Filecoin can offer an appealing alternative to purchasing Amazon S3 storage buckets, DropBox space, and getting locked into the same cloud storage contracts. With the right infrastructure, anyone can buy and sell storage on the Filecoin network while setting their own prices and making their own contracts. Let’s see how it works.
What is Filecoin (FIL)?
Filecoin is a decentralized storage network that lets anyone rent out storage space. In the same way, anyone can buy storage on the network. Instead of having to trust only one company with important data, it can be split up and stored on different computers around the world.
Filecoin was first introduced in 2014 when Juan Benet released the whitepaper: Filecoin: A Cryptocurrency Operated File Storage Network. The proposal is a blockchain network similar to Bitcoin, but where nodes in the network can store data, guaranteed by a proof-of-retrievability component. Filecoin is developed by Protocol Labs.
Filecoin is sometimes called an incentive layer on top of IPFS. This just means that users are incentivized to rent out their storage space by getting paid in FIL tokens. So, can you use Filecoin to send Christmas photos to Mars or Venus? Not yet. IPFS is a peer-to-peer data storage and retrieval protocol that’s built using a more decentralized approach. Unlike HTTP or HTTPS, it doesn’t rely on centralized servers to store data.
Filecoin raised over $250M in their 2017 ICO, which was a record at the time. The Filecoin mainnet was subsequently launched in October 2020.