Filecoin

What is Filecoin (FIL)?

FIL is a native token Filecoin, which is a decentralized storage network. At its core, Filecoin is an open-source, collaborative digital data storage and retrieval system based on Interplanetary file system. This allows users to take advantage unused hard drive space. Be sure to take a look at the Filecoin price if you want to see the real price of FIL.

The Filecoin crypto project is often perceived as data market because it allows users to rent or sell their storage space to others. Any member of the Filecoin project who has free disk space can rent it out to others for the purpose of storing data. According to the plans of the Filecoin project, there will be three types of markets in the Filecoin system:

• File storage
• Receiving files
• Exchange trading of tokens

Taking advantage of its decentralized nature, Filecoin protects the physical location of data, making it easier to search but more difficult to censor. Overall, the main benefit of decentralized storage platforms like Filecoin is that they allow individuals to be custodians of their own data.

Founder of Filecoin

Juan Benet, creator of the Interplanetary File System (IPFS), launched Filecoin. Benet is also the founder of Protocol Labs, an organization that helped launch Filecoin. Although the project was originally introduced in 2014 as an incentive layer for IPFS, it was eventually launched on the Filecoin mainnet in 2020 as a separate project.

How does Filecoin work?

Most network processes occur thanks to miners. In most blockchain protocols, miners are users of the network who contribute to the development and maintenance of the blockchain. However, the way Filecoin works is very different. Instead of sacrificing processing power (hashing power), Filecoin miners provide the necessary utilities, storage space, and a way to retrieve information.

Existence of two different types of nodes − Mining node storage and retrieval nodes – This is what most distinguishes Filecoin from other similar networks. Storage nodes are a physical representation of disk space allocated by a network participant for data storage. Since large nodes promote centralization and small nodes degrade the quality of the network, the network generally prefers medium-sized nodes. These nodes are paid for the information they store. Each storage node owner is paid based on the amount of storage it provides.

Search nodesOn the other hand, they are a special kind of nodes that only exist on the Filecoin network. The main requirements to become a retrieval node are a fast internet connection, low ping and a location close to storage nodes. The job of search nodes is to find and send information to users in response to their queries. The node that processes it first gets paid.

Consensus mechanisms used to protect the Filecoin crypto project: Proof of Replication and Proof of Spacetime.

Proof of Replication (PoRep) this is a new variation Proof of Stake. It is based on sealing, which is a progressive sequential process used to create a unique replica for each miner by encoding data. Essentially, this is how miners show the public that there is a unique data encoding in the physical storage.

Proof of Spacetime (PoSt), on the other hand, allows miners to read data from randomly selected sectors and compress it into a PoSt proof. By doing this, miners provide public evidence that a unique data encoding has been continuously present in physical storage for a certain period of time.

Purpose of FIL coins

The main purpose of FIL coins is provide economic stimulus to ensure that data is stored securely over time. This means that FIL coins are primarily distributed as rewards to storage and retrieval nodes that contribute to the network by sharing or distributing storage or data.

However, in addition to this, Filecoin tokens are also used. To cover gas fees on Filecoin. Gas is used to measure the amount of computing and storage resources required to complete transactions and verify evidence.

Filecoin Tokenomics

Initial Coin Offering (ICO) took place after the release of Filecoin in 2017. The price of Filecoin during the ICO was $1. Despite the fact that the ICO was conducted on the CoinList website in compliance with strict SEC standards, the level of investor interest was so high that it became necessary $252 million was raised in less than 30 minutes.

Most of the total supply of Filecoin (70%) is dedicated to miners’ awards. The remaining part is divided between the project developers, ICO investors and the Filecoin fund for future development.

If you are planning to invest in Filecoin tokens, please note that FIL price may vary. This is essentially what happens with most crypto assets, as their prices, including the price of Filecoin, are easily affected by fluctuations in the entire crypto market.