In this guide, you will find everything you might need to know about Filecoin, a DeFi project that has been running for three years and whose native token grew 30x in just three months.
Filecoin - is file storage networkbuilt on blockchain that uses a decentralized network to transform cloud storage into a pseudocode marketplace. As a Decentralized Financial System (DeFi), it is a new service in the digital currency sector. Unlike most centralized systems, it provides a seamless transaction process without the need for a third party system.
Most centralized systems are usually not as secure or encrypted as decentralized exchanges, so they suffer millions in losses every year. Given the speed at which data is generated, with this year's data surpassing the data mix over several thousand years, it makes sense that the need for additional storage space continues to grow.
On the service, users pay a certain amount to store their files. Users can not only generate income by mining Filecoin token, but also provide other users with hard disk space to store files and documents. The transaction is not managed by the Organization, it only provides a platform for multiple users to meet, provide and borrow space for files.
While it is still under development, the unforeseen coronavirus pandemic has slowed progress on the project, which was officially launched on August 7, 2020. However, there were some stakeholders testing the service.
Filecoin Network: History
The Filecoin network was launched in 2017 as a much needed storage solution. Token sales held in October 2020 resulted in the highest ICO recorded to date and raised over $ 250 million, with the first $ 150 million raised in less than an hour. Prior to this, pre-launch sales were undertaken that raised over $ 50 million for the institution from 150 different investors in the project, although the tokens were sold at a three-quarters dollar discount, which drew public criticism; especially given that only those earning at least $ 200 a year gained access to participation.
At launch, 70% of all tokens available for issuance were allocated to providers of platform space as a reward, with half of the remaining amount going to the development team and founder, and the other half being split between investors and institutions. foundation in a ratio of 2: 1.
The Filecoin network works with IPFS for the registration aspect of the institution; and the two systems have several similarities and differences, with the main difference being that IPFS does not charge users a usage fee, nor does it generate revenue for the user. Filecoin charges a fee, but it can also be used to make money on the platform, usually in the form of the digital currency of the home token.
There are other well-known platforms in the same line of business with petabyte networking capabilities, but Filecoin has the expectations and resources available to surpass even Storj and Sia. Both of them currently boast 100 and 2 petabytes of network space, respectively.
Using blockchain in the service, users can contact miners, negotiate a deal and ensure that their information is stored properly, given the transparency of the transaction. Miners who provide space to those who need it not only receive money for each person occupying their storage, but also receive a reward from the service for providing additional space on the Internet.
How does Filecoin work?
During this process, one user contacts another to pay a certain amount to store the information. The price to be paid is usually determined through open selection, where all space providers try to compete with each other for the lowest rates in order to charge the user for storing a certain amount of data.
Two types of transactions can be carried out on the platform: storage and search. In the first case, during storage, the provider will have to provide evidence in parts at earlier discussion dates that the stored information is not damaged. Payment will be made on time when the owner wishes to receive the specified information. In the latter case, the methods of negotiating are practically the same, with the difference that payments will be made at the agreed time, and not at the end of the contract.
This is beneficial to both parties because miners get income from users and also get rewards from the online service, while users benefit because the amount payable is usually less than what centralized platforms like Apple Cloud and Amazon Web Services charge for storage space.
To ensure transparency and avoid fraud, space providers must periodically provide the service with proof that they are storing data provided to them by users. Once miners can provide substantial evidence of their activities, they are entitled to sublease more space and receive their payment.
This evidence must contain the following:
- Proof of data receipt and encryption to prevent duplication by another storage provider. Evidence must be presented at the beginning and at the end of the contract.
- Evidence that the data is still securely stored must be provided periodically, depending on the type of contract, with some having agreed dates and others being completely random.
Failure to provide the necessary evidence will result in a variety of penalties ranging from reduced fees to complete termination of the contract.
Executing messages and transactions on the platform requires a load on its resources, so a commission is charged for each message and transaction. For messages, the fees charged by both the lender and the borrower for custody are fixed and usually very minimal, while for contracts this is not entirely the case.
Depending on the size of the data and the duration of the contract, fees are charged by both sides of the network, with more from the user, as some of them will go to reward the miner, while miner bears a smaller commission for each payment received under the contract. The reward received by space providers, usually in the form of the native digital currency of the Filecoin network − FIL.
It is quite easy to buy FIL as it is available on several popular decentralized exchange platforms. They can also be stored in the service's wallets or other popular wallets that support it.
Conversations between people and miners on the service platform are carried out through peer-to-peer communication over secure channels. Data transfer between buyers is carried out through two nodes: storage and retrieval nodes:
Storage nodes are common to most storage platforms. The service rents extra space on people's hard drives. Using this method can be quite tricky given the limited disk space; but the service cannot start using data centers because that would mean a centralized system.
Extraction nodes are specific to Filecoin. They have high bandwidth and should be located close to other nodes on the server. They are designed to operate at high network speeds, especially when multiple nodes are active. They act primarily as support for storage nodes.
Hack and predictor Aviator
Cryptocurrency is the future of the world of technology and finance, so even more people are eager to get into the next big thing that can generate income.
The Filecoin network was a project that had been worked on for three years prior to its official launch. Most centralized exchanges are predicted to lose popularity with their users, creating an opportunity for similar platforms to gain shine. As more and more people rent out warehouse space, the value of the FIL token will only grow. Going from $ 1 to almost $ 30 in three months is very impressive.
It should be noted, however, that although the forecasts are positive, they may decline for unforeseen reasons, so those who are not at low risk should not invest in a new business.