In this article, we will focus on the Filecoin network as a peer-to-peer, decentralized storage network.
Since centralized services are spreading all around the globe. This leaves data, on a server much far away from the user. It allows the companies to dictate the prices, dictate the decision, and dictate who can use their services. Therefore, A few large companies dominate the whole market.
An open market was much needed. This is where filecoin comes in, with new storage and economic market model.
With hyper-local and efficient storage, filecoin is striving to break the hold of those few big companies and end the limitation of storage.
Filecoin is a peer to peer decentralized storage network. It facilitates an open market so that a single company won’t control the available storage and its price. In filecoin users pay storage miners to store and retrieve their files. What is a storage miner? Storage miners are the computer that stores the files, and with time these miners prove that the storing of files is correct. Later on, we will discuss what these proofs are.
File coin enables storage providers to use their storage in the open market. Users on the other hand will be able to use that storage. Miners earn economic incentives for doing so. As filecoin works on the Blockchain it has a native currency known as “FIL”.
How does Filecoin work?
When a client wants to store data on the filecoin network. The client views available storage miners and their market prices. Miners compete to win the storage contract. The client selects from the winning miners.
Once the deal is made, the clients send the data and the miners store it. To earn a FIL, the native currency of filecoin, miners must provide proof that they are storing data properly. The network calls these proofs, storage proofs. The network, then, via cryptographic proofs, verify that the secure storing of data takes place.
Miners submit their proofs to the network in the new blocks, and they also validate new blocks from the network. Only the correct blocks are accepted to be part of the network.
Now the question is what incentives do the miners get?
Miners earn the deal storage fee over time and they earn the chance to win block mining rewards.
When a client wants a file, he looks up the miners who may have it.
Then, the client selects the fastest and affordable miner. Afterward, the client pays the miner and retrieves the file.
Furthermore, As more people request a file and the file gains popularity, miners all around the world can pick it up and rehost that file. As a result, the file’s location gets closer to the user requesting it. So, Data spread to where it’s demand lies. Access optimizes as the data flows worldwide.
As stated above, miners provide proof to ensure that the data is stored securely. These proofs are stage proofs.
Proof Of Replication:
In filecoin, sectors store pieces of data. You seal data in sectors in a slow encoding process. Then, commit proof to the Blockchain. Sealing is an intense amount of work. To fake it, you will need to do that particular work using the original data and replicate the specific same sectors. Proof of replication utilizes both proofs of storage and proof of space.
Proof Of Storage:
These are simple proofs that the miners have data in their possession. Miner can either give you the data. Also, the miner can give data with is not the original data, but can be used to reconstruct original data, in case the miner is malicious and wants to hold the original data.
Proof Of Spacetime:
In proof-of-spacetime, the verifier can check if a prover is storing her/his outsourced data for a range of time. The intuition is to require the prover to
- generate sequential Proofs-of-Storage (in our case Proof-of-Replication), as a way to determine the time
- recursively compose the executions to generate short proof.
Quirks Of Filecoin:
The features of filecoin which give it an edge on other storages are:
Anyone who wants to store files or earn for storing files can join the filecoin network. No permission is needed to join the network. For negotiating the storage and retrieval deals, the open market is available.
In filecoin, the prices of storing and retrieving files are dependent on supply and demand. One single organization is not making all the decisions. Instead of locking in customers through marketing. Storage, reliability, and speed are the points for which the miners compete.
Filecoin makes sure that files are stored on reliable computers that are connected to the internet. As storage is paid, it provides a feasible reason for files to stay available.
Filecoin has a built-in self-healing process to detect faulty miners. The files kept by faulty miners are redistributed to reliable miners. The network does so by continually verifying that the files are stored correctly.
Filecoin generates verifiable traces in the process of self-healing. These traces verify that files store correctly over time. Users can efficiently use these traces to verify that the files storing were correct even when the user went offline. Verifiable traces also enable the observer to notice if the miner has been faulty or offline in the past.
Choose Your Miner:
Users can choose any miner as they please for storing as well as retrieving files.
Store Data Of Other Blockchains:
Filecoin can provide storage for other Blockchains. So now, the other Blockchains can store large amounts of data using filecoin. In the future, filecoin will interoperate with transactions on other Blockchains.
The files are addressed via their content. Not like the traditional way in which files either have a URL or a unique identifier.
Distribution On Network:
Filecoin enables all the miners around the globe to pre-fetch the popular files and distribute them to nearby users. These miners are referred to as retrieval miners. This prevents network traffic to overload a single computer. Retrieval miners earn rewards for making network traffic flow smoothly, and files download quickly.
Filecoin and Traditional Storages:
In traditional storage, corporate pricing departments set the prices. A handful of companies are in the lead. Companies self-report their statistics and there is a high bridge people need to cross to become a storage provider. In filecoin things differ. The open market sets the price. Many small and independent storage providers are part of the network. Network checks the statistics which are verifiable publicly.
To get more insight regarding the comparison, read.
With all the features, filecoin shows great potential. Filecoin price today is $30.88 with a 24-hour trading volume of $105,380,690 at the time of writing this publication. It has a circulating supply of 32 Million coins. Binance is the current most active market trading it.
Also read our article, Aave Protocol Explained
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