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What is Filecoin (FIL)?

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What is Filecoin

Technology is ever quickly evolving, with major advancements being made every two years or so. With such rapid development comes the challenge of safely storing all these petabytes (1 million gigabytes) of data. 

Centralized storage, such as AWS, Azure, and Data Centers, seemed like a quick fix until we discovered how vulnerable they are to hacks, physical deterioration, censorship, and the bureaucratic manipulation of the government.

Filecoin has addressed this problem for almost 5 years, with its influence on the upswing. However, there’s more to the story.  

Centralized Data Storage Systems

The web is at a crossroads, and the centralized data systems that currently power the web are increasingly under attack. Data breaches can cost companies billions of dollars, and it's not just businesses that suffer; we all take a hit whether we know it or not.

With the recent Facebook scandal, we've seen how much our personal information can be exploited by malicious actors for profit or political gain.

We need to decentralize the web to protect ourselves from this type of abuse in the future. One way to do so is by becoming a miner, meaning you contribute unused storage space on your desktop computer. 

Filecoin mining is entirely different from the regular Bitcoin mining of solving complex computational problems. Filecoin mining is the process by which you contribute your computer's processing power to help store and distribute data on a decentralized web. 

It is not difficult to get started on your desktop. However,  there are a few things to consider, like how much electricity it takes to mine, the penalties for accidentally deleting or losing files (which usually vary), and so on. Nonetheless, if you get everything right, you succeed in both securing the networks and getting paid in newly minted digital money, Filecoin (FIL).

What is Filecoin?

Filecoin is a decentralized storage system that is changing the way data is stored. By leveraging the decentralization of blockchain technology, Filecoin eliminates censorship and gives power back to the people. Safeguarding data integrity and making it easy to retrieve, access, and erase on the Blockchain.

But what exactly does this mean? How exactly does it work? And more importantly, how does this affect you? Let's look at the technology that powers Filecoin and try to answer these questions.

How will Filecoin change data storage?

Protocol Labs developed Filecoin in collaboration with Stanford University, UC Berkeley, and Princeton's Center for Information Technology Policy. Filecoin's initial coin offering (ICO) raised $257 million in the presale stage and $205 million in the public sale stage.

The following are the problems associated with centralized data centers:
- They are costly to operate due to high real estate prices and cooling costs. 
- They require a significant upfront investment.Scaling up is difficult.
- There is no incentive for them not to hoard their resources because they already have sunk-cost investments.
- There are natural limits on how much data can be stored because these facilities are physically limited.

This is why Filecoin implements two new proofs to guarantee the network's integrity. These systems run in the background as part of the Filecoin system's base.

The proof-of-replication (PoRep) mechanism ensures that a miner has stored the number of copies of data that it claims to have. On the other hand, the proof-of-spacetime (PoSt) mechanism verifies that a miner has kept the data for the agreed-upon period.

These systems enable Filecoin to detect faulty miners on its own. Every miner's history is saved by the protocol. Each miner is graded on dependability, reliability, pricing, and availability, and miners with a stellar reputation earn more tokens. 

Miners (or keepers, as they are fondly called) are motivated because they earn Filecoins based on the amount of hard drive space they use. This results in a more robust and reliable network that is less likely to crash, as centralized systems do now.

Its easy-to-use software, called Coinhive, has made it possible for anyone to mine crypto using their computer without having to invest in expensive hardware.

What does the future hold for Filecoin?

With tera and petabytes of data to handle, everyone is on the lookout for the next big thing in this space. Which begs the question - what does the future hold for Filecoin? Of course, no one knows for sure, but one thing is clear - it will have its share of challenges.

With ever-increasing competition, VC lawsuits to deal with, and unreliable miners, Filecoin has had its fair share of demons. However, thanks to the ingenuity, tenacity, and dogged creativity of the community, they’ve been able to implement sustainable schemes that have set the coin to hit new all-time highs.

One such creative solution worthy of mention is Filecoin Plus, and here’s why: The inability to identify files in the Distributed Ledger Technology (DLT) world slowly became a problem for Filecoin. Storage miners are rewarded for committing to storing client data. The challenge is that there is no way of knowing whether the data being stored is coming from a unique third party or the storage miner hosting the data. This makes it simple for miners to make a lot of money by filling their dedicated hard drive space with their data.

Filecoin Plus introduces a short layer of trust to prevent these bad deals from happening. This version can run an elaborate data deal vetting process that helps Filecoin to get the right files for its clients.

Technology is dynamic, hence, it will be interesting to see how this plays out.

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