Filecoin is an interesting project that ranks high compared to other large-cap projects. At the moment, Filecoin is ranked 24th on Coinmarketcap with a total capitalization of up to 7 billion USD.
The project also received a lot of attention from the media when it raised 257 million USD from the ICO event in 2017.
So what is Filecoin? In this article, we will go through the basic information about the Filecoin project and the FIL token.
What is Filecoin?
The Filecoin network is a peer-to-peer system for storing files on the internet with built-in incentives (IPFS) to ensure that data are stably stored over time.
In order to establish itself as the "storage protocol" of the decentralized web, the project intends to provide a platform where developers can build services comparable to Dropbox and iCloud that do not rely on centralization.
The InterPlanetary File System (IPFS) is a peer-to-peer file-sharing network, which was established by the Filecoin team. IPFS allows users to receive and host content in a similar way to BitTorrent. Filecoin advances IPFS by ensuring file replication across a decentralized network and facilitating economic incentives through the use of a dedicated blockchain.
Everyone can join Filecoin to store their files or earn money storing others' data. No single company controls storage availability or pricing. Instead, Filecoin enables open data storage and recovery markets.
How does Filecoin work?
The working architecture of Filecoin is summarized in these steps:
Filecoin miners have computers connected to the internet and storage space offered for hire by clients. The miners are storage providers who are rewarded with FIL for supplying storage to the network. There are three types of miners in the network:
- Storage miners: Responsible for storing files and data on the network.
- Retrieval miners: Responsible for providing quick pipes to retrieve files.
- Repair miners: To be implemented.
Users are clients or individuals in the market who are looking to rent storage from storage providers who have integrated with the Filecoin protocol.
The agreement between a user and a storage provider is called a deal. There are two types of deals which are:
- Storage deal: This is when a miner gets the data from a client to store.
- Retrieval deal: This is when miners withdraw data from the network.
Once a storage agreement is formed, miners must continue to show good faith by storing their clients' data. Filecoin's consensus mechanisms are essential in eliminating third parties. A client and a miner agree to store data using Proof-of-Replication (PoRep) and Proof-of-Spacetime (PoST).
By using PoRep, the storage provider produces a unique data encoding. An immediate answer from the storage provider means the data has been encoded and is secured. Otherwise, the storage provider is not reliable if he fails to respond quickly.
So what role does IFPS play in Filecoin's system?
Along with enabling users to share and store data, IFPS is responsible for removing potentially harmful information such as activity addresses and web addresses compared to centralized storage services such as iCloud.
Users can manually select which information they wish to share with the platform, and this information is then converted into a complex hash code to provide users with additional protection.
However, the IFPS network does not have any built-in incentivization mechanisms. Filecoin is trying to solve this issue by encouraging users to participate in store long-term verifiable information. Therefore, the marketplace can be scaled up more and storage providers can earn more rewards.
What makes Filecoin unique?
The Filecoin project is unique because it allows anyone to become a storage miner in the open market while not being controlled by any entities.
The working architecture also allows developers to offer many advantages over traditional storage applications such as Dropbox or Google Cloud:
- Cost-efficient: The market is wide open for everyone and this should decrease the price when using the network.
- Scalability: It will be possible to establish an enormous storage network by connecting millions of computers throughout the world.
- Security: Powered by many computers, Filecoin can prevent single-point attacks compared to other centralized applications.
- Flexibility: Miners can be located from anywhere in the world. There is an open chance for everyone who wants to join the network.
What is FIL Token?
FIL is the native utility token of the project. The token has several use cases including:
- Payment for storage: Clients pay in FIL when a deal is made for data storage. These fees are automatically paid into a miner's associated withdrawal wallet and are temporarily locked upon receipt.
- Block rewards: Miners receive FIL for constructing a new block. Every active miner on the network has a chance of receiving a block reward, which is proportionate to the amount of storage space they are currently contributing.
- Retrieval fees: Users can use FIL to pay retrieval fees to miners if they need the data back.
- Staking/Slashing: FIL balances are reduced if a miner fails to offer reliable uptime or attacks the network. If slashed, miners must either submit a share or use pending storage fees as a bond.
- Gas Fees: FIL is required as a payment for every transaction that has computation and message limits in the network. The file will eventually burn a portion of the gas fee, the rest will be incentivized to miners.
Detailed information about FIL Token
FIL Token Metrics
- Ticker: FIL
- Contract: 0x0d8ce2a99bb6e3b7db580ed848240e4a0f9ae153
- Decimal: 18
- Blockchain: Binance Smart Chain
- Token Standard: BEP-20
- Token type: Utility
- Total Supply: 109,712,354 FIL
- Circulating Supply: 109,712,354 FIL
FIL Token Allocation
- 70% to Filecoin Miners
- 15% to Protocol Labs
- 10% to Investors
- 5% to FilecoinFoundation
FIL Token Sale & Release Schedule
The Filecoin ICO ended on September 7, 2017, with a total of 257 million USD raised from the sale of 200 million FIL tokens to public and private investors. Investors contributed 205 million USD to the public offering.
The vesting schedule is as below:
How to mine FIL token
As mentioned above, anyone can choose to become a miner to earn different types of rewards by contributing to the network.
How to store FIL token
You can store FIL token on Coin98 Super App with these steps:
Step 1: Open Coin98 Wallet & click Receive on the home screen.
Step 2: Search FIL token.
Step 3: Click on the correct result, copy the wallet address and send FIL to this address.
Roadmaps and Updates
Team, Investors, and Partners
Juan Benet is the Founder and CEO of Filecoin. He graduated from Stanford University and previously had experience in network research and computer development.
Filecoin has raised a total of 258.2 million USD in funding over 7 rounds. Their latest funding was raised on Sep 7, 2017 from an Initial Coin Offering round.
This is one of the rare projects invested by Winklevoss Capital.
Winklevoss Capital: Winklevoss is one of the oldest investors in the cryptocurrency market. Winklevoss Brothers' net worth has reached 6 billion USD this year.
Is FIL a good investment?
This article has provided some of the main ideas related to the FIL token and its implications. Still, it is important to note that there are a few key points that investors should take into account before making investment decisions:
- The project offers a unique solution for storage in the Web 3.0 era. As mentioned in the above sections, Filecoin has many advantages over other centralized storage services. The working architecture also allows everyone to join the network for the scalability of the network.
- The platform mainnet only launched in October 2020. However, the amount of storage available has expanded drastically in the network.
- The Filecoin project is a unique idea, and it also offers many advanced features for a storage service project. However, the project's total revenue has recently reduced dramatically. This demonstrates that the project's growth is heavily reliant on network effects and industry trends.