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What is Filecoin? ($FIL)

Jaiya Gill
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What is Filecoin? ($FIL)

What is Filecoin ($FIL)?

Filecoin (FIL) is a decentralized storage provider. It’s a cryptocurrency that aims to incentivize a global network of computer operators to provide a file sharing and storage service. It’s essentially an alternative to conventional storage solutions. It allows users to sell their excess storage on an open platform. Rather than trusting one company with your documents, they can be split up and saved around the world on different computers.

Filecoin’s advantages over centralized data storage solutions:

  • Cost: creating a larger free market for data storage should drive down the price
  • Scale: a huge storage network will be created by bringing together millions of computers globally
  • Economy: Filecoin uses existing resources rather than building new storage computers
  • Safety: a decentralized network makes it more difficult to compromise, so there’s no single point of attack. Unlike Dropbox or iCloud which have been hacked.

History of Filecoin

The Filecoin mainnet launched in October 2020. It was created by Protocal Labs and spearheaded by Juan Benet, a computer scientist, and engineer. Filecoin acts as the incentive and security layer for IPFS (InterPlanetary File System), a peer-to-peer network for storing and sharing data files.

How does Filecoin work in a nutshell?

On Filecoin you rent out your own storage space and can set your own price and terms. There is no one provider and anyone can rent out their space. This unlocks large amounts of data storage that would otherwise go to waste. Decentralizing the market create hyper-competitive prices for storage, as individual providers compete again others to offer the best deals. It intends to reduce redundancy and improve efficiency.

How is Filecoin used?

Filecoin is a peer-to-peer data storage and retrieval decentralized protocol. Users are incentivized to rent out their storage space by getting paid in FIL tokens. When someone has free storage available, they can become storage miners and can be responsible for storing data on the Filecoin network. People can pay FIL tokens to store and retrieve data. Filecoin uses end-to-end encryption and storage providers don’t have access to the decryption keys.

Buy the entire crypto market in a single token.