Filecoin, blockchain storage made cheap

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The aim of the Filecoin project is to create a decentralized storage platform with its own cryptocurrency (FIL, Filecoin). The idea was presented to the general public back in 2014, but is still underway.

The project is owned by Protocol Labs, a California-based blockchain startup whose developments include the InterPlanetary File System (IPFS). The essence of the startup is to give owners of computer equipment the opportunity to receive tokens for the unused capacity of hard drives. Internet users who want to rent a storage space will pay for it. In this way, you become a FIL miner using the appropriate software.

What is FIL?

The Filecoin (FIL) project is conceived as a decentralized repository of electronic files, using, instead of the usual http, the innovative protocol IPFS, which si developed by the same Protocol Labs. Initially it was assumed that IPFS and Filecoin would be tested and developed in parallel and, of course, the introduction of such a global innovation requires huge resources and time. This  explains the low rate of launch of the system. By and large, Filecoin is an upgraded version of the World Wide Web.

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History of appearance and team

As we said, the initiator of the project is the American company Protocol Labs. The idea of launching a network of decentralized data storage has arisen for a long time and in principle it has already been partially implemented in torrent trackers. But the global application required the modernization of the communication protocol and the creation of an incentive system to attract participants. Without your own cryptocurrency, the second point is extremely difficult to perform.

The project is led by Protocol Labs CEO Juan Benet. He has a track record of graduating from Stanford University, working in the computer game studio Loki Studios. Benet is one of the developers of the Y Combinator engine that runs Protocol Labs. The team consists of professional programmers, blockchain engineers and marketers. The official website of the project is https://filecoin.io/.

What problem solves Filecoin?

The main date centers of the Internet we use are far from decentralized, and are located mainly in Europe and the United States. Only 10% of the world’s population lives in these two regions, and internet servers are with them. Therefore, if you live somewhere in India or Africa, and your Internet connection is slow, it can be the reason for a very long download, even the simplest document.

Another point that doesn’t play a plus of the “current” internet is that it’s controlled by companies like Google, Amazon, Microsoft and IBM, and if you cut the cables that lie between Europe and the U.S., most of the services we’re used to using won’t be available. At this point, we become hostages to the situation that the servers have a specific location and cannot be moved.

The Filecoin platform solves this situation thanks to the IPFS protocol, which just allows you to break this network into small pieces, thus decentralizing it, but at the same time not to turn it off. Files that are on the Filecoin network will be available to several users at the same time, as is currently the case in Torrent, where the file is held by thousands of people at the same time. And when downloading a file, the algorithm will choose the nearest location of the file location, which will make the download speed of the file as fast as possible.

Filecoin Ecosystem

Filecoin’s distributed network offers a ready-made solution to this problem. The new communication protocol allows you to fragment data for storage on multiple small nodes. If you need to download, the system will select the nearest node and thus increase the speed of transmission of information many times over.

Users of the network will no longer be held hostage by large providers and will be able to freely share information without censorship and covert surveillance. In addition, everyone will be able to receive an annuity in the cryptocurrency FIL , providing for storage of data a free amount of their drives.

Will Filecoin replace IPFS?

Protocol Labs believes that Filecoin and IPFS will develop in parallel. The company is working on their interoperability. IPFS is expected to retain users who are willing to purchase storage equipment and maintain nodes on their own, and Filecoin will be preferred by those willing to spend money to ensure that others take care of data security.

How the Filecoin network works

Now let’s look at exactly how the customer and the service provider interact. The principle of action is:

  • The user chooses the file they want to store on the Filecoin network.
  • His storage request is then placed on a special list of applications, for which a small commission must be paid.
  • Then the bidding process begins, during which various nodes offer the amount to pay, which they will charge you for storage. This is to ensure that the customer can select nodes with a minimum storage price.
  • Once nodes are found, the network breaks the file into many fragments that are encrypted and sent to record on the winning nodes.
  • The map of placing all the fragments and the order of collection is entered into a special distribution table, which is located inside the blockchain.
  • To get the file back from the fragments, you need to have a secret key that is only at the owner of the file.

Mining FIL coin

Miners are an integral part of the Filecoin ecosystem. Anyone can participate in the extraction of Digital Fil coins and monetize the free space on the PC hard drive. Mining is done by processing the data of customers who want to place their files in storage.

The main difference between the architecture of the Filecoin cryptocurrency network and most of it’s analogues is the presence of two types of nodes: Storage Nodes and Retrieval Nodes. What is each type of node designed for? More on that below.

Storage Nodes

These nodes are physically allocated by a member of the network for storage of information place on their hard drive. The advantage will be given to the average size of the available node, because large nodes lead to centralization, and too small – impair the quality of the network. These nodes are paid to store information on them.

The same type of nodes contain the blockchains of cryptocurrencies Sia and Storj.

 

Retrieval Nodes

This type of node is unique to the Filecoin network. The main requirement for them is high internet connection speed, low ping and close proximity to the first type of sites where the information is stored.
The task of the second type of node is to find and transmit information to the user according to their requests. The one who can handle it first will get paid. Therefore, those search nodes that are located in a large number of working storage sites will be competitive.

Where to buy  Filecoin

About 30% of Filecoin trades are happening on Binance and Huobi

A full list of exchanges and exchange pairs is available at

https://www.coingecko.com/en/coins/filecoin#markets

Safe wallet

Filecoin cryptocurrency network recently launched, so there are not many wallets for storage. You can use the Math Wallet app, the official Binance Trust Wallet wallet, or the Atomic crypto paper. Although the project was originally developed on the basis of Ethereum, Filecoin mainnet has a separate blockchain.

The address of the cryptocurrency FIL starts with f, not 0x, and looks something like this: f1aildyybkh77cuhseb343aa57wqf64lzzbixkdfq.

Links to block explorers:

https://filscan.io/ and https://filfox.info/.

The pros and cons

Pros of FilecoinCons of Filecoin
The project is controlled by the national regulatorThe project has not yet passed the test of time
The data is encrypted before it is sent to the storeThe system of remuneration for miners is not fully thought out
The user can earn cryptocurrency by taking files for safekeeping
Relatively low cost of services
Unlimited network expansion
The coin is traded on the Binance exchange and other solid platforms

 

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