Academy by CoinMarketCap takes a deep dive into Filecoin (FIL), a Web 3.0 file storage system that provides confidentiality and security to its users.
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How Does Filecoin (FIL) Work?
Here’s how the whole ecosystem operates:
- On the Filecoin network, peers interact across secure channels to broadcast information through the network, transmit files amongst themselves, and discover additional peers, resulting in a well-connected swarm in which information such as blocks and messages moves quickly even when vast numbers of peers are involved.
- Filecoin Nodes, also known as Filecoin clients, are peers who sync the Filecoin blockchain and validate the messages in each block, resulting in a global state once applied.
- Filecoin Nodes can also disseminate various types of messages to the rest of the network. A client, for instance, can publish a message to send FIL from one address to another. Nodes can offer Filecoin miners storage and retrieval services, and miners can charge for them as they are completed.
- Miners contribute to the network by completing various types of transactions and adding new blocks to the chain, for which they receive FIL rewards.
- Retrieval and storage deals happen on the Filecoin network.
- Clients and storage miners make arrangements to store data in the network through storage deals. Once a deal is made and the miner receives the data to store, it must repeatedly show to the chain that it is still storing the data in accordance with the agreement in order to get rewards. Otherwise, the miner would be sliced, and FIL will be lost.
- Clients and retrieval miners make agreements to retrieve data that is stored on the network in a fast and reliable manner.
- Storage miners must demonstrate that they are storing data in accordance with the conditions of a contract. That implies they must save all of the information provided by the client and keep it for the entire duration of the transaction/deal. Miners show that they have acquired all of the data and have encrypted it in a way that is unique to that miner using their physical storage in a way that no other miner can replicate using Proof of Replication (PoRep).
- A dynamic BaseFee determines the number of fees burned in the Filecoin network, which is constantly changed based on network congestion parameters. One of the block explorers or viewing the current head can provide the current value.
- A number of gas-related factors are also connected to each message, and these parameters impact the number of rewards that miners receive.
- Actors are a state management software design paradigm. They are Filecoin's version of the Ethereum Virtual Machine's smart contracts and play a crucial role in the system. Any modification to the Filecoin blockchain's current state must be initiated by an Actor.
Unique Features of Filecoin (FIL)
Made for Users and Storage Providers
Users of Filecoin pay the network to have their data stored on storage miners that are computers that store files and demonstrate that they have been stored correctly over time. Anybody can join Filecoin if they want to keep their files or get paid to store other people's data, which means that no single entity has control over the amount of storage available or the pricing of that storage. Instead, Filecoin allows anybody to engage in open markets for storing and recovering data.
The blockchain of Filecoin stores transactions for sending and receiving FIL, as well as verification from storage miners that they are correctly keeping their files.
Filecoin allows customers to store their files at ultra-low fees and double-check that they are being stored appropriately.
By picking the miner with the best storage offer for their needs, users can choose their chosen trade-off between cost, redundancy, and performance. Filecoin-enabled applications can negotiate storage with any miner on the network. There is no need to build a new API for each provider, unlike centralized storage systems.
Users can check that their files are being kept appropriately at any moment by examining proofs present on the blockchain.
Filecoin is a cryptocurrency that allows storage providers to sell their space on the open market. People and organizations that run miners and earn FIL tokens are known as storage providers. A miner could be any internet-connected computer with free disk space or a specialized Filecoin-specific system with plenty of storage. The blockchain compensates miners for providing usable storage to the internet rather than for completing inefficient proof-of-work calculations.
A Great Platform for Miners
Deals for file storage and retrieval are made in open markets. Without requiring permission, anyone can join the Filecoin network. A miner requires only an internet connection and free disk space to run. Filecoin allows a vibrant ecosystem of numerous independent storage providers by lowering entrance barriers.
A Storage Platform for NFTs
The highlighting feature of Filecoin is its ability to hold the underlying digital assets for non-fungible tokens, which are proofs of ownership (NFTs). Digital art, music, and videos, for example, are far too large to be stored directly on a blockchain. As a result, the actual asset is stored on Filecoin's storage network, while art collectors acquire and transfer ownership certificates. The Filecoin network is used by OpenSea.io, the largest marketplace for NFTs, for permanent file storage and has handled over 1.17 million storage transactions and currently has over 32 million gigabytes of storage space.
Filecoin provides a legitimate economic rationale for files to remain available over time because storage is paid for. Files are saved on computers that are dependable and have good internet connections.
Storage That Can Be Verified
Filecoin contains built-in procedures for checking file history and ensuring that files have been stored appropriately over time. Every storage provider demonstrates that they keep their files up to date during each 24-hour period. Clients can quickly examine this history to ensure that their files are stored in the right fashion, even if they were not online at the time. Any observer can look up a storage provider's history and see if the provider has ever been faulty or unavailable.
A Solitary Protocol
Filecoin apps can store their data on any miner that uses the same protocol. There is no need to develop a new API for each provider. Applications that want to serve multiple providers aren't restricted to the lowest-common-denominator set of functionalities that all of their providers support.
Resilience to Censorship
Open Source Code
Both clients and storage providers operate on open-source code. Storage vendors do not need to create their own infrastructure management software, and the enhancements to Filecoin's code assist everyone.
Addressing the Content
When many users store the same file and make it public, thus not encrypting it, Filecoin makes the file accessible to anyone who wishes to download it. Downloaders can check that they have received the correct file and that it is undamaged regardless of where it came from.
Filecoin (FIL) Tokenomics
The total token supply of FIL tokens is 147,799,573, and the current circulating supply is set at 147,799,573.00 FIL.
Filecoin (FIL) Price
Filecoin (FIL) is now trading around $29.99 as of Jan. 12, 2022. Its 24-hour trading volume on exchanges is around $467,241,206.
Filecoin (FIL) Price Prediction and Future Outlook
It must be noted that Filecoin's blockchain is not only a place to store large files but also great storage for other blockchains. It is a fact that the top 10 cryptocurrencies worldwide have their own blockchains, and that is because of the trust these blockchains have in the eyes of crypto users. However, as Filecoin continues to grow and onboards several blockchains on its platforms, the chances of it becoming the top blockchain is possible. With this transition, the price of the FIL token can also skyrocket to the moon and beyond.