Filecoin FIL Price

The potential benefits of Filecoin are as follows:

• Technology: Filecoin offers data distribution on a network that sets up network storage, as well as mechanisms involved in data search.
• Full decentralization
• Convenient usage
• Strong market position
• Cheaper than Amazon Web Services or Google Cloud

Filecoin Operating Principle

Filecoin works similarly to the IPFS network, allowing users to exchange and store data without any incentive model. Clients are paying miners to store their file, both the miner and the client make a deal, and then the miner commits to store their file and make it publicly available in the blockchain.

Then the Filecoin encrypts the data, breaks it up into pieces, and places it on its network. It has an ongoing verification mechanism to check whether the miners are performing their task. Filecoin verifies data stored over a set period of time using the Proof of Replication (PoRep) and Proof of Space-Time (PoST) mechanisms.

Filecoin Features

The Filecoin network includes a number of different types of nodes.

The Filecoin project also provides a number of additional tools for the operation of each node. For example, storage is managed through the Slate online service, which is an open-source storage system built on top of the Filecoin blockchain. This service is designed for encouraging users to work together in a shared network.

History of Filecoin

• In 2014, the Filecoin network first gained publicity, as its whitepaper was published by its creator Juan Benet that year.
• In 2017, Filecoin's Initial Coin Offering (ICO) was held. Investors had a lot of faith in the project, as Filecoin raised more than $250 million during the ICO, which was a record at the time.
• In October 15, 2020, the main network of the decentralized storage platform was launched on block 148,888.
• In 2021, the developers of Filecoin released the NFT Storage platform.
• In May 2022, the Filecoin Foundation and Lockheed Martin Corporation announced in Twitter (X) that they were developing a program to deploy an interplanetary file system (IPFS) in outer space.

Mining

Unlike other cryptocurrencies, where miners are rewarded for performing complex calculations for transaction validation, Filecoin miners receive FIL coins in exchange for providing computer storage. Filecoin miners are considered to be individuals and organizations that provide free disk space on Internet-connected computers.

Project participants pay validators to store and distribute content. The amount of reward is not fixed as it depends on the selected download speed and on the demands for the data that is replicated on the node: usually it is video or audio content.

Furthermore, storage miners have to provide a deposit to FIL too before accepting the contract, as the coins are used to automatically reimburse clients if the operator fails to meet its obligations to them. Keep in mind that it is profitable to be a Filecoin miner if the device is located in a highly populated center and connected to high-speed internet.

Filecoin serves as an effective tool to help create a free market for storage. Users can select miners based on value, bandwidth, security and reliability of storage that optimally meet their needs. The Filecoin protocol eliminates any need for storage providers to create a private API or promote their services, which reduces the entry threshold and creates a decentralized infrastructure of independent providers.

Summary

Filecoin is an evolving platform that allows users to buy and sell storage space. Investors noticed it closely only in March 2021, when the price of FIL cryptocurrency increased by six times. It is one of the few non-financial blockchain projects and has many differences from other startups:

• With the help of Filecoin technology, storing information is becoming safer and cheaper;
• The project has no problems with state regulation because the ICO was held in full compliance with the rules of the U.S. Securities and Exchange Commission;
• The founder is a well-known programmer, who created the IPFS protocol;
• Filecoin solves the actual problem which is the rapid growth of the information quantity;
• The project has really influential sponsors from invested venture capital funds.

At the same time, buying FIL cryptocurrency as an investment also has risks:

• Competition is still high, as there are many other blockchains for decentralized data storage;
• The problem that Filecoin solves will become important only in a few years, so the project may not pass the test of time.