What is Filecoin? Why did it gain such momentum?

What is Filecoin?

Filecoin (Token FIL) is a decentralized storage network based on IPFS. It is the only incentive layer on IPFS and a token issued based on blockchain technology. At the same time, Filecoin is a decentralized protocol; anyone can sell or buy unused storage space on the network.

Filecoin was born extraordinary. Investment institutions include Sequoia Capital, DCG Group, A16 Capital, Stanford University, and other internationally renowned institutions. The founder, Juan Benet, has obtained a master's degree in computer science from Stanford University and is an entrepreneur.?Filecoin's founders are well known and renowned for their work.

Back in 2014, Juan Benet founded Protocol Labs with a few friends.?In January 2015, the Protocol Labs released a project-?IPFS?(InterPlanetary File System), which is the abbreviation of InterPlanetary File System, which aims to establish a network transmission protocol for distributed storage and sharing of files.?Its vision is to replace HTTP, making Internet access faster and more secure.

IPFS is a point-to-point, content-addressed hypermedia transmission protocol. The files in the IPFS system are fragmented. Each fragment is hashed (complex mathematical operations which is similar to Ethereum), and finally has a hash value. All the fragments of the file are hashed together to get the hash value of the entire file. Moreover, the public can browse the complete file directly through the final hash value.?File fragmentation does not exist on one server but on many servers.?Without a centralized server, hackers cannot accurately attack. Multiple servers can withstand a higher number of magnitude user requests to load pages faster, and the destroyed data of a single server can be recovered from the rest of the servers, ensuring permanent preservation of information.?The IPFS protocol is based on content addressing. It has the advantages of being more secure, at a lower cost, and more user-friendly than the HTTP protocol.

Therefore, as soon as the IPFS protocol was launched, it gained a high degree of attention.?

In 2017, Protocol Labs created a decentralized storage network. Filecoin is based on IPFS, which aims to establish a decentralized, high-efficiency infrastructure network.?It is a crowdfunding project based on IPFS, and can also be considered as the incentive layer of IPFS.

Many people can’t distinguish the relationship between IPFS and Filecoin, which is like blockchain or Bitcoin. Blockchain is a technology, and Bitcoin is just an application of this technology; in the same way, IPFS is also a technology. Thus, Filecoin is the application.

In the same year, Filecoin carried out compliant token financing on its self-built platform and received $205 million in funding within half an hour. Filecoin raised a total of $257 million,?becoming the cryptocurrency with the highest financing amount at the time.

Initial Difficulties

Filecoin is a decentralized storage network.?Miners use hard disc resources to mine, thereby obtaining FIL tokens as incentives.?In other words, Bitcoin uses CPU computing power for mining, and Filecoin uses hard disc mining.

Unlike Bitcoin PoW (Proof of Work) mining, Filecoin is a valid proof of storage.?Therefore, the Filecoin miner doesn't focus on memory capacity, but rather the more data stored, the more it can mine. Filecoin is based on the concept of Proof-of-Spacetime which ensures storage miners are continuing to store unique data for the network. Eventually, it means that a miner guarantees that it is spending a certain amount of space for storage.

The project raised over $250 million in an initial coin offering in 2017 and planned to launch by mid-2019. Despite fundraising time, Filecoin did not launch the testnet until July 2020. The project was first described back in 2014 as an incentive layer for the Interplanetary File System, a peer-to-peer storage network.

To meet the upcoming mainnet, various Filecoin mining manufacturers/mining and pools, have all geared up to begin Filecoin's operation.

As the mainnet date approached, the price of FIL skyrocketed on the 31st of March 2021, reaching $191. In the recent crypto crash also begun to skyrocket. According to data from coinmarketcap, the price of FIL at the beginning of the year was only $21to $26.

According to Filscan data, the network computing power increased to 1.73 PiB in the past 1 hour, and the network computing power increased to 41 PiB in the past 24 hours.

The output of Filecoin's entire network in the past 24 hours is 371,950 FIL. The daily output of coins is not enough to increase the mining mortgage demand for computing power. The difference between the two is 80,000 FIL, which is more than 18.35%. The current difference is mainly supplemented by the amount of FIL released by SAFT+Foundation+Team+Ecology, which is about 648,000 FIL per day.

Conclusion.

With regard to the Filecoin project, proponents argue that Filecoin has revolutionized the way it stores data. Filecoin has created new possibilities for the Internet; while opponents argue that Filecoin is essentially a distributed storage project, which does not have a true "purpose of existence" for long term sustainability.

From the perspective of the long-term development of the project, Filecoin designed an economic model that helps protect algorithms and the integrity of user data. But in a world where the network does not have real data inflow and user demand is virtually zero, Filecoin's value is most directly reflected in the number of bodies involved in mining projects.