Filecoin is a decentralized system for data exchange and cloud storage. Developed by Protocol Labs, a research and development company that specializes in Web 3.0 solutions. Filecoin is a blockchain-based on IPFS (Interplanetary File System). FIL is the network’s native cryptocurrency, acting as a payment instrument that connects buyers and sellers in the IPFS ecosystem.
The purpose of the Filecoin peer-to-peer network is to allow distributed storage of files on the Internet and receive economic incentives for providing free space on the hard drive. No one centrally controls the processes of storage and pricing. The markets are absolutely open and anyone can participate in them.
Participants who need space to store data pay so-called miners — people who provide free space on their computers. Opportunities for ordinary users and miners (“storage providers”):
- Users can independently choose a compromise between cost, storage capacity, and speed of their work. Filecoin-based applications can negotiate data storage with any miner present on the network. There is no need to implement different APIs for each storage provider, unlike centralized cloud systems. In addition, users have the opportunity to check the safety of their data at any time by viewing the evidence on the Filecoin blockchain.
- Storage providers can sell their unused space on the open market. It can be both organizations and individuals – any computer connected to the network or a dedicated system built specifically for Filecoin with a large amount of memory. As soon as the provider installs the Filecoin protocol, it immediately gains access to the marketplace where users will interact with it. No need to create your own storage API or spend money on ads. Barriers to entry are as low as possible.
FIL is a means of payment for storage on the Filecoin Network. When a miner starts lotus-devnet (opens a new local node via Lotus wallet), the node balance gets 500,000 FIL to work on the testnet. In the future, in this cryptocurrency, he receives payment for the space provided to him on his hard drive. FIL can be used to make transactions with other members of the Filecoin network. For mining, you need to install a Lotus wallet (more on that below).