Filecoin might be the most intricate entity the blockchain industry has ever brought to market. Although Filecoin has been quiet this whole time, it is currently wrapping up a very dynamic incentivised testnet called “Space Race.”
There are 1.5 million FIL tokens allotted to testnet participants. However, it isn’t easy to evaluate the value of that offer when the company has declined any discussion that might inform FIL’s underlying price. Nevertheless, the testnet has been rather popular.
Once the project is finalised and released, users who want to store their data on the decentralised system will have to buy that capacity using Filecoin (FIL).
Now, what is Filecoin (FIL)?
Filecoin is a decentralised peer-to-peer storage network that lets anyone access, store, retrieve, and host digital information. The data can be split up and stored on different computers worldwide, so investors won’t have to trust a single company’s security for their data wholly.
As an economic incentive in ensuring files are stored securely over time, FIL tokens are the currency used to pay for these services. These coins are classified as “utility tokens” that do not pay out interest or part with an ownership stake.
Filecoin (FIL) was released and developed by Protocol Labs in 2014 when Juan Benet published the whitepaper, “Filecoin: A Cryptocurrency Operated File Storage Network.” The proposal was about a blockchain network similar to Bitcoin, but where nodes in the network can store data guaranteed by a proof-of-retrievability component.
Over the past decades, the way that data is stored and accessed has changed. The business industry went from on-site storage with companies having huge server rooms to remote data storage warehouses and more varied cloud storage across the world. At present, most businesses use a combination of both. Likewise, consumer data storage has also changed with an increased reliance on cloud storage.
Customers usually pick one cloud storage provider and stay with it for years, leading to hindered competition. Filecoin lets customers who plan on purchasing storage navigate the best deals on the spot without regard to who the storage provider is, creating a more competitive cloud storage market.
There are “storage miners” who are essentially responsible for storing data on the Filecoin network. On the other hand, “retrieval” miners are another variety of participants. They aid in the data retrieval process between clients and storage miners. Retrieval miners then receive a certain amount of FIL for their services.
Filecoin uses end-to-end encryption, so storage providers don’t have access to the decryption keys. As it is a distributed system, all files are kept safe over multiple storage locations. It also has a feature that lets its participants earn rewards for storing nothing, referred to as committed capacity.
It’s space that has nonetheless received the Filecoin cryptographic treatment and is being logged and rewarded on the system. Organisations and individuals who have unused storage space can vend it on the network. By sharing their resources, they are reimbursed in FIL.
Different sellers offer the same item (in this case, storage) at likely different prices to benefit in the end. At times the investor might not have enough storage for all their data, sometimes they’ll have excess, and they can sell it. That’s the promise of Filecoin.
Filecoin presents a grand resolution to worldwide file storage and retrieval inefficiencies. It also places the power in the customer’s hands, which is less expected to be bound by contracts with big companies.
Filecoin is already out in the wild with its live mainnet and polished set of tools. Its ecosystem’s success will depend on its usage within the cryptocurrency community and whether it can attract new people into the world of Web 3.0.
As its website says, Filecoin is a decentralised storage network designed to store humanity’s most important information.