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What is Filecoin (FIL)?
Filecoin basic info
About Filecoin
Filecoin is an open-source decentralized storage network. It harnesses unused hard drive space from its global community to create a secure and efficient data storage market. The project is aimed at revolutionizing the way we think about data storage, offering a decentralized alternative to conventional centralized storage options like Amazon S3.
Filecoin was developed by Protocol Labs and was first announced in 2017. Filecoin was scheduled to have its mainnet released in 2019 but had to postpone until October 2020. Built on a peer-to-peer network, Filecoin connects individuals who want to store data with those who have spare storage capacity.
In 2017, Filecoin achieved a remarkable milestone by successfully raising over US$200 million in just 30 minutes. This impressive feat positioned it as one of the largest Initial Coin Offerings (ICOs) of that period.
Resources
Whitepaper: https://filecoin.io/filecoin.pdf
Official website: https://filecoin.io/
How Does TrueUSD Work
Filecoin operates on a unique combination of cryptography, blockchain">blockchain technology, and peer-to-peer networking.
Data Storage
Clients, or those who want to store data, engage with miners, or those who have storage space to spare. The data is encrypted, split into pieces, and stored across different nodes, assuring redundancy and security.
Incentive Structure
Miners are compensated for their storage and retrieval services in FIL tokens, Filecoin's native cryptocurrency. Various proof systems ensure the integrity and availability of the data. These include Proof of Replication (PoRep) and Proof of Space-time (PoSt), which serve as guarantees that miners are faithfully storing the clients' data.
Retrieval
The decentralized network also enables efficient data retrieval. Retrieval miners compete to deliver stored data to clients, and speed and cost are optimized through a market-based system.
What is FIL Token?
FIL, or Filecoin Token, is the native cryptocurrency of the Filecoin network. It is integral to the economic structure of the platform. FIL has a hard cap maximum supply of 2 billion. At the moment, there are 438.68 million FIL tokens in circulation.
- Utility: FIL serves multiple functions within the Filecoin ecosystem. Clients use it to pay for storage and retrieval, and miners are rewarded in FIL for providing these services. It's also used in network governance and decision-making processes.
- Market Presence: FIL has established itself as a prominent cryptocurrency, being listed on major exchanges and witnessing considerable trading volumes.
- Economic Model: Filecoin's economic model ensures that the token's supply and demand align with the network's growth and utilization. The release of tokens is carefully calibrated, creating a balanced ecosystem.
Conclusion
Filecoin's innovation in decentralized storage symbolizes a significant shift in the digital landscape. Its robust technology, historical milestones, and the utility of the FIL token form an interconnected system that challenges traditional centralized data storage systems.
It's important to note that like any other cryptocurrencies, Filecoin carries its own risks and it's always wise to do your own research and exercise caution while investing.
FIL supply and tokenomics
Uniqueness
Filecoin aims to store data in a decentralized manner. Unlike cloud storage companies like Amazon Web Services or Cloudflare, which are prone to the problems of centralization, Filecoin leverages its decentralized nature to protect the integrity of a data’s location, making it easily retrievable and hard to censor.
Decentralized storage systems like Filecoin allow people to be their own custodians of their data, as well as makes the web more accessible to people worldwide. Since participating in the Filecoin network by mining and storing is directly related to winning more block rewards, Filecoin incentives participants to act honestly and store as much data as possible.
Token utility
The Filecoin token ($FIL) is the native crypto token of the Filecoin network. Token holders can use $FIL to participate and transact in the Filecoin network.
In particular, users pay miners in $FIL to store or distribute data and retrieve their information. In other words, the Filecoin network uses the $FIL token to incentivize various node types to contribute to the network. Node types include:
- Chain Verifier Node: Synchronizes the Filecoin blockchain and validates the latest blocks to reach a consensus state.
- Client Node: Builds on top of a Chain Verifier Node and must be implemented by any application that is building on the Filecoin network.
- Storage Miner Node: Forms contracts with clients to store data for a period of time. Storage Miner Nodes can earn $FIL whenever new blocks are created, and by completing storage contracts and adding new messages to blocks.
- Retrieval Miner Node: Forms contracts with clients to retrieve a particular set of data. Retrieval Miner Nodes earn $FIL by completing data retrieval contracts. Retrieval Miner Nodes situated in a well-placed location would earn more as they facilitate more transfers, and provide better service due to lower latency.
$FIL will also be used as collateral for miners to participate in the Filecoin ecosystem. The collateral required will be proportional to the storage space provided by miners. Filecoin has three different collateral mechanisms:
- Initial Pledge Collateral: Direct upfront collateral to participate in the economy. This collateral will be slashed if the miner is found to have acted maliciously.
- Block Reward Collateral: To reduce upfront collateral, block rewards are also used as collateral, block rewards for miners are subject to slashing in the event that a sector is terminated before its expiration.
- Storage Deal Collateral: Storage provided by the storage provider to collateralize deals.
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What is the development prospect and future value of FIL?
The market value of FIL currently stands at $2.73B, and its market ranking is #41. The value of FIL is widely recognized by the market. When the bull market comes, the market value of FIL will likely continue to increase.
Moreover, if FIL can play a greater role in practical applications, such as Filecoin builders fully leveraging the potential of FIL, partnering with more businesses, and increasing its user base, the long-term value of FIL will be significantly enhanced.