Decentralized storage network Filecoin launches its long-awaited mainnet today, creating a reason to look back at what it is and why it’s relevant.
Filecoin is one of the top initial coin offerings (ICOs) of 2017. When its ICO ended in September, 1 FIL token was worth USD 5, after having raised a grand total of almost USD 258m (including USD 52m, raised in the presale round). Meanwhile, after Gate.io released early trading in FIL, its price hit USD 160 today.
As to what Filecoin is and wherein lies its relevance, the team behind the project decribes Filecoin simply as “a decentralized storage network designed to store humanity’s most important information.”
But this is one loaded statement describing one highly complex system – if not one of the most complex created within the blockchain industry so far.
Among a number of other elements, it involved a detailed, multi-layered testnet, the Filecoin implementation teams (Chainsafe and Soramitsu), a large participation of miners, as well as of storage clients, network partners, and ecosystem developers (such as Textile, Open Work Labs, Fleek, Truffle, Figment, Zondax, Digital Mob); calls, classes, show & tells, meetups, hackatons, a Launchpad Accelerator, global participant contributing with their resources to help generate secure parameters for the Filecoin network, etc.
The Filecoin team claims that the demand for data storage is vastly increasing. Therefore, what it aims to be, and what it might become, is a global marketplace for storing and retrieving data – allowing users to buy and sell unused storage. It could become a decentralized version of the centralized giants we know and use en masse today. It stands to reason that they might eventually rise as competition to those considered authority in the web and data storage arena, such as Google Cloud, Amazon Web Services, Microsoft Azure, Oracle, and IBM.
“Unlike centralized cloud storage services, which back up data in ways clients can’t change or verify, Filecoin allows clients to easily express their own preferences for reliability and cost,” claimed a recent document by Protocol Labs, the team behind this storage solution, detailing the inner-workings of Filecoin’s economy.
Airbnb for storage
Among major benefits, it argued that all participants benefit from a so-called ‘deal’, wherein those with extra storage and computing power provide it to others for a fee, while those who need it, get it for a fee. “Storage demand on the network will shape the storage offering provided by miners,” said the team.
Additionally, “Filecoin will be a collaboratively constructed economy that will evolve over time,” and will eventually include things like repair miners, app miners, and Filecoin loans.
They added that,
“Just as Airbnb allows homeowners to compete with hotels, the Filecoin Protocol will allow any willing and able storage provider to join a storage network and offer their storage for sale, while offloading auxiliary tasks like tooling, documentation, and branding to the Filecoin Network itself.”
So, rather than having a few entities dominate the entire space, holding the monopoly over it, and controlling the network and everything in it – including all the data, prices, and who is allowed to use the service – placing billions of users away from their data in the process, Filecoin said on its website that it wants to create a new storage and economic model through a “hyper-local” storage.
This new model works by enabling clients to see the available storage across the world and their market prices prior to storing data on the Filecoin network, after which they send the data to the chosen miner for storage. Miners are incentivized to store the data properly with FIL, the storage fees, and a chance to win block mining rewards, while the network verifies that the data is securely stored through cryptographic proofs. The client can also choose to find data they want, pay the miner to retrieve the files, and as a file becomes more popular, other miners can rehost it across the world, bringing it closer to many more users.
“From small mining rigs to advanced data-centers, everyone benefits by working together and providing a robust new foundation for humanity’s information,” said the website.
Preparing for the space race
To test this vision, the Web 3.0 data-storage project launched an incentivized testnet, dubbed Space Race, with the final prize pool of FIL 1.5m, and it seems to have been popular. The results currently show 230 PiB (pebibyte) reached from 360 miners globally, 86% average storage deal success rate, and 98% average retrieval success rate. The top miner got c. FIL 203,541. “…and 24⁄50 top miners reached a 100% success rate on their storage deals,” said the team in the roadmap, highlighting the records the mining community has reached.
Meanwhile, crypto exchanges have started announcing trading support for the FIL token, such as Gemini, which will enable trading and custody support, as well as Kraken which said that the trading will begin as soon as the mainnet goes live.
Crypto exchange OKEx said that they’ll be marking the Filecoin mainnet launch with a FIL/USDT Perpetual Liquidity Contest with a USDT 60,000 Prize Pool, and the opportunity to enter into a lottery to win an iPhone.
Per Lennix Lai, Director of Financial Markets of OKEx, just two hours after its FIL/USDT perpetual swap was launched in July 2020, more than FIL 5,500 were traded on the exchange, with a notional value of around USD 990,000.
The Cryptosphere seems to be ready for the launch as well, with ShapeShift CEO Erik Voorhees and Filecoin investor, for example, describing it as “easily one of the most professionally built, carefully-executed, and *valuable* projects that has emerged from the ICO era.”
Blockstack CEO Muneeb Ali is “excited about the Filecoin launch” as well, shortly describing “the Filecoin journey” in his Twitter thread.
8) Filecoin launch is tomorrow.
As a friend, peer, and investor, I’m rooting for the success of Filecoin.
People stopped dreaming big; Juan is not one of those people.
Thanks for trailblazing, and good luck tomorrow! 🚀
— Muneeb (@muneeb) October 14, 2020
And others seem to be focused less on the pre-launch enthusiasm, posing questions instead.
Is there any reason to not view Filecoin as a depressing utility coin remnant of the ICO era that still assumes that it was ever a good idea that goods & services are paid in separate currencies for each, and that it won’t cause unnecessary friction dragging the project down?
— Eric Wall (@ercwl) October 14, 2020