A Conversation with Factom CEO Peter Kirby and Ancun Zhengxin CTO HaiHua Shen [Audio + Transcription]
Last month, blockchain technology company Factom, Inc. announced a partnership with Chinese data notarization company Ancun Zhengxin. The goal of the partnership is to incorporate blockchain technology into Ancun’s services to customers. The permanence of transactions that Factom’s blockchain offers is a service needed in China, where trust between parties is low.
I had the pleasure to speak with Peter Kirby, CEO of Factom, to discuss the partnership in more detail. In the audio record below, you can hear our discussion on the partnership with Ancun and how notary services are handled across the globe.
Below you can read the full transcription of our interview, followed by a couple of questions that I was able to ask HaiHua Shen, CTO of Ancun, as well and her answers to those questions:
Carlo: How did you first get into contact with Ancun Zhengxin?
Peter: Our CTO Jack Lu, one of the Co-Founders of Factom, is native Chinese from outside of Shanghai. He went to ‘’ University… Jack is in his forties, so all of his friends that went to school with him are now running companies and in sort of higher up [positions], so he’s well-connected in that world. So it was a personal introduction from one of Jack’s colleagues to directly to the head of Ancun.
Carlo: Can you tell us more about the partnership with Ancun and how Factom’s going to accomplish their goals?
Peter: Let me set a bit of a stage for you because in the Western world – the U.S., Europe – we have business that works because of trust. In the developing world – in China and throughout Latin America, other places in the world – trust is very low. It’s hard to trust your counterparty, it’s hard to trust the contracts, the court system, [it’s] even hard to trust the government.
This is the backstage for why Ancun has been an incredibly successful company over the last several years. What they do is a digital notary. Let’s say you and I sign a contract together. We can digitally notarize it using Ancun’s software platform and that taps directly into the national notary, so it basically records that contract and timestamps it for other people to look up in the future. [It’s] a really, really good way to [do] business. In the U.S. our notary system is kind of a joke – somebody in the local bank puts a stamp on it and you’re off to go – but in a world where there’s low trust that’s really important.
What we’re adding to Ancun’s offering to customers is a blockchain backend. Now imagine that timestamp [from our deal] is recorded not just in Ancun’s software but also back fund watched. Essentially that notarization, that contract, can be permanent in this distributed global network that nobody can chance. So [it’s] really an exciting opportunity. Factom is very useful for them – they’ve requested would have me do 100 million entries… bitcoin can do seven transactions per second, right, it would take most of our lifetime to do 100 million entries. With the Factom toolset, Factom is just the data layer that sits on top of the blockchain and lets you do 100 million entries. [It’s] very, very interesting opportunity to take the digital notary system that they built and give it blockchain permanence.
Carlo: Can you explain how it feels to have the partnership finalized?
Peter: I mean it’s great. Whenever you work on these projects… we’re always thrilled whenever we can announce a partnership that, you know, moves forward toward much more practical things like the blockchain. [Ancun] have been absolutely wonderful partners. Once you get through the corporate signatures and the PR sign-offs and all that kind of stuff they’re like “can we have it now? How about now?” So clearly they’re really excited about this technology.
That’s kind of the way this blockchain stuff goes. You spend six months with any customer explaining – “let me teach you what a blockchain is, let me teach you what it’s for – and there’s a point where, say, a CTO or Chief Innovation Officer says “oh my God I gotta have it!” So we’re gonna see a lot more of that.
Carlo: It’s interesting that you brought up the notary [system] here. It’s something that seems we almost take for granted, that idea that we can just walk into a bank and just have something stamped and it’s done.
Peter: I’ll tell you a funny story. I was living in a duplex and my wife needed something notarized and I was like “you know, my neighbor is a judge, I’ll bet you he might be a notary.” So I knock on Jim’s door and [I say] “hey Jim, any chance you’re a notary?” He thought about it for a second [and says] “You know, I am!” He dug around in a drawer and pulled out his notary stamp, which I’m sure he hadn’t even like thought about in three years – and notarized the particular thing that Pam needed. We put it in the mail and off it went. But… that’s the notary system in the United States. You and twenty bucks and a couple of classes [are needed] to certify the most important documents in people’s lives. It’s very very different than the notary system in, let’s say, northern Europe or Germany or throughout Latin America, where notaries are the top, let’s say ten percent of attorneys and it’s a very sort of select group. They use special pieces of paper that cost a couple dollars apiece. They write up contracts and basically sign off on it. So it’s a ceremony and it’s a couple of people who control that. That’s how the notary system works through a lot of the world. In China it’s kind of similar to that except there’s a government piece of notarization and that’s what Ancun’s platform does, it basically gives you a digital notary that’s passed into the Chinese system.
Carlo: I also know a few months ago you announced the partnership with Microsoft Azure and I wanted to know if you could speak to that as well.
Peter: Microsoft has been really innovative in delivering [what] they call blockchain-as-a-service… [it] is kind of their idea that they can offer on their Azure platform these tools that allow you to build blockchain stacks of technology just like you build stacks of cloud services and that kind of thing. Technology has always been built on stacks.So Microsoft, [Azure] was a very interesting project on their end. They’ve been amazing at spreading the word that blockchain is a toolset that you can go build any interesting thing on top of. They reached out to us very early because Factom is a very useful toolset for anything that’s data related. We were able to put the Factom toolset onto the Azure platform. Today you can fire up a Microsoft cloud setup and Factom in the backend, be up and running… we think that’s super exciting.
Carlo: Overall, between Microsoft and now the partnership with Ancun, is this just the beginning of the kind of partnerships you’re looking for? Do you have any set plans over the next year in terms of expanding with other companies?
Peter: There’s a lot of projects on Factom right now that we can’t talk about because of NDAs. Half of the corporations in the world want to blast from the rooftops that they’re working on blockchain and the other half want to secretly work on tools and say, in a year or two, “look, we’ve been on blockchain for all this time.” We certainly have customers that are the latter. The whole point of Factom is [that] we’ve introduced this public utility, anybody can write to it, it’s a useful tool for the world. And then we do corporate engagements to built interesting sets of tools and services on top of our Factom public utility. We’ve been hunting for and talking to big enterprise software for a year, year-and-a-half, and we’ll have some projects that will be live over the next year that hopefully we can talk more about.
Carlo: Was there anything else you wanted to add, either on Ancun or in general?
Peter: Let me just build a little bit on that thing I said at the beginning in China where there’s a lack of trust and throughout the world. There’s an incredible community of blockchain enthusiasts in China that have this fundamental belief that you can trust the math instead of the people. I think this is a very sticky message that everybody who’s thinking about what you can do with blockchain technology really needs to internalize: that if you got a mathematical proof that tells you exactly what happened when, and nobody can change it, that’s a powerful, powerful idea in a country or in an environment where trust is limited. That’s a sticky message in Latin America, that’s a sticky message in Eastern Europe, that’s a sticky message in China. Trust the math, not the people. As we as an industry build tools that allow you to do that, wow. What an incredible opportunity for business people in an environment where there’s limited trust.