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Everything You Need to Know About Filecoin

What is Filecoin?

Filecoin is a token of service. Unlike other cryptocurrencies whose tokens facilitate the buying and trading of units and products of monetary value, Filecoin’s value is a unit of storage. Filecoin allows users to buy data storage space in a fluid and free-market microeconomy. Within that free market, renters and buyers have a direct P2P relationship, and thus unlike centralized file storage systems like iCloud or Amazon cloud, Filecoin democratizes the exchange.

Decentralization

Decentralization is one of the key components of Filecoin. It is essentially a digital form of AirBnB. With the vast supply of computer storage capacity all over the world, it helps computer farms “thrive” and puts their soil (the storage) to good use across a vast network of resources.

Who Created Filecoin?

Computer scientist and engineer Juan Benet invented Filecoin and are the Founder and CEO of Protocol Labs, Inc.

When Was Filecoin Launched?

Benet launched Filecoin in 2017 and put it on the market in October 2020.

How Does Filecoin Work?

Filecoin has a unique, complex consensus system. In one way, it is a hybrid of proof-of-space and proof-of-stake. Instead of just tokens/units of currency that users can stake, stake is the storage. The incentivization process for reaping the rewards for contributing to the blockchain is similar to most other cryptocurrencies; with Filecoin, miners have to commit to yield more stake, which is storage. This externality is a unit of value and accounts for the exchange of Filecoin across its network. Filecoin also sees this as specific proof-of-work, in that the process of delivering that externality is truly contributory.

Filecoin is also a proof-of-spacetime, proof-of-storage, and proof-of-replication system. Spacetime is where miners prove more along the process chain–that a unit of data had been stored continuously for x amount of time. Storage is self-explanatory. Replication is on the micro-level, like studying DNA: miners have to prove that a subunit of uniquely coded data has been stored.

How to Keep Your Filecoin Safe

While users might think that storing their data on someone else’s machine is less safe, Filecoin splits up data in such a way that it cannot be compatibly put back together. This makes it extremely difficult for the storage provider to hack. That’s all there is to it–users safely store their data on other storage systems.

Is Filecoin a Good Investment?

Filecoin is innovative in its mission to provide an extremely cost-effective, fast, and energy-efficient system of decentralized data storage. Its intrinsic safety comes from its decentralization, in that there’s no single point hackers can attack. It has immense scalability and enables the functionality of pre-existing machines, saving resources. Therefore, it is a viable cryptocurrency in which to invest.

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