Honduran blockchain project suffers setback

Translation: Height difference signal is full

Blockchain ledger startup Factom has commented on its controversial partnership with the Honduran government, after announcing that its proof-of-concept work had stalled.

In a recent blog post, Factom CEO Peter Kirby outlined the difficulties his company has encountered in working with governments around the world to implement land title registry projects, and he also addressed questions about the effectiveness of such initiatives.

The controversy began earlier this year when Factom was rumored to be working with the government of Honduras, a Central American country that wanted to rely on distributed ledger technology to ensure smooth land title registration.

Since Reuters reported on the development in May, blockchain technology advocates have widely cited the development, but the government has never publicly commented on the project.

Kirby noted:

"We helped (journalists) to get in direct contact with Honduran officials, who did not comment on the matter for their own reasons. In addition, those news organizations asked for our permission before broadcasting the news."

Factom has responded to accusations from other blockchain communities that it allowed rumors to spread and misled the public, leading to overly optimistic views of the company’s success.

Get into a quarrel

The comments echo a statement sent to a Factom Skype group earlier this year in which one of the company’s founders suggested the company may not have reached an agreement with the Honduran government.

Paul Snow, a founder and chief builder of the company and a representative of the transaction, claimed that the press release did not accurately report the company's cooperation with the Honduran government, and the project was then deadlocked for "political reasons." Snow believed that the report "misrepresented" the company's information, and that the Honduran government seemed to "want" the false information to remain unchanged.

Snow’s comments were seized upon by detractors who suggested that Factom had deliberately created confusion about the nature of the contracts in its bid in order to attract a lot of crowdfunding, an allegation that Factom’s Kirby denied.

Kirby said Factom received a letter of intent from the Honduran government and then began registering land titles in La Ceiba, Honduras’ fourth-largest city, and then uploading the records to the Bitcoin blockchain. Kirby also pointed out that although Factom wants to expand the project to all of Honduras, the company has never mentioned any other business beyond the proof of concept.

In an interview with Coindesk in August this year, Kirby said:

“The project is moving forward, and at some point we will certainly be sanctioned by the Honduran Congress, and then a new company will come in to finally complete the land registration process. We must first pilot it on a small scale, and then expand it.”

David Johnston, chairman of the Factom Foundation, agreed with Kirby’s point of view in an interview at the time.

He said:

"We are very open, the project is progressing step by step, we are building the plan, and we have agreed to do a pilot project first."

Vague evidence

Factom provided documents that provide updated details of the contract for the project, including emails between the company and Honduran government officials and a non-binding letter of intent from the Honduran government, which hopes the two sides will work together on the project.

Company representatives insist that Snow's comments were taken out of context, and Factom says the Reuters report is accurate. Kirby says Reuters should have done a better job of explaining the complexities of the contract.

However, in a new statement, Kirby explains why the Honduran government has remained silent on the Factom blockchain project.

“The letter of intent signed between the Honduran government and Factom/Epigraph includes some non-disclosure language, so we have to remain silent on the business model and non-technical details of the project,” Kirby said.

As of press time, the Honduran government has not responded to the reporter's request for further clarification.