Filecoin was launched in 2017, though its mainnet began operation in 2020 has an underlying concept to offer secure storage systems for files, thereby reducing the issues that people face when they use centralized solutions. It was created by Juan Benet, a notable computer whiz, who thought it wise to create this ecosystem on IPFS. The utility token of the ecosystem is FIL, which is used to enjoy the features that Filecoin offers.
There are different participants in this ecosystem, and each group has different purposes. For participants – Filecoin miners that have extra storage features, they can rent them out and earn FIL in return and they must store and retrieve data. These miners are encouraged to offer more storage services by giving those with high storage space a higher probability of being chosen by the network.
On the other hand, the clients are those that need storage space and want to enjoy the benefits that come with decentralized storage solutions like Filecoin. To use this feature, they have to pay a FIL token to the network.
Filecoin is decentralized, meaning that users do not have to worry about their data and files being corrupted. To ensure the anonymity of the file stored, it is encrypted by breaking it into tiny bits, then sent to the miners that store them. Only the user with the private key can easily collate the data or files and access them easily.
Filecoin’s Architecture
1. Consensus Mechanism
Filecoin’s consensus mechanism is the Proof of Spacetime, which ensures that everything within the ecosystem is functioning effectively. The duty of this consensus system is to verify if the storage provider or the miner is offering top-notch services to the users. Before a block can be mined, every miner is made to submit a PoST to the chain, and from there, the network sees if the duties are fulfilled.
Only those that are involved in offering storage solutions are eligible to be miners on Filecoin. To ensure that they work effectively, they have to offer collateral and abide by the tenets of PoST. Filecoin has designed strategies to prevent the storage miners from trying to game the system. Storage miners are monitored to ensure that they are not collecting the standard fee and storing fewer copies of files, and this is done through the PoRep system, which is a Proof of Replication consensus system. This system requires that the storage miner shows that they are not fleecing the system by storing lesser data.
2. Filecoin’s Participants
As earlier mentioned, there are different participants in Filecoin.
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Storage miners
They offer the extra storage space and end up being paid for that. These participants are allowed to choose their fees and their working capacity.
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Clients
Clients decide on which storage miners tick their boxes and pay for their services. Once they have chosen the storage miner they want, they enter into a smart contract agreement with the storage miner, and the FIL token is locked. In the end, the smart contract is published in the blockchain.
- Retrieval miners
The third set of participants, like their name states, are involved in retrieving the files that the clients want. For carrying out this service, they are paid in the nature token and their fees are based on: the size of the file, and the speed of retrieving.
Problems That Filecoin Solves
- Filecoin will solve centralized storage issues.
- Filecoin will alter the content delivery terrain.
- Filecoin offers alternative revenue streams
• Filecoin will solve centralized storage issues.
Before the coming of the cloud storage system, many organizations had a data room filled with massive gadgets that stored their files. People had to deal with cassette tapes, floppy disks, and the likes to store their files. With the introduction of cloud solutions, many dropped their old storage systems and opted for cloud innovations.
The coming of blockchain technology is altering storage by providing the option of storing one’s data and files in a distributed storage system, which doesn’t suffer from the risk of a single point of failure.
Filecoin is offering storage solutions that plug the loopholes noticed in centralized platforms. Its underlying concept is to disrupt the world of centralized storage solutions. With Filecoin, users can access a list of different storage solutions globally, while enjoying affordable pricing.
• Filecoin will alter the content delivery terrain.
Filecoin’s innovations are not restricted to only storage services, as it intends to do more than that. It is not just interested in solely offering innovative and decentralized storage solutions that will rival what is obtainable in cloud storage systems.
At the moment, this ecosystem has set its eyes on the content delivery network (CDN) platforms.
Data storage may be important, but it needs a system that makes the delivery of the data easier. This is what CDN does. Users want their data to get to them on time, and this may not be possible if the file is stored in a location that is far from where the user resides. Some of the files that are stored may be needed frequently than their counterparts. To ensure that these frequently needed data can get to their users quickly, a CDN could create multiple copies of the file and scatter them globally.
• Filecoin offers alternative revenue streams
Clients that want the best of storage services can access a list of innovative storage providers within the ecosystem. This means that storage providers can key into an alternative revenue stream by leasing out their idle storage capacity to consumers. It could open up a new level of decentralized apps, as developers can create storage apps that can be integrated into Filecoin’s ecosystem to earn by offering free storage space. Companies that have invested a lot in storage systems, and have some lying idle can earn FIL for leasing it out to those that need it.
The Verification Concept
Filecoin has added some concepts in its architecture to ensure that the ecosystem functions effectively, and one of them is the verification concept. Storage providers that cater to the needs of verified clients will earn a lot more compared to their counterparts.
Before consumers can be verified, they have to show their identity to the ecosystem through an easy process. They must be verified by a decentralized network of verifiers. One reason that the concept was introduced is to make the storage providers improve their services to clients. When a storage provider convinces a verified client to use their services, they earn higher block rewards. Verified clients will only want to work with efficient storage providers, meaning that the latter would have to offer innovative storage solutions if they want to stay ahead of their competitors.
Why Filecoin May Be Around For A While
As more innovations are created in the world, there is an increase in demand for storage solutions due to the creation of more big data. NFTs for example are being minted daily, and need a decentralized storage system to safely store them. As the demand increases, the cost may increase, which in turn, creates a vacuum that must be filled. Filecoin is filling the gap by creating a decentralized ecosystem, where storage providers that have idle storage systems can interact with clients that need encrypted and safe storage facilities.
People and companies are clamoring for a different type of storage solution that is different from the centralized systems. They need a decentralized storage system that is free from a single point of failure, easily accessible, and caters to the issue of redundancy.
The clients determine the features that they want in a storage solution, allowing them to enjoy the perks that come with flexibility. They can customize their storage systems and communicate their needs to the storage providers. It is unlike traditional systems, where the clients have to use whatever solutions are presented to them.
Centralized storage systems can easily be blocked by the government of a country, but that can’t be said for their decentralized counterparts. A typical example was when the Turkish government decided to block citizens from accessing the popular encyclopedia, Wikipedia. According to the government, accessing that encyclopedia would negate the actions that it had carried out to protect national security. Once the ban was placed, citizens could no longer access it, but the activities of some hacktivists changed this trend. The hacktivists copied the Turkish Wikipedia, then saved the version on the IPFS network, allowing people to easily view it. Since it was on a decentralized network, it was impossible for the government to bring it down or stop its citizens from accessing it. This is one of the importance of decentralized storage systems like Filecoin.
In Conclusion
- Filecoin has mastered the art of incentivizing the different participants in the ecosystem to act in a manner that benefits its operations. This is decentralization at its peak.
- It solves centralized storage issues.
- It is altering the content delivery terrain.
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