Quick Facts

Approximate Market Cap$4,225,008,342 
Year Established2014
FounderJuan Benet
Symbol/AbbreviationFIL
UtilityUtility Token

Data management is time-consuming, costly, and difficult to protect for both companies and consumers. This industry is rapidly expanding as video streaming becomes more widespread, digital resolutions rise, and more smart devices become available.

The globe has also experienced enormous power amassed by cloud computing companies. They have the authority to choose who is enabled to use their solutions and what types of data are accepted. Rather than enabling these corporations to become arbiters of truth, Filecoin has arisen as a censorship-resistant, market-based alternative.

Filecoin brings together consumers and data storage suppliers from all around the world to create an integrated and comprehensive marketplace for information storage requirements.

What is Filecoin – Definition

Filecoin (FIL) is a P2P network that uses the Filecoin blockchain to enable users to store files on the internet. FIL is the platform’s native cryptocurrency.

FIL is not an ERC-20 token since Filecoin manages the system using its own blockchain technology.

The Filecoin ecosystem is built on top of the Interplanetary File System technology for decentralized file management (IPFS). The key distinction is that, while IPFS is free to use, it does not pay miners. The use of Filecoin is costly, but it has the potential to produce cash.

Filecoin employs two new proofs to ensure that miners are indeed saving the data they claim to be holding. Proof-of-Replication verifies that a miner has indeed saved the number of copies of data claimed. Proof-of-Spacetime demonstrates that a miner has saved data over an agreed-upon time period. Combined, these proofs enable consumers to believe that miners actually have the data they claim to have.

Filecoin may also be linked with dApps, which can save data through any Filecoin miner.

Pros and Cons

Pros

  • Completely decentralized
  • Run by miners
  • Has its own encryption protocol

Cons

  • High competition
  • Not popular among investors
  • Platform punishes inefficiency

The History

Protocol Labs, the startup developing Filecoin, was formed by Juan Benet in 2014. The Interplanetary File System (IPFS) was first launched in 2014 by the team. Since then, it has transferred billions of files using a P2P file-sharing system.

Protocol Labs has obtained investment from a number of well-known investors. Filecoin’s first coin offering in 2017 attracted an additional $257 million from a group of well-known venture capital companies including Sequoia Capital, Andreessen Horowitz, and Union Square Ventures. At that time, the Filecoin sale was the largest of its type.

How Filecoin Works

Filecoin (FIL) is a decentralized storage marketplace with the goal of being the least expensive, quickest, safest method to store data online.

Users and miners (storage or retrieval) bargain for a storage fee that is beneficial to both parties. Customers pay storage miners to keep their information safe. The data is subsequently stored by storage miners. They use mathematical proofs to ensure its completeness, correctness, and privacy. Retrieval miners can also act as storage miners. They are then compensated for retrieving and delivering data when the end-user requires it.

This provides a marketplace for miners to offer their services and clients to bid on the ideal option for their requirements. As a consequence, the Filecoin network is immune to censorship, cost-effective, and resilient.

Advantages & Disadvantages

Advantages

Censorship-Resistant

Filecoin is run by a massive array of miners. Filecoin enables censorship-resistant storage by depending on this decentralized network.

Robust

Users can store data across multiple providers using the vast network of miners to guarantee that their info is always available.

Verifiable

Instead of relying on a third-party cloud storage provider, customers may use the Filecoin protocol’s encryption to validate the authenticity and presence of their data.

Disadvantages

Competition

Filecoin is an emerging technology that competes with cloud storage industry conglomerates such as Amazon, Microsoft, and Google.

Network economics

The Filecoin platform’s security is primarily dependent on the platform’s economics. The system incentivizes efficient conduct while punishing inefficient behaviour.

Filecoin in the Global Crypto Market

Filecoin presently has a circulating supply of 69,832,523 FIL tokens. It has a total supply of 2 billion FIL coins. This quantity will never be raised, but it has the potential to diminish if poor conduct in the Filecoin community is disincentivized by a cutting penalty. If a user violates the rules, a portion of their FIL assets or prospective FIL awards may be seized and burnt.

FIL tokens are available to buy on the secondary market. FIL can also be obtained by participating in the Filecoin dual node scheme. Filecoin had an ICO in 2017 and launched its mainnet on October 15, 2020. On the genesis block, 30% of the total supply was distributed.

FAQ

What is the maximum amount of Filecoin available?

The entire Filecoin supply is 2,000,000,000 (2 Billion) Filecoin. Similar to Bitcoin, it will be distributed over decades.

What exactly is IPFS?

IPFS is an acronym that stands for InterPlanetary File System. It is a P2P network that allows users to store and access files, webpages, programs, and data in a distributed environment.

Which blockchain network hosts FIL coin?

Only the Filecoin blockchain is used to host FIL.