Filecoin, a new type of decentralized storage network, harnesses the power of blockchain tech to store and distribute data efficiently. The network’s native token that secures it is FIL. The creators of Filecoin envision it becoming the fastest and most cost-effective solution for storing data on the internet.
Key Takeaways
- Filecoin is a peer-to-peer file-sharing and decentralized storage protocol that uses blockchain to store and distribute data.
- The network is based on IPFS – InterPlanetary File System, which allows users to share and access data without the need for a central server or authority.
- Filecoin is secured using proof-of-replication (PoRep) and proof-of-spacetime (PoSt), which ensures that data is stored and replicated accurately.
- The network works through two groups of facilitators: storage miners, who provide storage space to the network, and the retrieval miners, who retrieve data from the network at the request of clients.
- The FIL token acts as a means of payment and governance.
How does the Filecoin network work?
The Filecoin ecosystem involves three main groups of users: storage miners (storage providers), clients, as well as retrieval miners. They interact with one another to facilitate transactions, exchange information, and make $FIL micropayments.
Clients make a payment to store or retrieve data. They initiate this process by placing an order on the storage market online.
Storage miners then store the client’s data and get rewards in return. Storage miners store data in free sectors of a hard drive and record all actions in the blockchain, providing clients with private keys.
Retrieval miners retrieve data at the request of a client, and they can also function as storage miners. Retrieval miners are hired through the off-chain Retrieval Market.
To use the Filecoin network, users select miners to store their data and pay for the service using FIL tokens. Miners then carry out the file storage process and receive FIL rewards and fees for participation. The more storage space that miners provide, the greater their chances of receiving rewards.
During a storage transaction, clients can check on the status of their data at any time, as the blockchain records proof of storage.
The network uses Proof-of-Replication (PoRep), while miners use Proof-of-Spacetime (PoSt). In order to ensure the safety of their data on Filecoin’s network, clients pay a fee to miners. The open market determines this fee.
How Is Filecoin’s Network Secured?
The Filecoin protocol is secured using Proof-of-Spacetime and Proof-of-Replication. In Filecoin, nodes called retrieval miners compete to serve data to clients as fast as possible, and they earn FIL fees as rewards for their efforts. This incentivizes a node network to replicate and then preserve the files. Nodes that mine storage compete to provide file storage for clients for a certain time period.
When a client agrees on a deal with a storage miner, the miner stores the client’s data in a network’s sector and creates a unique copy of the same sector’s data through a process called “sealing”. Clients pay storage miners with FIL, and they can also earn block rewards by mining blocks.
What Makes Filecoin Unique?
Filecoin’s design stores data in a decentralized way, contrary to the centralized cloud storage companies of today like Amazon Web Services or Cloudflare.
Decentralized file storage systems like Filecoin enable individuals to take control of their own data, as well as make the web more widely available globally. The Filecoin network incentivizes participants to act honestly and store as much data as possible. It rewards them with block rewards for their contributions to the network through mining and storage.
InterPlanetary File System
InterPlanetary File System (IPFS) is a decentralized, peer-to-peer file-sharing and storage protocol. It allows users to share and access data, such as docs, audio or video files without the need for a central server or authority. Instead, the data gets stored and distributed across a network of nodes. The nodes can be standalone computers or servers that participate to run the network.
One of the main benefits of IPFS is that it enables users to access and share data in a more efficient and secure way compared to traditional centralized file-sharing systems. In a centralized system, data is stored on a single server or a small group of servers, which can be vulnerable to hacking, data loss, and censorship. In contrast, IPFS stores data on a distributed network of nodes, making it more resistant to these types of threats.
Another advantage that IPFS offers is allowing users to access and share data even if the original source is unavailable. This is possible because the network stores multiple copies of each file on different nodes. Users can now access the file from any node that has a copy. This makes it particularly useful for preserving data that risks being lost or deleted, such as historical documents or media
Content-based Addressing System
IPFS uses a content-based addressing system, which practically means that each file is identified by its content rather than its location on the network. This allows users to access and share files using a unique identifier called a content identifier (CID), which is basically a hash of the file’s content. The CID remains identical even if the file’s directory changes within the network. It makes accessing and sharing files super easy without worrying about their location.
IPFS also supports versioning, which means that users can track and access different versions of the same file over time. This preserves a file’s history and also helps for collaborating on documents or other types of data.
Filecoin FAQ
Frequently asked questions about Filecoin.
Who created Filecoin (FIL)?
Juan Benet, an American computer scientist who studied at Stanford University, founded Filecoin. Benet is also the creator of the Interplanetary File System (IPFS). He established Protocol Labs in May 2014, and participated in the Y Combinator program that summer with the goal of supporting both IPFS and Filecoin, as well as other projects. There’s also the Filecoin foundation as a non-profit that helps with the project’s development.
How to participate in the Filecoin (FIL) network?
There are several ways to participate in the Filecoin network:
- Become a storage miner: Storage miners (storage providers) contribute storage space to the network in exchange for FIL rewards. To become a storage miner, you’ll need to set up a node and configure it to store data for the network. You’ll also need to have enough storage space available to contribute to the network.
- Become a retrieval miner: Retrieval miners are responsible for retrieving data from the Filecoin network at the request of clients. To become a retrieval miner, you’ll need to set up a node and configure it to retrieve data from the network. You’ll also need to have a good internet connection and sufficient computing power to retrieve data quickly.
- Use the network as a client: If you want to store or retrieve data on Filecoin’s network, you can use a dApp to connect to it and make transactions. Examples of dApps that use the Filecoin network include ChainSafe Files and Estuary.
What are the benefits of using Filecoin (FIL)?
There are several potential benefits to using Filecoin compared to centralized data storage solutions:
- Cost: The creation of a larger open market for data storage may lead to lower prices.
- Scale: By combining the storage capacity of millions of computers globally, Filecoin can create a large storage network.
- Economy: Filecoin utilizes existing resources instead of building new storage computers.
- Safety: A decentralized network with no single point of attack makes it more difficult to compromise, unlike services like Dropbox or iCloud that have been hacked in the past.
Final Thoughts
Filecoin provides an immensely cost-efficient solution that could not only transform the existing databases but effectively add to the infrastructure required to integrate the rest of the unconnected and unbanked world. Meanwhile, another solution for the unbanked and the unidentified is our dua matchmaking ecosystem, which will integrate DeFi solutions with DUA token. This will bring a financial layer to +500k users of the dua Love app. Learn about DUA here and follow our Twitter for updates!