Files, files, files. We have so many of them- photos, word documents, PowerPoint presentations, and Excel spreadsheets. They are a huge part of our lives and the number of files in the world is growing by millions every single day. You probably have thousands of files on your devices and on storage clouds.
As time goes by, more files will be made and more storage will be needed. When we need more storage what do we do? Typically we buy it on a platform like Google Drive or Dropbox. They seem pretty secure, and the pricing isn’t too bad. That being said, it does seem quite dangerous to store files our files on a centralized network, and since they’re a borderline monopoly, is what we’re paying really what the storage is worth?
Is there an alternative?
Introducing Filecoin: a decentralized storage solution that aims to “store humanity’s most important information.”
Decentralized storage solutions share storage responsibilities across many independent operators which together form a single storage network.
For a simile, look at a company like Airbnb. You had millions of people around the world with rooms that weren’t being used. Airbnb made a marketplace for it, and look at the impact that has had on the world.
This is what Filecoin is doing. It’s a marketplace for storage. There are a lot of people out there with excess storage space that can be used. Filecoin is connecting people looking for storage, to those with storage. It’s like a decentralized alternative to Google Drive and Dropbox.
What makes Filecoin better than its alternatives?
The hyper-competitive market means the prices for storage are fairer compared to those offered by centralized alternatives.
What does ‘centralized’ mean? One point. A centralized point means there’s a clear, single point of attack. So a decentralized alternative is more secure and less likely to be taken down or hacked.
If Google or Dropbox wanted to make more room for storage, they would have to spend lots of money on space and machinery. Whereas, with something like Filecoin, all the storage in the world that isn’t being used can now be put to use, instead of making a new storage. This makes it very resourceful.
Now worst of all, as centralized entities, companies like Google and DropBox withhold the right to delete, withhold or share your files. Imagine you have a file with secret information, and the company shares it without your permission. This links to the greater issue of centralization and censorship but we can get into that another time. Filecoin on the other hand is censorship resistant, meaning you’ll never be in a position where your files are held without your consent, or you’re unable to access them.
How does it work?
Users browse for storage types and locations. Then, miners bid for the storage contract. Clients select the winning miners and then the data is sent, encrypted, segmented, and stored through the miner.
What does FIL do?
First, let’s list the use cases of the FIL token. The FIL token is used by clients to pay for storage on the network.
It is also used to reward miners for executing tasks such as storing data, securing the network, and paying transaction fees.
You don’t have to be a Filecoin user to take part in the ecosystem. Holding the token will help provide liquidity to the network, and anyone can do so.
How is Filecoin secured?
In the Filecoin network, nodes, also called retrieval miners, compete to serve clients with data as quickly as they can. They are then rewarded with FIL as rewards (like BTC on Bitcoin), which encourages people to become miners and secure the network.
These nodes are in constant competition for contracts to provide storage to clients. The two factors that go into it are the amount of storage needed, and how long storage is needed. When a miner and client agree on a deal, the storage miner holds the client’s data in a sector and “seals” it to create a unique copy of that sector’s data. Storage miners are rewarded with FIL by clients as deal fees, and miners can also mine blocks and receive block rewards.
