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Table Of Contents
Filecoin (FIL) is a decentralized file storage and sharing network that leverages the power of blockchain technology to provide users with a plethora of new opportunities in the market. Decentralized file-sharing platforms are now more popular than ever. Filecoin combines various technologies to provide a unique experience to its users that translate into more chances to earn crypto.
In its simplest form, Filecoin operates similarly to other file-sharing platforms such as Dropbox. The main difference is that instead of a centralized authority storing data, users who wish to store data can bid on available storage offered by miners who offer disk-space. In this way, Filecoin represents another use case for blockchain technology outside of financial applications.
What Problems Does Filecoin (FIL) Solve?
Filecoin attempts to rectify some major concerns facing the file sharing and cloud storage sectors. Currently, these industries suffer from centralization. Major firms such as Amazon Web Services hold huge market shares. Their positioning allows them to dictate skewed terms and higher fees to users who lack reliable alternatives.
Unused Hard Drive Space
It’s never good to let your unused stuff go to waste. This statement rings especially true when discussing your unused hard drive space. Until recently, this unused storage would hold no value. Today, you can earn some significant profits by sharing your unused hard drive space.
Along with centralization comes censorship. Industry leaders now play the role of gatekeepers. They choose what information is ok to spread to the masses. Unfortunately, this trend of intrusive tech firms appears to be set to continue for the foreseeable future.
Benefits of Filecoin (FIL)
Filecoin (FIL) users enjoy a variety of benefits that make the platform a serious contender in the market. The protocol incentivizes a global network of computer operators to provide file sharing and storage services to the masses. This strategy encourages further cooperation between users. Impressively, the Filecoin community is one of the fastest-growing in the market.
Filecoin’s decentralized approach to storage puts users and storage providers first. The platform has data retrieval speeds that outrank industry leaders like Amazon. As the market grows, its infrastructure is designed in a way to improve its responsiveness. In this way, Filecoin has the potential to become the fastest and cheapest way to store data on the internet
The decentralized peer-to-peer nature of Filecoin makes it censorship resistance. Decentralized networks have no single point of failure. Additionally, there are no gatekeepers and all the data on the Filecoin network is encrypted to the highest standards.
How Does Filecoin (FIL) Work?
Filecoin was built atop another peer-to-peer file storage and retrieval protocol named the Interplanetary File System (IPFS). This platform is very similar to Filecoin but without financial advantages. Users can share data and storage space for free using the IPFS network. However, you can’t make a profit using this protocol. In this way, Filecoin improves the usability of the system.
Filecoin users pay miners for storage, retrieval, and distribution of data. For their efforts, miners receive rewards in the form of FIL tokens. How much a user pays for storage services is determined by an open market. Notably, charges vary depending on whether a user chooses speed over redundancy and vice versa. Other factors also play a part in your pricing. Specifically, storage prices are affected by availability and demand.
Filcoin’s network is maintained by two types of miners. Each of these miners gets paid for making storage space or data available to users. Interestingly, in the Filecoin ecosystem, miners compete with one another to offer the lowest price for storage. Best of all, the only criteria for becoming a miner is having free hard disk space and an internet connection. However, once you are a miner, you’re judged based on your reliability and the prices of storage you offer.
The main type of miner found in the Filecoin ecosystem is Storage Miners. These are individuals that act as storage providers. Notably, these miners can be either individuals or organizations. Both types of miners perform several computationally intensive processes called proofs. These systems work to secure the network. Keenly, these systems verify that miners are storing the data they claim to be storing and that they’re doing so reliably.
Retrieval Miners and Services
The second type of miners found in the Filecoin network act as pre-fetchers of data. Their purpose is to retrieve the most downloaded files and deliver them to users in close proximity. To qualify as one of these miners, you must have a strong internet connection.
FIL tokens act as the native utility token for the Filecoin network. Users make payments and receive rewards in FIL. FIL tokens are versatile digital assets that can be traded on exchanges globally.
Filecoin introduces two new proofs that work together to ensure the network remains valid. These systems work in the background as the core protocols of the Filecoin system. In this way, these protocols act as self-healing features.
The Proof-of-Replication mechanism verifies that a miner truly stored the number of copies of data it claims to hold.
The Proof-of-Spacetime mechanism verifies that a miner stored the data for the agreed period of time.
These systems allow Filecoin to autonomously detect faulty miners. The protocol retains the history of every miner. Each miner receives a grade for their dependability, reliability, pricing, and availability. Wisely, miners with top reputations gain more storage opportunities. Consequently, they earn more rewards.
History of Filecoin (FIL)
Filecoin’s story begins with Protocol Labs Filecoin ICO in 2017. At that time, the platform made international headlines as one of the industry’s largest funding rounds. Specifically, the event secured $205.8 million and demonstrated the high level of investor interest surrounding the project. Notably, the event received backing by venture capitalists Sequoia and Andreessen Horowitz.
How to Buy Filecoin (FIL)
FIL is available on most reputable exchanges. The world’s top crypto exchange, Binance offers access to FIL. To get your hands on this unique token you will need to register for a Binance account. After your verification, you can start trading instantly. You will need to load fiat, BTC, or ETH to get FIL. Once your account is loaded, you can find the BTC/FIL trading pair and start trading instantly.
How to Store Filecoin (FIL)
If you seek to make a major investment in FIL or if you are planning on HODLing this crypto for long periods of time, a hardware wallet is the best option. Hardware wallets keep your crypto stored offline in “cold storage.” This strategy makes it impossible for online threats to access your holdings. The Ledger Nano S or the more advanced Ledger Nano X both support Filecoin (FIL).
Filecoin (FIL) – A Market Set to Expand
If Filecoin is any implication of what is to come in the future, you can expect to see more blockchain-based file sharing protocols enter the market. These systems help users secure a passive income and help to reduce the carbon footprint and waste produced by users who no longer need to purchase hardware. For these reasons, Filecoin is set to experience massive growth in the coming months.
David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com
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