit the pause button, gave me the timeout signal. So we paused the video.

Jeff:

He actually took the time to ask you. He’s probably a wealthy man in five years.

Exactly. If he asked us what we were talking about, he’d probably be a wealthy guy. So let’s get back to the topic here guys. So we were talking about Factom, and how they’re developing this directory where you can insert all the documents that verify that document that you own the property or the bank owns the property, or whoever it is that’s supposed to own the property, and they hash it, and compress it, and then insert it into the blockchain.

Now, the thing that I like about this is that this is a serious problem not only in the first world countries, such as the US that revealed itself after the crash of 2008, but if you go to countries like where I come from in Vietnam, when the Communist took over most of the Southland part of Vietnam where I come from, they took it and confiscated all the properties. And what happened was like over 20 years later, they decided to return the property back to its original owners.

There was a lot of confusion in a small fishing village where I grew up, and they couldn’t figure out who owned what part of the land and on top of that, they could not really distinguish how far the land that my family owned extended.

So we’re not just talking about first world countries, but we’re talking about third world countries in Asia, in Africa, and in South America where what they don’t have a trusted methodology to record the land titles, the property titles, the deeds, and things like that. And I believe that this Factom, what Paul Snow and his team are doing, I think that they’re going to build this up to be really really awesome so that they can go into it.

So that’s something else that, that I believe, that has a very very utilitarian and very useful technology, that not just the US, but all the countries around the world first world, third world whatever can use. So any questions or comments on that?

Jeff: What do you think of it riding over Ethereum?

So that’s another thing too that I like about Factom. Oh, I forgot to make this my disclaimer as always guys. I was invited to speak at the first Texas Bitcoins Conference in Austin Texas by Paul Snow. Outside of that, I have no relationship with him. He did not pay me to make this video. Nobody from Factom did. I am not related to anybody on there that I know, so I just want everybody to know that. Because I want you to know that I’m just coming from an investor’s perspective and a neutral perspective. I’m looking at it from an investment perspective only.

So Jeff was just asking me about my thoughts on the Factom service going on top of the Ethereum, and I think it’s great. I think by doing that they are hedging their risk in case the blockchain… So they hash the same property title or deed, and they insert it into the Bitcoin blockchain, and they also insert it into the Ethereum blockchain that kind of protects them for the long term.

If one blockchain fails, and the other one succeeds, then they already have the data in their record. So I think that’s a very smart idea to do. And I would not be surprised if they insert their property titles, and property deeds into multiple blockchains.

It’s just a small piece of data, and when they insert it, all they have to do is they just have to send like a small fraction of a Bitcoin or a small fraction of an Ether into that particular blockchain, and it gets recorded in there. So it’s not like it costs a lot, it’s practically free to insert it in this.

So, to me, it’s a good idea. I hope they do it for all the blockchains that are popular because you’re not, nobody knows which one is actually going to succeed, and survive 100 years from now.

Jeff: That’s true! We don’t even know really what this is, yet.

Yeah. So this is the reason why it’s risky right, but here’s the thing. If you’ll notice recently, Factom had a big jump in December because they were able to raise the money that they had asked for. So that’s why I had that big price jump December. And then if you fast-forward to just a few couple weeks ago. So what happens is this, they are expecting in the month of April to get their next round of funding.

So the Factom team has been running around China trying to, they recently went to the Shanghai Bitcoin Conference or something like that, they’ve been announcing Factom over there. They’ve been educating the Chinese people in Factom, so we have a lot of Chinese people investing in Factom, and then they also announced their partnership with some smart city, some company in China that’s going to start using the Factom service to record all their properties, and their land titles, and their deeds, and everything like that.

They announced that they had this partnership with this Chinese smart city, and they’re going to do this partnership where they’re going to record the land titles and stuff like that for them. So that’s why we had that big jump in the price of Factom.

I still think it’s kind of early even though the price has gone up quite a bit. I would not get in right now at the top, but when there’s a big pullback, I would say as long as that pullback happens, before they announce the results of their fundraising and China, I think there’s still time to get in, I have a few friends that are waiting for that. So they’re going to get in when that pullback happens.

The other thing too is that… And if you’re wondering what the pullback price is, it’s not really a specific price, you have to draw like a trend line at the bottom of all the lows on the charts, and then whenever it hits that trend line that’s when the ideal time to buy back in.

So I think that’s going to be a huge announcement. And I think that the market’s just going sideways for Factom right now until that announcement happens in April. So hopefully it’s some good news so that everyone that’s involved with Factom will get a boost and make a little bit of money.

Jeff: So $2.06 where it is right now? Is it a fair price well if someone wants to buy it today?

I don’t have the charts in front of me guys, so it’s kind of difficult to look at that. But basically, there’s an uptrend in the price, and every time it hits that trend line, that’s when I would look to get back in.

But if it pulls away from the trend line, that’s a very risky place to buy in because more than likely it’ll come back. And when it comes back, it’s going to pull back against you, and you get in at the top, and it pulls back in and comes down to the trend line before it bounces off, you’re going to take a lot of heat.

Taking a lot of heat means that you are going to have to sit there, and suffer emotionally while the price pulls back against you. So just be patient. Don’t jump ahead of guys. You guys always hear me say do not jump in after a big run up in price, because there’s going to be a lot of people who made some money there.

They’re going to sell to exit their positions and take profits. And when everybody is selling to take profits, naturally, the price is going to come back down. So wait until the price comes back down, that’s when you want to hop on.

That’s all I have, for now, guys. I just want to share with you guys that really quick about what my thoughts are on Factom. And when I get a chance, I’ll get our other team members, the Peter Thiel of cryptocurrency investing, or the Warren Buffett as James D’Angelo calls it. We will bring Leonfu.com in and he and I can sit down, and we can go over some more, and share with you guys.

So thanks for watching this video guys. And if you haven’t subscribed already, make sure you subscribe to our channel and give us a thumbs up. If you don’t like it give it a thumbs down, so we’ll know not to waste time making these videos. So I’m going to get on with my dinner now.

 

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