Buy Filecoin FIL

What is Filecoin?

Filecoin (FIL) is a decentralised storage network designed to store humanity's most important information. It is an open-source, public cryptocurrency and digital payment system that operates on a blockchain-based cooperative digital storage and data retrieval method.

How does Filecoin work?

Filecoin utilises blockchain technology to create a decentralised marketplace for data storage and retrieval. Here are the key components of its operation:

1. Blockchain Technology:

   • Tipsets: Filecoin uses a chain of tipsets, which are sets of blocks with the same height and parent tipset, allowing increased network throughput.
   • Actors: Filecoin employs actors, similar to smart contracts, objects with a state and methods for interaction.

2. Consensus Mechanism:

   • Expected Consensus (EC): Filecoin's probabilistic Byzantine fault-tolerant consensus protocol. Miner election is proportional to the storage power contributed to the network.
   • Proof-of-Storage: Instead of proof-of-work or proof-of-stake, Filecoin uses proof-of-storage, requiring miners to demonstrate that they have correctly stored data over time.

3. Specific Algorithms:

   • Distributed Randomness: Utilises Drand, a verifiable random beacon protocol, ensuring a fair and unpredictable leader election.
   • Weighting Function: EC uses a weighting function to secure the network by selecting the chain with the highest weight to add new blocks.

4. Smart Contracts:

   • User-Programmable Actors: Developers write and deploy actors, which can interact with built-in actors using exported APIs.

What are the potential use cases for Filecoin?

Filecoin is utilised across multiple industries due to its unique features. Here are some notable use cases:

1. Decentralised Cloud Storage: Provides a secure alternative to traditional cloud storage.

   • Projects: Fleek, GenRAIT, Lighthouse.

2. Web3 and NFT Storage: Stores Web3 native NFT and metaverse/game assets securely.

   • Projects: NFT.Storage, Audius.

3. Healthcare Data Management: Enables secure and compliant storage of sensitive healthcare data.

   • Projects: GenRAIT, Nuklai.

4. Media and Entertainment: Stores and manages HD video files for film production businesses.

   • Projects: Independent content creators.

5. Backup and Disaster Recovery: Offers secure, off-site backup solutions.

   • Users: IT services for disaster recovery.

6. Filecoin Virtual Machine (FVM): Supports data onboarding, curation, monetisation, and DeFi services.

   • Use Cases: Data management tools, decentralised finance applications.

What is the history of Filecoin?

Filecoin has undergone several key developmental stages since its inception:

• Initial Coin Offering (ICO): Launched with an ICO, Filecoin raised capital but faced criticism over its distribution method which favoured early investors.
• Developmental Milestones: Overhauled the initial mining rewards mechanism after a miner strike, refining its protocol to ensure viability.
• Collaborations: Partnered with institutions like the Shoah Foundation and Internet Archive, demonstrating its applications in preserving historical and cultural data.
• Ecosystem Growth: Continued to support developer and storage provider communities through the Filecoin Foundation, fostering expansion and adoption.

By addressing centralised storage risks and inefficiencies, Filecoin aims to offer a secure and cost-effective solution for data storage and retrieval.