A decentralized, cost-effective, censorship-resistant, and robust storage network
Filecoin is an innovative infrastructure that stores your most important information in a safe, affordable, and decentralized way. As concerns grow over the existing problems of centralized cloud storage services, including data leaks, Filecoin emerges to bring users a potentially more secure, decentralized, and yet cost-efficient solution.
- Filecoin is a decentralized storage network that transforms cloud storage into an algorithmic storage marketplace.
- The decentralized ecosystem by Filecoin is censorship-resistant, cost-effective, open-source, and community-driven.
- The FIL token facilitates and stimulates the Filecoin economy.
In October 2018, Facebook was fined £500,000 for its role in the Cambridge Analytica scandal, in which data from 87 million users leaked and was misused in political campaigns. When data storage relies on a centralized entity, incidents such as data breaches seem almost inevitable. Not to mention that centralized services encounter interruptions, which leaves their clients and end-users deprived of access
Filecoin introduces an open-source, censorship-resistant, market-based, decentralized network that can potentially fix the pitfalls of the current centralized cloud infrastructure. Imagine a decentralized network that’s always online, and where all participants benefit when consumers use the service.
What is Filecoin?
Filecoin is a decentralized storage network on which anyone can rent out or buy storage space. Instead of handing over important data to one company to manage, users can store data on computers distributed worldwide with Filecoin. In addition, the infrastructure allows users to decide the pricing and contracts for storage space purchases. Let’s have a closer look at the different roles in Filecoin’s network and how they function.
In Filecoin’s decentralized storage network, there are two service providers: storage providers and retrieval providers. Customers pay storage providers to keep their data. Storage providers then store this data using mathematical proofs to verify integrity, accuracy, and privacy. Retrieval providers are responsible for retrieving and delivering data when required by customers. As a result, the Filecoin network creates a marketplace where providers can sell their services, and customers can bid on the solutions that fulfill their needs.
What makes Filecoin an ideal data storage solution for Web3?
Filecoin revolutionizes file storage, promising to bring various advantages over centralized solutions.
- Decentralized. The Filecoin network consists of over a thousand storage providers worldwide. It aims to be a robust file storage protocol without relying on centralized service providers.
- Censorship-resistant. Leveraging its decentralized network, Filecoin provides censorship-resistant storage that is foundational in offering users an integral web experience without losing control over critical personal data.
- Cost-Effective. Filecoin removes the intermediaries to create a significantly more cost-effective, peer-to-peer marketplace for storage. Although storage prices vary from deal to deal, Filecoin has kept the cost as low as 3% of what Amazon charges for its services.
- Robust. Filecoin has over 3,987 storage providers collectively contributing nearly 16.2 EiB of storage capacity to the network. For comparison, the 10 billion pictures on Facebook cumulatively require approximately 1.5 petabytes of storage. As a result, Filecoin has more than 10,000 times the storage capacity of Facebook.
- Verifiable. Filecoin introduced two novel proofs for users to verify the integrity and location of clients’ data, Proof of Replication (PoRep) and Proof of Spacetime (PoSt). PoRep verifies that a piece of data is replicated in a dedicated physical storage space. PoSt verifies that the data is stored properly over time.
- Free competition. Open participation on Filecoin creates a free market that can potentially enable efficient pricing and spontaneous innovation.
- Open-source. Filecoin advocates an open and collaborative network. Filecoin’s code is viewable and free for anyone to access and contribute to. Currently, Filecoin has almost 10,000 open-source contributors in the network.
- Offline-data transfer. Filecoin allows users to transfer massive datasets offline to a storage provider while still verifying the deal on-chain. This critical characteristic fundamentally optimizes the transfer of enormous datasets, saving users significant amounts of money and time.
- Community-driven. Anyone can submit a proposal regarding Filecoin’s upgrades.
Filecoin‘s dynamic economy explained
Filecoin ‘s network lays a solid groundwork for its economy to thrive. Within the Filecoin Economy, there are three distinct markets and participants in the network. Apart from the storage and retrieval markets mentioned before, the third is the token trading market, where participants trade the ecosystem currency with customers, storage providers, and other token holders. The interaction between primary stakeholder groups is illustrated in the figure below.
Filecoin created FIL as its native ecosystem token to facilitate and stimulate the economy. It is used as a medium of exchange and as collateral on the Filecoin network. For example, FIL serves as the currency for users to pay storage providers for their service. Additionally, storage providers lock up FIL to contribute to storage capacity as well as ensure data security in the Filecoin network. If storage providers cannot prove the data is stored via PoST, the collateralized FIL tokens might be used for the penalty.
According to the Cloud Storage Market Report, the global market size for cloud storage is projected to grow from $50.1 billion in 2020 to $137.3 billion by 2025. With people’s digital life moving into the era of Web3 and the metaverse, a highly interactive, immersive Internet life will undoubtedly call for a much more humongous infrastructure for online data storage.
With decentralization and permissionless collaboration at its core, Filecoin builds an infinitely scalable data storage network. What’s more, the free market in the network can significantly reduce the service price. Last but not least, a decentralized network means there is no single point of failure, making it harder to encounter interruptions or allow hackers to hijack the network.
To learn more about the incentive-driven and self-sustaining Filecoin data storage network, check out the channels below:
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