Filecoin is a decentralized storage system that aims to “store humanity’s most important information.” The project raised $205 million in an initial coin offering (ICO) in 2017, and initially planned a launch date for mid-2019. However, the launch date for the Filecoin mainnet was pushed back until block 148,888, which is expected in mid-October 2020.
The project was first described back in 2014 as an incentive layer for the Interplanetary File System (IPFS), a peer-to-peer storage network where users pay for data storage and distribution services in $FIL. Filecoin is open protocol and backed by a blockchain that records commitments made by the network’s participants, with transactions made using FIL, the blockchain’s native currency. The blockchain is based on both proof-of-replication and proof-of-spacetime.
Filecoin is open-source and decentralized, which means that all governance is in the hands of the community. On the Filecoin platform, developers have the opportunity to create cloud file storage services like Dropbox or iCloud. Anyone can join Filecoin and start storing their data or earn money by providing space for someone else’s funds. The creators of Filecoin opted for their blockchain technology to run the network and their token with their own consensus.
$FIL is the native currency of Filecoin that powers the entire network and all processes. Clients pay for transactions in FIL tokens. Miners place FIL as collateral, guaranteeing their services.
The developers claim that Filecoin solves the problem of inefficient file storage and retrieval. Customers can find the right solution with an efficient set of tools and its core development, IPFS.
Filecoin is an ERC-20 token, which means it can be stored on any hardware wallet that supports the Ethereum blockchain. Some popular hardware wallets that can be used to store Filecoin include Ledger Nano S, Ledger Nano X, Trezor One, and Trezor Model T. To store your Filecoin on a hardware wallet, you will need to transfer the tokens from the exchange to the wallet’s address. Be sure to follow the instructions provided by the wallet manufacturer to ensure that your tokens are stored securely.
The best option for storing any cryptocurrency would be to use a hardware wallet. These are pieces of hardware that store the private key to your coins offline.
Today, there are two leading hardware manufacturers to choose from – Ledger and TREZOR. Both companies have different models of hardware wallets that will get the job done.
If you want deeper insights on specific models, you can read my Ledger Nano X review or my TREZOR Model T review.
Filecoin is an ERC-20 token, which means it can be stored on any software wallet that supports the Ethereum blockchain. Some popular software wallets that can be used to store Filecoin include MyEtherWallet, MetaMask, and Exodus. To store your Filecoin on software wallet, you will need to transfer the tokens from the exchange to the wallet’s address. Be sure to follow the instructions provided by the wallet provider to ensure that your tokens are stored securely. It’s important to note that software wallets are generally less secure than hardware wallets, so it’s recommended that you use a hardware wallet if you plan to hold a significant amount of Filecoin for a long period of time.
Hardware wallets cost money, so if you’re not sure how serious you are about cryptocurrencies and just want to get a taste of what they feel like, perhaps you would be better off starting with a software wallet.
A software wallet is a free program that lets you store your coins on your computer or mobile phone.
The easiest Filecoin software wallets to get started with are undoubtedly Exodus, Atomic Wallet and Guarda . All wallets are very intuitive. Exodus, Atomic Wallet and Guarda is available on desktop for Windows, Mac and Linux, as well as on mobile for both iOS and Android. If you want more information you can read my Exodus, AtomicWallet and Guarda review.
Once you decide on an exchange, open an account and buy your Filecoin . Make sure to withdraw the Filecoin from the exchange to your personal wallet.
Never leave coins on an exchange, as you risk losing them all if that exchange gets hacked or shuts down (which has happened in the past) and always double check address before send coins because you can send the coins to wrong address .
Filecoin was founded by Juan Benet, who is also the founder of Protocol Labs. Benet is a computer scientist and entrepreneur who has been involved in a number of high-profile technology projects, including the development of the InterPlanetary File System (IPFS). Filecoin was created to complement IPFS by providing a decentralized storage network that allows anyone to store and retrieve data in a secure and efficient way. The project has received funding from a number of prominent venture capital firms, including Sequoia Capital, Andreessen Horowitz, and Union Square Ventures.
Filecoin is unique because it is a decentralized storage network that allows anyone to store and retrieve data in a secure and efficient way. Traditional cloud storage providers, such as Amazon Web Services and Google Cloud, rely on centralized data centers that can be vulnerable to cyberattacks, censorship, and other forms of interference. In contrast, Filecoin uses a decentralized network of storage providers who compete to provide storage capacity and retrieve data on demand. This makes the network more resilient, secure, and cost-effective than traditional storage solutions.
