Filecoin(FIL)

Filecoin is a peer-to-peer (P2P) decentralized storage network built on the Interplanetary File System (IPFS) protocol. It dubs itself as a project ‘designed to store humanity’s most important information’ – large volumes of critically important public data, for instance, historical docs, literature data, scientific papers, encyclopedias, creative commons data sets and more.  Both Filecoin and IPFS are founded by American computer scientist Juan Benet, founder of Protocol Labs.

While the Filecoin mainnet went live in October 2020, its native token FIL was launched via an ICO (Initial Coin Offering) in 2017. Filecoin was created with the idea of bringing an economic incentive system and an independent marketplace functionality to the IPFS network. 

Unlike big cloud storage organizations like Cloudflare, Google Drive and AWS (Amazon Web Services) which are fairly centralized in nature, Filecoin aims to tap into a large pool of independent storage providers who can offer storage space for a fee (in FIL crypto) to the network’s users. It leverages the decentralized model to safeguard data’s location, facilitating its easy retrieval and censor-free management. Anyone can store their data, and anyone can offer storage space. 

The workings and governance of Filecoin are overlooked by an independent organization named Filecoin Foundation, dedicated to continuous development and evolution of the protocol, as well as its related technologies.

FIL price

FIL price stayed mostly in the vicinity of $30 after the Filecoin mainnet launch in October 2020, till the year-end. It closed 2020 at a value of around $24 per token. A market-wide bullish sentiment saw FIL coin gaining some upward momentum in February 2021. It rallied upwards for almost two months, peaking at an all-time high of $238 on April 1, 2021. FIL’s fully diluted valuation stood at close to $470 billion at that point. 

Thereafter, the price of FIL saw slow movement during the months that followed, dropping to $40 by July 21, amid a broader crypto market corrective phase. 

FIL coin’s next noteworthy surge came in the early phase of 2021’s second crypto rally in September. FIL price had regained some lost ground in August and made a gradual ascent to reach $120 by Sept. 5. However, it could not sustain the $100+ price level for long, and slid below $100 within three days. According to our FIL live price chart, the coin lost most of its 2021 gains in the first half of 2022, breaching multiple support levels, and dropping to an all-time low of $6.71 on May 12, 2022.   

How FIL works

Filecoin works based on an open data market model, wherein any internet-connected computer (called ‘storage miner node’) can sell its storage space to Filecoin users (clients, developers etc.) looking to rent. The renters pay fees in FIL tokens, to the storage miner nodes. While selecting a specific storage miner, users can choose customized storage options based on their redundancy, speed and cost requirements.

The storage providers are required to implement the Filecoin protocol on their systems, to get access to the open market where they can compete with other providers to sell their services. 

Filecoin uses a novel combination of Proof of Spacetime (PoSt) and Proof of Replication (PoRep) as its consensus algorithm, to secure its network. Storage miner nodes are continuously competing with each other to bag storage contracts from network users, for specific lengths of time. In addition, they’re required to pledge collaterals in three different forms – initial commitment, vesting block rewards and incentive alignment between provider and client – to become a part of the Filecoin ecosystem.

Once a network user and a storage miner node agree on a deal, the latter holds the former’s data in a sector (on the hard drive) and ‘seals’ that space to create a unique copy of the data. A PoRep is created as a result of this sealing, which is validated only once.

After a PoRep is created, the PoSt algorithm runs continuously to determine and ensure uninterrupted storage of the user’s data on the storage miner’s system. The miner is penalized if it can’t prove continued storage at any given point, during the agreed-upon timeframe, thus ensuring good behaviour on their part.

FIL, the native token of Filecoin, is used for transacting on and participating in the Filecoin network. Users pay storage providers in FIL, while the latter also use the token as collateral to take part in the Filecoin’s operations.

FIL news, updates and highlights

In an important FIL news, it was announced in October 2021 that Filecoin has become the official storage collaborator for the Flow blockchain. The collaboration aims to empower Flow’s users and developers by accelerating end-to-end ownership of NFTs and their associated media assets, through easy decentralized storage.

Filecoin again made headlines in May 2022 when Filecoin Foundation announced a partnership with Defense contractor Lockheed Martin (LMT) to explore the possibility of hosting IPFS storage nodes in space, in some satellite or space-faring platform. The step will help satellites play the role of data relays, and reduce the latency involved in communication with Earth-based servers.

Frequently asked questions about FIL

• Can I stake or mine FIL?

Yes, it’s possible to both mine and stake FIL tokens. In order to do that, you’ll need to run a storage miner node on the Filecoin network.

• What are some of the best wallets for FIL coin?

Filecoin recommends using the Lotus or Glif wallet implementations on Ledger hardware wallets to store your FIL tokens. Other wallets for FIL storage include Trust Wallet, Fox Wallet, ImToken, Cobo, BlitsWallet and Math Wallet.

• What can I do with my FIL coins?

You can use your FIL coins to pay for Filecoin’s storage services or stake them to set up a storage miner node. Alternatively, the coin can also be traded on established crypto exchanges.

• How can you buy FIL cryptocurrency?

You can buy FIL coins with fiat or cryptocurrencies on well-known crypto exchanges. Look out for FIL trading pairs with coins like ETH, USDT, BTC, XRP and more.