Filecoin is a blockchain project that set its focus on the decentralization of storage. In this article we will take a closer look at this protocol and how they aim to change the world of online storage.
What is Filecoin?
Filecoin is a decentralized protocol that allows everyone to rent out spare computer storage space. Similarly, anyone can purchase network storage.
Allowing anyone in the world to join the network can result in a massive amount of data storage. It will be required to meet the increased demand as more systems become computerized.
The thought behind Filecoin is that if they build it, the people will come. And they are building it.
Protocol Labs, led by Juan Benet, a Stanford educated computer scientist and engineer, is building the network and it is no small undertaking.
The goal? To build a decentralized storage library for the world’s most important information.
What are the benefits?
Filecoin promises several benefits over centralized data storage solutions.
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- Cost – By creating a larger free market for data storage, the price should fall.
- Scale – Connecting millions of computers around the world will result in a massive storage network.
- Filecoin makes use of existing resources rather than building new storage computers.
- While Dropbox and iCloud have been hacked, a decentralized network eliminates a single point of attack, making it more difficult to compromise.
Are there any drawbacks to Filecoin?
Yes, Filecoin may have the following issues:
- Speed – Rather than accessing a single server, it must access multiple servers to piece together documents as needed. This is dependent on the availability of servers and the speed of the Internet.
- Dapp – By processing transactions with the Filecoin cryptocurrency, it creates a barrier to entry because someone must purchase another coin and exchange it in order to use the service.
Is Filecoin secure?
It is dangerous to save your documents on someone else’s computer. However, Filecoin fragments data, similar to shredding it, so that no one can piece it together. It does, however, understand how the data fits together and rearranges it when requested.
This means that the host cannot simply hack the document and gain access to the user’s files. If they attempted to hack it, they would discover only a stream of meaningless data.
Who are the competitors?
Filecoin isn’t the only company tackling decentralized file storage; a number of others have already begun.
Siacoin already has over 360 storage providers with a total capacity of 2.3 petabytes (2,340 terabytes). Its cryptocurrency is currently available for purchase on cryptocurrency exchanges.
Storj launched its Tardigrade decentralized cloud storage service in March 2020 and claimed 80 petabytes of storage capacity across its network as of October 2020. Its cryptocurrency, STORJ, is also operational.
Mining Filecoin
There are three types of Filecoin miners. Storage miners are in charge of storing data on the Filecoin network; retrieval miners are in charge of retrieving files; and repair miners are yet to be implemented.
Recent advancements
The Filecoin mainnet went live in October 2020, and the amount of storage available on the platform has grown exponentially since then, recently surpassing the 2.5 billion gigabytes (2.5EiB) mark—enough space to hold more than 10,000 copies of Wikipedia.
Since its launch, the FIL token’s trading volume has gradually increased as a result of major exchange listings and increased integration into the Ethereum DeFi landscape via a Wrapped Filecoin token.
- The Filecoin Frontier Accelerator—an initiative created by LongHash Ventures and backed by Filecoin—unveiled 11 startups in early February 2021 that will participate in a 12-week accelerator program and receive $20,000 in grant funding.
- Pricing for Filecoin’s storage services is determined by free competition and changes in supply and demand, but it is generally regarded as competitive with centralized cloud storage offerings.
Final thoughts
Amazon and Google make boatloads of money from cloud storage. This demonstrates that the market is in high demand and perhaps ready for disruption.
Customers who choose to rely on decentralized services may find themselves saving a significant amount of money. This money would also directly benefit the economy by going to individuals and small businesses, potentially having a significant positive impact on people’s lives.
Filecoin is a novel solution to the problem of online storage. By utilizing blockchain technology and distributing files across many different computers, Filecoin offers a secure and decentralized way to store your data. If you are looking for an alternative to centralized storage providers like Dropbox or iCloud, then Filecoin may be worth investigating.
Filecoin hit a high of $120 earlier this year and currently trades at $8.41 with a market capitalization of $1.75 billion.
Disclaimer: the author holds FIL token as part of a cryptocurrency portfolio.
Jay Speakman is a technology writer based in San Francisco, California. He writes on the topics of blockchain, cryptocurrency, DeFi and other disruptive technologies. Clients include Avalanche, Be[in]Crypto, Trust Machines and several blogs devoted to blockchain gaming. He will not rest until fiat currency is defeated.
