The Factom protocol and project is an enterprise focused effort that addresses data efficiency and security issues for businesses through a second layer built on top of the Bitcoin blockchain. The technical solutions proposed by the developers target businesses that make heavy and frequent use of data - the medical and insurance industries, for example.
Interestingly, Factom recently launched a stablecoin network called PegNet, which features the first such token that is capable of being mined, via a hardware friendly mining algorithm. The PEG token is tied to 32 assets, including several fiat currencies, as well as gold and silver. For those of you who don't know about PegNet and PEG yet, take a look at this detailed article on it.
Factom’s Chairman of the Board, David Johnston, participated in a 2 hour long AMA on Telegram with CryptoCalibur to discuss this new network. The AMA covered the technical aspects of PegNet, its purpose, mining, and the general agenda of the initiative. We covered some of the major highlights from the AMA in this article.
I am a crypto investor and I only care about the prospect of a crypto that I chose, tell me the reason why I should choose your token over the existing one? What is the advantage of your token that can convince me to change from my favorite token? Is your platform only helpful for Crypto friendly users or non-Crypto friendly users as well? If yes, how can they use it and how you will attract them to PegNet?
PegNet is a platform for storing, trading, and sending your favorite tokens. This includes creating pegged pBTC, pETH, pBCH - whichever of the many tokens you like. Think of it as an Over The Counter platform that has no liquidity limit. Since you are only moving around value inside your wallet, you don't move the price of the token on an order book and that is why there is no slippage. PegNet is useful for anyone who wants to hold value in any of the Pegged assets, Fiat + Crypto + Gold / Silver. Lastly it isn't "my project" : ) There is no ICO, no premine, no foundation, no company - just CPU proof of work mining. You can see all the mining here. There are more than 40,000 CPUs worth of hash power already.
Why did you create PegNet as the stablecoin network for Decentralized Finance?
One motivation I see is that reserve based stablecoins pose HIGH risk. If you have to trust any central party, then they may be shut down or they may be hacked, so on and so forth. PegNet is decentralized, all the assets are held by the user, there is no custodian or third party. You can do all the function by using the protocol directly. THIS IS IMPORTANT for the blockchain space that we stay decentralized. I hope you will support us and join the community
What are Pegnet's plans 2-3 years from now? What are the growth targets for sales, users, markets etc.? What do you think about Vietnam market?
We welcome all users, PegNet is open source and decentralized anyone can use it. Personally, I hope to see many users gaining value from holding value or trading on the PegNet the assets that are most passionate about. PegNet is a neutral system and allows for most major cryptos, fiats and metals. I hope to see more pegged assets added too.
What global problems does PegNet aim to solve and why are they important to solve?
The main goal of PegNet is to put the users in charge of stablecoins. Remove the central parties and the stability fees of collateral based stablecoins. We shall see where the community is most active in Q4. I will keep explaining it, talking about it and supporting the developers. The mining pools for example just launched last week. You will want to join the Discord and learn more about how to access that.
What are the milestones you have achieved so far? Sharding, layered and cross-chains are the three future solutions for high-performance blockchains. So which way is PegNet heading? And what are the main reasons for implementing that direction?
PegNet is a Dapp so it isn't focused on the blockchain challenges. But both Factom and Ethereum, which PegNet is built on, are working on this sharding, layering, and other goals.
Where do you see PegNet in next 3 years?
I hope in 3 years to see PegNet widely used by crypto and traditional finance people around the world as the platform to hodl, and move the tokens and balance a users portfolio of tokens.
Say that my home currency is USD and I am shopping online for a pair of shoes from an Italian merchant who wishes to be paid in EUR. How can I use PegNet for this transaction, what are the process and steps involved, and what are the advantages?
The biggest advantage is for the merchant. They can accept money in pUSD from the user and instantly convert it into pEUR and not take any currency risk. But the tokens are on the blockchain so they can quickly send the pEUR to a supplier and not have to switch back to crypto or wait for a bank transfer. The total cost to the merchant is only $0.001 USD.
What do you think will be the most popular use cases for PegNet? Could you give us some specific examples?
I want to hold pGold for example to store my wealth. But then I see Ethereum doing well and want to hold pETH. It makes it easy as a push of a button in my PegNet wallet to convert some of my pGold to pETH. No exchange risk, no OTC fee, no limit on the conversion.
How does the The pegnet exchange got revenue from user?
PegNet does not take any fee or percentage from the user. The $0.001 USD fee for a conversion uses FCT / entry credit to publish data to the Factom protocol to prove the data is not spam. The $0.001 USD of entry credit does not go to the miner, only burned by the protocol. The miners in PegNet earn 5,000 PEG each block every 10 minutes. So the miners can convert PEG into the pegged assets. That is their benefit, but that doesn't cost the users anything.
Are there any plans for a web based/UI based wallet + miner, and if so when can we expect them to be released? Also, Do you have any idea when PEG will be listed on CMC? (We know it's not entirely dependent on you since there's a $50k trading volume requirement if we’re not mistaken)
Great questions. I know there is a community team working on a web wallet right now for PegNet. I hope to see it in the next 30 days or so. If you have dev skills I suggest you join the PegNet Discord, very active chat there about many ways to improve the UI and make it easier for users. Don't know about CMC. The more exchanges that list pegged assets, the sooner it will be included I expect.
