The Factom Protocol is a Proof of Authority blockchain, operated by nearly two dozen entities across the globe. Immutability is ensured by the unlikeliness of over a dozen independent companies to agree on a malicious attack, combined with the unlikeliness of such cooperation staying secret.
However, the Factom Protocol goes one step beyond that by anchoring the latest block hashes into both the Bitcoin chain and the Ethereum chain, thus transferring the immutability and credibility of both these chains onto Factom itself. Anyone who doesn’t trust the Proof of Authority can instead rely on the safety of the world’s biggest chains.
In return, all three ecosystems benefit. The Factom Protocol gains immutability credibility. Bitcoin and Ethereum see increased usage.
Bitcoin Anchors
The hashes are entered into the chain via OP_RETURNs. The address that pays for anchoring right now is 1K2SXgApmo9uZoyahvsbSanpVWbzZWVVMF. At the time of writing, it has a staggering 255,243 confirmed transactions, each one paying fees to miners.
The total amount of BTC spent on anchoring at the time of writing is 19.87 BTC. At today’s prices of 11.8k USD/BTC, that would be worth almost a quarter million. To estimate how much was actually paid, we can look at the data over time.
First, let’s look at the average fee per block in BTC. Each plot point correlates to the fee of anchor record at the time of transaction:
Initially, the fee paid for each anchor entry was constant (0.0001 BTC) but the impact of the 2017 price rally is clearly visible. Starting around 2018, the anchor fee stayed a relatively consistent 0.000024 BTC with a few minor blips.
Using historic price data, we can also show what the BTC fee was equivalent to in dollars:
The overall shape remains the same but whereas the fee remained relatively constant post-2018, the fluctuation of the Bitcoin price is visible in how much the fee was worth.
In recent history, each anchor entry costs between $0.15 and $0.25.
To figure out how much was paid overall, let’s take a look at the cumulative anchor fees in USD:
The total cost of anchors (valued at the transaction time), is an estimated $47,127 over a period of about 5 years.
Ethereum Anchors
All anchors entries are submitted to a smart contract: 0xfac701d9554a008e48b6307fb90457ba3959e8a8. At the time of writing, it has 48,726 transactions, each using ~45,000 Gas. Ethereum anchoring was implemented in June of 2019, hence there are significantly fewer Ethereum anchors than Bitcoin anchors. Blocks below height 198000 were retroactively anchored in chunks of 1,000 blocks (resulting in around 200 transactions).
The total ETH spent on anchoring at the time of writing is 30.96 ETH. At today’s prices of 428 ETH/USD, that would be the equivalent of $13,250.
Like before, we can look at graphs to break down the fees:
All entries prior to June 24th, 2019 were made on June 24th, using a fee of 0.000184 ETH (with a few blips).
The noticeable vertical spike occurred on March 13th, 2020. For an unknown reason, the amount of Ethereum offered per gas varied dramatically, with fees ranging between 0.0002 ETH and 0.011 ETH (over 44x the lowest fee).
The graph of the equivalent value in USD is fairly similar:
It is immediately apparent that Ethereum anchors are much more expensive. The average Bitcoin anchor is less than 25 cents in 2020. The average Ethereum anchor fluctuates heavily between 25 and 75 cents.
The total cost of anchors (valued at the transaction time), is an estimated $6,319 over a period of about 1.5 years.
Data
The full data that was used to generate these graphs is available:
Bitcoin: https://docs.google.com/spreadsheets/d/1SDkHCTNpxyV07RgsR17ZTVNKZsAARiScdtfgED51K_A/edit?usp=sharing
Ethereum: https://docs.google.com/spreadsheets/d/1axPgTCc_2L70XQs-b6kDfC_-GNwz-PTUDdd30E8EmTQ/edit?usp=sharing
Note: These sheets are extremely large and opening them may take a long time. The graphs are on one tab, the data on the other.
The historic prices were taken from Cryptodatadownload’s Coinbase record. The BTC transaction data was retrieved via Blockchain.info’s API. The Ethereum transaction data was retrieved via Etherscan.io’s API.
Conclusion
It may not be a significant amount of money in the grand scheme of things but Factom anchoring into both Bitcoin and Ethereum provides consistent usage. In the case of Bitcoin, Factom has been submitting anchors for almost five years.
Hopefully, this mutually beneficial relationship will last for many more years.
