As most early adopters of cryptocurrency have realised, blockchain is a viable technological solution for far more than just finance. The developers of Filecoin have recognised this, and aim to use blockchain to create a cloud based ‘filing’ system that promotes free speech. Like other cryptocurrencies, Filecoin is also able to be used to buy goods and services, but it’s true utility is far more interesting than this aspect of it. In this article I will delve deeper into this project to help you make your own informed decision about it.
What is it?
As explained above, the basics of the technology is that through the utilisation of blockchain, a cloud based storage system can be created that can’t be reversed or tampered with, like all blockchain technology.
The network is available to anybody, and due to the nature of it, economies of scale are created that makes the product far cheaper than any competitor. Importantly, nearly anything that is digital can be stored through Filecoin, such as websites, scientific files, government files and even just plain old photos. The intention of Bitcoin was to help create a trustless monetary system, and Filecoin simply takes that idea one step further by creating a trustless storage system. Imagine a world where there is no risk of corrupt officials altering documents as they simply physically can’t. There appears to be no apparent downside to this idea, although I am sure those officials believe there would be...
How is it mined?
Unlike other cryptocurrencies that require an immense amount of wasted computing power to undertake proof-of-work, in Filecoin, the computing power is the network and the mining. The more storage a node offers to the network, the more chance they have of solving the next block and therefore getting rewarded. There is also another way to mine, and you can think of this miner as the veins of the system, as they get rewarded to quickly find the necessary information. There is another type of miner that is yet to be implemented into the system.
Anybody in the world is able to become a miner simply by offering storage space to the network, or by working the retrieval. Apart from being highly democratic and anti-monopolistic, it allows data to become a commodity which is one of the best ways to reduce the price of something
Deals
The Filecoin system's core is based around deals. This adds another layer of equitable treatment to all parties involved and limits the chances of price gouging for an informed party. The client and miner have to agree on the price, duration of the contract and how much storage is involved in the contract. As it is a global marketplace, this process is fast and efficient with both parties knowing what to expect beforehand.
This allows the marketplace to be incredibly competitive and allows the smaller players to get a chance. As the service is the exact same regardless of the provider, as long as Filecoin continues to grow, the costs will decrease for the users.
Current uses of Filecoin:
Filecoin promises to be an interesting new technology that can not only bring blockchain mainstream, but improve humanity at the same time!