Filecoin also uses a unique economic model that incentivizes storage providers to offer competitive prices and high-quality service. Providers are paid in Filecoin tokens for the storage they provide, and the price of storage is determined by supply and demand. Users can also earn Filecoin by offering their unused storage space to the network, creating an additional revenue stream for individuals and organizations.
Finally, Filecoin has a strong commitment to open-source software and community-driven development. The project is built on a foundation of collaborative innovation and welcomes contributions from developers and users around the world. This makes Filecoin a truly decentralized and community-driven project that is designed to serve the needs of a global audience.
There are three parties involved in the Filecoin system: clients, storage miners, and retrieval miners. These groups of users interact closely with each other, concluding transactions, exchanging information, and making micropayments in $FIL.
Clients pay for storing or retrieving data. They place an order on the online storage market, where a deal is subsequently concluded with storage miners. Storage miners, in turn, store client’s data and receive rewards. This group of users places files in free sectors of a hard drive, all actions are recorded in the blockchain, and clients receive private keys.
Retrieval miners extract data at a request of a client. Clients place a trade on the off-chain Retrieval Market. Retrieval miners can also act as storage miners.
Filecoin is based on IPFS where all data is stored on a peer-to-peer blockchain. To start the process, users choose miners to store personal data and pay for placement in FIL tokens. Thereby, miners execute trades, and receive participation fees and FIL rewards. The more storage miners offer, the higher the chances of getting rewarded. At any time, clients can check how their data is stored during a transaction, as proofs are fixed in the blockchain. The Filecoin network uses the Proof-of-Replication (PoRep), while the miners use the Proof-of-Spacetime (PoSt).
Therefore, if a client wants to hopefully keep their data safe on the Filecoin network, then they must pay the miner. The cost is set by the open market, and the price is made up of several factors. In the open market, there is hyper competition among miners, where everyone puts forward their own minimum price for storage.
Firstly, with the launch of a large and free market specializing in data storage, there is a tendency to reduce the cost of the service itself. The market becomes more open to everyone, which gives a lower price for using the network.
As of September 2022, the network has united over 20,000 users and computers around the world, creating an extensive community with similar goals and requests. Moreover, Filecoin opts for existing resources, instead of creating new technologies and devices. Miners can join the network from anywhere in the world.
Finally, Filecoin is a decentralized network with its own ways of protecting information and preventing single-point attacks.
Protocol Labs describes Filecoin’s tokenomics, or economic model, as a “market for data” where users can sell their storage space to other users, who are looking to rent. Five stakeholders will be able to trade tokens: developers, clients, miners, token holders and ecosystem partners. There will also be three Filecoin markets, according to Protocol Labs: file storage, file retrieval and on-exchange token trading.
In fall 2020, 400 miners participated in what was called the “Space Race” testnet phase, increasing Filecoin’s network data capacity by over 325 pebibytes; approximately 3.5 million FIL tokens will be released to the Space Race participants.
Filecoin is secured through proof-of-replication and proof-of-spacetime. In the Filecoin network, nodes that are also known as retrieval miners are in competition to serve clients with data as quickly as they can. They are then rewarded with FIL fees, which encourages a network of nodes that want to replicate and preserve files.
Storage miner nodes are constantly competing for contracts to provide storage to clients to a specific length of time. When a storage miner and their client agree on a deal, the storage miner holds the client’s data in a sector and “seals” it to create a unique copy of that sector’s data. Storage miners are rewarded with FIL by clients as deal fees, and these miners can also mine blocks and receive a block reward.
Filecoin (FIL) can be purchased on a variety of cryptocurrency exchanges, including:
To buy FIL, you will need to create an account on one of these exchanges and complete the necessary identity verification and security steps. Once your account is set up, you can fund it with fiat currency or other cryptocurrencies, such as Bitcoin or Ethereum, and use those funds to purchase FIL.
It’s important to note that cryptocurrency prices can be highly volatile and may fluctuate rapidly. Before buying any cryptocurrency, it’s a good idea to do your research and understand the risks involved. Additionally, it’s important to store your FIL in a secure wallet, such as a hardware wallet, to protect your investment.