Filecoin is a decentralized data storage solution similar to Airbnb, allowing users to lease out storage space on their PCs via this network. Many users have a lot of free storage space on their devices that they rarely use. They can generate passive income by renting out storage space to individuals that need to keep information safe.

It might also be an alternative to Google Drive and Microsoft 360. However, because it lacks the functionality supplied by major software programs, it may take some time to compete with them.

What is Filecoin?

Filecoin is a decentralized storage company that allows customers to purchase storage space at a low cost. At the same time, it allows users to generate passive income by renting out storage space from their computers. Filecoin is devoted to being the quickest and cheapest storage solution, but its acceptance rate is directly related to its success. It can give a better storage option if used on a wider scale.

Filecoin competitors

Filecoin is not the only decentralized storage solutions company in the crypto world; other companies, such as Storj and Siacoin, offer comparable services. Siacoin has a network capacity of 2 petabytes, but Storj has a network capacity of more than 100 petabytes.

Filecoin history

Protocol Labs released Filecoin as open-source software. The business also proposed alternative technologies for current internet protocols such as Libp2p and IPFS (a successor for the web’s hypertext system). Juan Benet founded Protocol Labs. Famous investors, including StarX, Naval Ravikant, Digital Currency Group, and Fred Erhsam, helped the business raise money.

Several venture capital companies, including Sequoia Capital, Andreesen Horowitz, and Union Square Ventures, spent roughly $257 million in the initial coin offering in 2017, along with hundreds of additional investors. It was one of the biggest fund rounds in the crypto business.

The Filecoin Mainnet was released in October 2020. Within a month, more than 70 businesses joined the Filecoin network, resulting in more than 1 exbibyte storage space by November 2020.

Filecoin Utility

Cloud storage systems have grown dramatically over the last several decades. Companies used to keep their data on local servers, but they have begun to migrate to cloud alternatives such as AWS, HPE, and Dell since they are faster and less expensive.

However, because cloud solutions are governed by centralized authority, businesses continue to store the most valuable data on local servers. As a result, people want to keep their data protected. Furthermore, because the conversion procedure is difficult, organizations remain with the same service provider for years.

Filecoin offers a more competitive approach, allowing them to switch from one provider to another easily. The best thing is that it creates a sense of security by offering a decentralized solution, which means businesses don’t have to worry about hacking efforts.

Safety

Filecoin, unlike iCloud and Dropbox, cannot be hacked since a blockchain network maintains data in the type of blocks that are difficult to hack.

Cost

Filecoin offers more cost-effective storage options to its customers by offering a broader free data storage market.

Scalability

It can solve the scalability problem by linking millions of computer systems worldwide.

Economy

Filecoin introduced the idea of storing data on existing computer systems rather than developing new storage units.

How Does Filecoin Work?

Filecoin is a decentralized storage system. Miners and customers make up the Filecoin network. Filecoin is a less expensive alternative to centralized data storage providers such as AWS, HPE, and Dell. Customers may obtain their desired storage space in a marketplace where miners compete to provide customer storage services.

Miners gain incentives from the Filecoin network based on the storage space they provide inside the network. Furthermore, users pay them a set fee for access to storage space. Miners are also in charge of producing new blocks by conducting several computationally hard operations. The Filecoin network employs two consensus mechanisms to ensure the integrity of the data saved.

Proof-of-Replication (PoRep)

This protocol checks the amount of data the miners claim they possess.

Proof-of-Spacetime (PoSt)

This consensus method verifies if the miner finished the storing procedure within the agreed-upon time frame.

Filecoin Mining

Users can join the mining process by installing the Filecoin program on their PCs. There are two kinds of miners on the Filecoin network.

Storage miners

These miners are committed to offering storage space to customers that want to save their data online. They exchange information about their computer’s available storage and other key specifications on the Filecoin open market. They also adjust the price based on current market prices.

Retrieval miners

These miners recover data from the Filecoin protocol at a client’s request. Clients in FIL tokens pay for the service fees. Fees may vary based on file size and response time.

Conclusion

Filecoin is a decentralized data storage solution based on the Airbnb model. It allows customers that have additional space on their devices but don’t want to use it. The network aims to provide the cheapest and quickest storage option possible.

Most enterprises now utilize this storage option because it delivers exceptional security at a low cost. If you have any questions regarding how Filecoin works, please contact us.