$1.14

Filecoin is a decentralized storage network designed to securely store important data. It raised $205 million during its initial coin offering in 2017, with an original target launch in mid-2019, but the mainnet launch was postponed to expected mid-October 2020. Conceived in 2014 as an incentive layer for IPFS, Filecoin allows users to pay for storage and retrieval services using its native token, FIL. The system operates on a blockchain that records participant commitments, utilizing proof-of-replication and proof-of-spacetime. It is open-source and community-governed, enabling developers to build cloud storage services similar to Dropbox. Anyone can join to store data or earn by providing storage space.

Filecoin was created by Juan Benet, who also developed the InterPlanetary File System. Benet is an American computer scientist educated at Stanford University. He founded Protocol Labs in May 2014 and subsequently participated in Y Combinator that summer, aiming to advance IPFS, Filecoin, and other projects.

Filecoin distinguishes itself by offering decentralized data storage, contrasting with centralized providers like Amazon Web Services or Cloudflare. Its decentralized nature ensures data integrity, easy retrievability, and resistance to censorship. Users can act as custodians of their own data, and the network's design promotes broader web accessibility. Since miners earn block rewards by storing data, they are incentivized to act honestly and maximize storage capacity, aligning their interests with network health.

Filecoin involves three participant types: clients, storage miners, and retrieval miners. Clients pay for data storage or retrieval, placing orders in the storage market. Storage miners store client data in hard drive sectors, with actions recorded on the blockchain, and receive rewards and fees. Retrieval miners fulfill client requests for data extraction, operating in an off-chain retrieval market; they can also serve as storage miners. Built on IPFS, the system uses peer-to-peer blockchain storage. Clients select miners and pay in FIL, while miners execute deals and earn rewards. More storage offered increases reward chances, and clients can verify data storage through proofs.

Protocol Labs describes Filecoin's tokenomics as a 'market for data' where users sell storage space. Five stakeholder groups can trade tokens: developers, clients, miners, token holders, and ecosystem partners. There are three markets: file storage, file retrieval, and token exchange. In fall 2020, the 'Space Race' testnet involved 400 miners, boosting network capacity by over 325 pebibytes; approximately 3.5 million FIL tokens were allocated to participants.

Filecoin relies on proof-of-replication and proof-of-spacetime for security. Retrieval miners compete to serve clients quickly, earning FIL fees, which encourages a network of nodes to replicate and preserve files. Storage miners compete for contracts to provide storage for specified durations. When a deal is made, the miner seals the data to create a unique copy. Storage miners receive FIL as deal fees and can also mine blocks for additional rewards.

Gemini and Kraken have announced support for FIL ahead of the mainnet launch, while Huobi plans to list it after the mainnet goes live.