In applying such a relatively low fee, where will the profits from PegNet mainly focus?
There is no company. There is no profit for the protocol. All the pegged assets are generated by the users :) The benefits are to the users and the miners, as it should be.
At the current price of the token, it may not be economically profitable to have a node. Many nodes can be stopped and this will damage decentralization. What will you do to prevent this from happening?
Mining profitability depends on the cost basis for the miners. So far the hashrate has grown from 5 Million Hash per second to over 200 Million Hash so it seems the PEG is a good reward to increase the number of miners. The market will determine this, the more assets being created on PegNet the more this will create demand for PEG, and in turn bring in more miners.
In the past few years, many cryptocurrencies have been shown to be prone to hacking. How can you assure crypto traders that PegNet has strong security and privacy to prevent hacking?
Good question. PegNet security comes from the Factom Protocol, plus security from Ethereum + Bitcoin, which has been operating since 2015 with no hacks and secures hundreds of millions of records already for large companies, governments, and users all over the world.
Recently, there have been a number of user information hacks on platforms such as FaceBook and Binance. These are websites with leading security systems but have still managed to be hacked. How does PegNet protect the KYC information of users? Are you sure that KYC user information on PegNet is absolutely secure?
All users control their own assets/wallets on PegNet. There is no central exchange, no custodian, no KYC. There is no counter party and you aren't sending any transactions to anyone else. Only the user and the protocol. It keeps it simple and is the most secure way to do it.
So far, what is your processing speed in 1s, and what have you achieved so far?
Speed is not the big goal for PegNet. Security of the prices and offering lots of stablecoins is our goal : ) The transactions happen quickly on Factom/PegNet, if on Ethereum is about 15 to 30 seconds depending on the network speed.
How one can Mine PegNet? What were the major requirements needed?
Good first question. You can see the mining guide for PegNet here.
As PegNet uses a unique Proof of Work algorithm called LXRHash. Can you tell more about LXRHash ?
The LXRHash is limited by computers that have at least 2 Gigs of RAM. Additional computation does not add any advantage, so the ASIC and GPUs aren't any better for LXRHash. This is better for community development because any user can join with their CPU.
Should PegNet be worried about crypto mining compromises on their endpoints and networks? What could happen if such an algorithm sneaks into a system? What best practices should PegNet employ for dealing with crypto mining programs?
Thanks for the question. PegNet uses an algorithm called LXR Hash and its bottlenecked by RAM instead of computation. So there is no advantage for ASIC or GPU, most people mining are using CPUs. You can see more details here on the Community Presentation here. This is the same in Chinese.
When will there be a 1 click ease exe/APP for cpu miners - so no command line, just a simple button to start mining. Is it also planned to have a dashboard inside to 1 click convert the peg to ANY pAsset?
I know folks are working on the 1 click interfaces. I'd expect 2 to 4 weeks, but it depends on the developers time and bandwidth.
Which assets can be traded on PegNet?
You can see all the pegged assets here.
What are Pegnet's competitors in this market? What are your competitive advantages over projects with the same idea?
I don't know of any other proof of work mined Stablecoin networks yet. I would say more traditional stablecoins will compete with particular pegged assets pUSD vs USDT for example.
What is the most important markets that PegNet is focusing?
The new stablecoins for currencies that haven’t had stablecoins before are a good focus. Korean Won and Mexican Peso, for example.
Currently how many cryptocurrencies are PegNet supporting? Why should users use PegNet instead of using cryptocurrency wallets or direct exchanges?
Currently PegNet supports pBTC, pBCH, pETH, pFCT, pRVN, pBNB, pDCR, pXLM, pXMR, pLTC, pADA, pDASH, pZEC and more can be added, but they have to large cap projects so there is a stable exchange price and trading liquidity. See the full list here.
As for the reasons to use PegNet, it has low fees - $0.001 USD - and is controlled by the user. Also, there is no liquidity limit - you could convert $1,000,000 of pGOLD to pETH and it would not change the market price. So it is like an unlimited OTC controlled by the user.
Partners, partners in every project play a huge role as backup and support at every start of a project/company, so my question is: what role do your partners play in the ecosystem of PegNet and what benefits do they have for being a partner?
Anyone can join the PegNet community. People can mine, trade, hodl tokens, and they don't need anyone's permission. I'm mining and trading tokens. I'm a member of the community because I believe in decentralized and proof of work mined stablecoins. You can view the Twitter page here.
Can you share a bit about your team as well? How are you guys able to execute so well on such a technical project in such short time?
PegNet has volunteer developers all over the world in North America and in Europe, and miners in Asia and the rest of the countries. We can move quickly because we don't have to build the blockchain, the devs can just build on Factom/Ethereum has already has all the infrastructure, wallets, exchanges and so forth. Most of the community is active on Discord. You should join and check it out. Also the first exchange is live trading PEG on ViteX, a decentralized exchange.
What are the major setbacks you have faced when you and the team were starting the project?
Well the biggest challenge was to bootstrap the mining. That is why I joined the PegNet community to help with that aspect first. That secures all the prices on the system. Now there are more than 40,000 computers worth of hashpower and the bootstrapping has been successful. The next challenge is to see the tokens listed on lots of exchanges. We hope the community will help us with this too.
Stay tuned to this blog hear more news about PegNet.