Storage is a modern world problem. And we’re not just talking about offline, it’s online too. Data
like NFTs, media files, transactions,
blockchain state – all require increasing amounts of storage as networks and human activity grow.
So, Enter Filecoin – a blockchain storage solution with a decentralized twist. Find
out why Filecoin was one of the most highly anticipated launches with the biggest token sale
in history of over $200 million in 2017, and whether or not, it lives up to the hype.
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Filecoin is founded by Juan Benet of Protocol Labs. He is an American computer scientist
who also created the IPFS or Interplanetary File System, which the Filecoin network is
built on. Think of IPFS as similar to the popular BitTorrent. It is a peer-to-peer network that lets
users store and share data in a decentralized way. But, unlike IPFS which is free to use,
Filecoin introduces its native $FIL cryptocurrency to incentivize network usage.
Juan Benet compares Filecoin to something like Airbnb, saying:
“There’s a ton of storage in the world that’s not getting used. Think of it like Airbnb.
You had people with rooms that weren’t being used; Airbnb built a marketplace for them.”
During its initial coin offering in 2017, Filecoin attracted massive attention,
collecting a record-breaking $257 million from high-profile VCs including Y Combinator,
Andreeseen Horowitz, and Winklevoss Capital.
The Filecoin mainnet launched in October 2020 and equally went down a hit.
Since then, the network has grown exponentially with Filecoin reporting
a milestone storage capacity of 2.5 billion gigabytes in February 2021.
Investors could clearly see the potential of Filecoin to disrupt traditional and centralized
digital storage solutions like Dropbox, Amazon Web Services, and Google. It’s Not
that these services are bad, it’s just that decentralized storage solutions are better.
Firstly, unlike centralized enterprise-owned storage services which set the price on storage,
a decentralized and free marketplace is more hyper-competitive,
with fair prices based on what users are willing to bid and pay for.
Secondly, decentralized storage solutions are argued to be more robust and secure. You’ve
certainly heard of data breaches and privacy leaks happening to global companies around the world.
Centralized solutions represent a single point of attack that could go down or offline. Remember
when a fire broke out at a data center in eastern France, and disrupted millions of websites?
Thirdly, a decentralized storage solution like Filecoin is more efficient.
Instead of building more data centers around the world, Filecoin
flexibly leverages existing storage resources from idle computers to meet consumer demand.
Lastly, Filecoin is censorship-resistant and operates as an alternative network
to a centralized authority that can delete, withhold
or prevent you from sending or receiving files at will. It also cannot be shut down.
Filecoin sees itself as a cooperative storage solution,
by the people and for the people. Users rent unused hard drive space from miners,
who are then incentivized to provide the storage space. Here’s how it works:
First: the Client browses available storage types and location
Second: Miners bid for the storage contract Third: Client selects winning miners
Fourth: Data is sent, encrypted, divided into segments, and stored by network miners
Besides the daily ins and outs of personal or enterprise data storage and retrieval,
an interesting use case of Filecoin is the “Photographic Archive of Trust'' project.
The project had Reuters photojournalists document, cryptographically seal, and verify over 250
photos, including the day of the Capitol Hill insurrection,
across 78 days of the United States presidential transition in 2021.
As you can probably tell, the Filecoin token FIL itself is a vital component
of the Filecoin network. Clients pay in FIL to store their files on the network,
while miners receive or earn FIL tokens as rewards
or payment for executing tasks like storing data, securing the blockchain and transaction fees.
Even if you are not a Filecoin network user or miner, you can hold the FIL token
to provide liquidity and support usage of the Filecoin storage network.
In this Zettabyte Era, data is growing by the day and the trend doesn’t seem like it is slowing
down. While still on the fringe, decentralized storage solutions could one day grow to rival
centralized solutions. Within this space, Filecoin is not the only decentralized storage solution,
with competitors like Sia, Storj, and Arweave hot on their heels to capture a piece of the pie.
So, what are your thoughts on Filecoin? Let us know in the comments and smash
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