Filecoin – The new decentralized cloud service

Filecoin is a decentralized cloud service for public data with smart contract storage opportunities

Filecoin is a B2B and B2C decentralized storage network whose goal it is to reinvent the public data storage market.

It was invented by Protocol Labs, an open source laboratory. The first whitepaper was published in July 2014 by Juan Benet who is an computer scientist.

Filecoins wants to decrease the volume of big players in the currently centralized data storage market. According to Filecoin, these big players are the ones who dictate storage prices, jurisdictions and take the liberty of choosing which exact customers they want to provide with their services.

The network mainly offers an open market with a completely new storage and economic model, with great use for public data like open access data, historical archives, websites, games, insurance and many more. In this new economic model, the prices for storage will decrease when supply and demand grows. So we are talking about an incentivized data storage market, which is not limited to any location worldwide.

But that is not the only thing Filecoin is offering. Since 2018 they also work with smart contracts, which allows the users to do more than just simple put and get requests in data storing. Now users can use file contracts and generic smart contracts to build more complex programs based on Filecoin.

How it works

The concept starts with a customer who wants to store files or other data. In the following step he will look directly into the Filecoin network, to see which Miner offers to store the data in relation to a predetermined price.

After the customer and the miner come to an agreement, the deal is made. The customer will send their data directly to the miner, who then stores it for a fixed period of time.

For the storing, the miner will receive the deal storage fee and additionally get the chance to win mining rewards.

Because the data is spread to where the demand is growing, miners can see which data has a growing or high demand, so they can host it too. This helps to bring the files closer to the users who are requesting it. So if a client searches for a special file, he can look for the fastest and most affordable miner who stores it.

Mining Filecoin

Filecoin miners take direct control over our digital future by helping to decentralize and democratize the way data is stored currently.

They add storage to the Filecoin ecosystem and get paid in return. The more storage a miner adds, the more Filecoin he will receive.

For miners its relevant to have low latencies and high bandwidth connections to deliver data as fast as possible.

Security – the most important point in data storage

Filecoin uses IPFS, a protocol and peer-to-peer network for storing and sharing data in a distributed file system, which also allows users to not only receive but host content.

So the miner has to proof his security to the network. This happens through cryptographic proofs of security directly in the network.

This system offers a high data immutability because it would be nearly impossible that two files will have the same hash.

And there are more security checks:

  • Proof of spacetime–verifies that the file will be stored over the agreed duration
  • Proof of replication–verifies how many copies of a file are being stored
  • Verifiable action–the Filecoin blockchain automatically verifies proofs and takes corrective action when needed

Future outlook for Filecoins chart performance

Filecoin launched on mainnet on Tuesday 13th, and started trading at nearly $30 USD. In just one hour, the price tripled to approx. $100 USD. Related to a massive sellout on the Huobi exchange the price broke down to approx. $50 USD. Since then, the price dropped continuously and is now, nearly one week later on 19.10.2020 at 20:00 CET, trading at approx. $32 USD.

FIL/USD price chart on tradingview
Filecoin’s price action so far (FIL/USD) – Tradingview

In consideration and regarding to Filecoins innovative network, the massive potentials and especially the Liftoff week this week, it would be no miracle if Filecoin gains in popularity. So maybe, and with a little bit of luck, the price is going to rise in the near future due to more popularity.

Jan Lammers

© Cryptoticker
scroll to top