Filecoin (FIL) is a decentralised file storage
Think of how much you’re paying a month to file storage services such as Google Drive, iCloud, or Dropbox. Yes, it isn’t that much. But Filecoin (FIL) is here to make this cost even lower, while giving you greater storage, higher security, and even insurance against lost copies.
How? A decentralized storage on the blockchain. Yes. This means that people (miners) on the blockchain “rent” you computing power to help store your files on the blockchain. In turn, they get paid in FIL, and you can retrieve, distribute or store the data by paying. Prices are extremely competitive, since this is an open market. And these crypto costs would definitely give the centralized storage providers now a run for their money.
As a quick intro, here are the benefits of FIL:
- Decentralized server: data stored on the blockchain cannot be hacked (unlike centralized storage providers)
- No government or other body will have the authority to censor file exchange (could also be a grey area, as with all decentralized applications)
- Everyone can become a storage provider (storage miner) or someone who helps deliver files to clients (storage retrievers)
- Open market means lower prices
- Filecoin performance is independently checked by the network and publicly verifiable
- Insurance: in case a file is lost, the user will be refunded automatically by the Filecoin network
How does FIL work?
Users who are looking to store their files on the blockchain will go to an open market and look for miners who are willing to do it for them. Filecoin is maintained by miners who provide computing power to perform the computation that makes it work. They get paid for making storage space available to users. Filecoin users, in turn, pay these miners for storage, retrieval or distribution of this data.
The currency used in these transactions is FIL, Filecoin’s native cryptocurrency.
Is it safe?
The Filecoin network is peer-to-peer, which means that your files are split up and stored around the world on different computers. This is less susceptible to hackers who target the big data centers run by corporations.
Filecoin's cryptographic hashing ensures that your data is encrypted over several levels, and cannot be accessed by anyone else. For added security, users cannot move files to different nodes and store the same file fragments at multiple points in the network simultaneously. Since no one has your complete file, no one can access it except for you.
What’s important to note is that Filecoin doesn't have control over its network, since it’s decentralized. If anything goes wrong with the configuration of nodes or access to files, there isn't much you can do about it because there isn’t a customer service hotline you can call.
One of Filecoin’s main drawbacks is its lack of user-friendliness on its platform. Currently, only those who are already well-versed in cryptocurrencies find it easy to navigate through the network.
How do miners earn FIL?
To become a storage provider, every miner has to go through Proof-of-Replication and Proof-of-Spacetime.
Proof-of-Replication (PoRep) gives evidence that a miner has truly stored the number of copies of data it claims to hold.
Proof-of-Spacetime (PoST) shows that a miner has stored the data over an agreed period of time.
Only with these two conditions satisfied can a smart contract be executed. Think of it like a receipt you get when you send your phone to your local repair shop, which says that you can come collect your phone in 3 working days. Without this guarantee, you wouldn’t dare to leave your phone with them, let alone pay them anything.
Retrieval miners are another group of people who are paid by users to retrieve data and to perform services that speed up the transmission of data, such as caching or participating as a node in a content delivery network.
Should I invest in FIL?
If you want an investment opportunity that is still in its beginning stages but could potentially be huge, FIL might be the right coin for you.
Large centralized providers such as Google or Amazon may be pressured by authorities to change, remove, or simply discontinue services to particular users. If this happens, the general population relying on cloud storage would trust them less and start looking for decentralized alternatives such as FIL.
The total amount of FIL that will ever be mined is capped (there is a total value of only 2 billion), the token’s value is very likely to increase. At the point of writing, the total number of FIL in circulation is close to 300 million. While the limited supply must be a draw, we also have to take into consideration if more users are going to be interested in peer-to-peer decentralized storage, which will push the demand up.
Want to start investing in FIL? Start trading today on Bit.com and Turn On The Future.