Filecoin is a distributed cloud storage network made up of a large number of diverse storage providers and developers.
What is Filecoin?
- Filecoin was initially created with a vision to provide a robust, open, and fair internet by developing a distributed data storage mechanism accessible to everyone. Filecoin decentralized data storage market enables various types of data exchange such as company files, private data, videos, dapp data, contract data, public datasets, security archives, etc.
- Data is stored reliably and securely using Proof-of-Spacetime and Proof-of-Replication mechanisms. Proof-of-Spacetime verifies that the entirety of a file being stored are unaltered over the agreed-upon duration, while Proof-of-Replication verifies the agreed-upon number of copies of a file that are being stored. Further, the global Filecoin blockchain verifies proofs and automatically takes corrective action when needed.
- Filecoin network currently already stored copies of several important world data including Wikipedia, Project Gutenberg, OpenStreetMap, gnomAD, and OpenAQ to make the data stays secure and open to anyone.
- The way Filecoin works is by gathering storage from storage providers at any amount across the globe, and offering them to the users that need to store data. The users pay to store data at specific levels of redundancy and availability, and storage providers earn payments and rewards by continuously storing data and cryptographically proving it. This mechanism utilizes idle or excess data storage devices that are unused and available across the globe to be able to be used and provide value.
|Total Token Supply||N/A|
|Current Circulating Supply||See Coinmarketcap|
|Market Capitalisation||See Coinmarketcap|
|Token Creation Date||September 2017|
|Can it be mined?||Yes|
Who is behind Filecoin?
The Filecoin concept was first presented by Juan Benet at the Silicon Valley Ethereum Meetup – October 22nd, 2016. Benet studied computer science at Stanford University and founded Protocol Labs in May 2014. Protocol Labs is now known as the company behind both IPFS and Filecoin.
What is the purpose of Filecoin?
FIL coin is used as an incentive mechanism for hosting data on the Filecoin network. Instead of running a mining rig on a proof-of-work type of mining, Filecoin users rent their storage capacity and cryptographically prove it in order to get rewarded with FIL. In addition, FIL is also used as a payment mechanism for the client who would like to store data on the Filecoin network.
- Filecoin and IPFS technology is widely adopted in the current blockchain ecosystem especially following the growth of NFT.
- Filecoin can be considered as the market leader and the pioneer in the distributed data storage ecosystem.
- Filecoin has recently introduced the Filecoin VM (Virtual Machines) that will allow smart contracts to be deployed on the Filecoin network. This could expand the use case of FIL coin and increase user adoption of the network.
- Filecoin is creating a launchpad for gaming and the metaverse projects.
- In general, large data storage is a massive technology that is sophisticated and complex. There are a number of research projects Filecoin researcher is currently working on to improve the technology performance, security, and capacity. Considering the complexity and the size of the network, there is a potential vulnerability point that could lead to some potential technological security risk.
- Traditional centralized cloud storage services have been widely adopted since the last 5 years and there is no guarantee that Filecoin technology could disrupt or grab a significant market share consistently over time in the coming future. However, investors need to note the growing adoption of Filecoin technology and make their own judgement about this potential risk of product substitution.
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