Factom (FCT) Fundamental Analysis

Since the emerging crypto asset class is much like venture capital with liquidity, performing a quick market size analysis can provide insights into potential fundamental asset value.

What is Factom (FCT)?

Factom (FCT) is creating an immutable audit trail by providing for hashing of documents to its blockchain. By hashing an organization’s files/documents/etc. onto the blockchain, Factom enables the world’s first “precise, verifiable, and immutable audit trail”. Imagine the immense amount of data/documentation a single industry (real estate, banks, law firms, etc.) must generate then store and verify (i.e. to satisfy compliance requirements) on a daily/monthly/yearly basis. The native crypto asset of the Factom blockchain are Factoids (FCT), which ultimately provide for the right to hash data on the blockchain.

Questions to Consider when Investing

  1. Is there a published whitepaper? 

Yes…positive

  1. Is there a detailed development road map? 

In use…positive

  1. Does it use an open, public blockchain, and is the code published? 

Yes…positive

  1. Is there clear, logical, and fair pricing? 

Yes…positive

  1. How strong is the reputation of the founding development team (Strong, Mediocre, Weak)? 

Strong, the founding team has attracted reputable investors and advisers…positive

  1. How strong is the technology’s differentiator (Strong, Mediocre, Weak)? 

Mediocre, rides on Bitcoin blockchain. The Factom blockchain is fairly centralized…neutral

  1. How competitive is the industry the asset is entering (Strong, Mediocre, Weak)? 

Strong…negative

Price Target

Assuming:

  1. The Factom team delivers on the technology, and adoption occurs.
  2. Factom (FCT) is able to gain a 10% share of documentation data “storage” by 2025.
  3. Total global data storage needs with be 163 ZB by 2025, with .10% used for documentation storage, which will in turn be hashed to the blockchain.
  4. Despite Factom’s current pricing for hashing onto its blockchain, pricing will decrease by a factor of 100 by 2025.
  5. By 2025 data storage/hashing needs will continue growing by 15% annually.
  6. This model accounts for eventual FCT inflation (73,000 FCT per month).
  7. A 30% discount rate is used to bring future price targets (7 years in this report) to today’s dollar values. Although 30% is significantly higher than the current risk free rate, crypto assets must be discounted significantly to account for risk.

Because Factom (FCT) will derive its intrinsic value from the amount of data hashed onto its blockchain, this model is based on assumptions involving data storage needs by 2025. We take into account how much of that storage (163 Zettabytes) would be used for storing/hashing documentation (one tenth of one percent). Using an anticipated 10% market share for Factom, we then assume the price of storage on the Factom blockchain will decrease by 100x of the next 7 years.

Given the assumptions (above) the 7-year Factom (FCT) price target is given below:

factom fct fundamental analysis