- Filecoin is a decentralized protocol that allows users to rent out spare storage on their computer.
- One analyst sees it as the most promising innovation in crypto, because of its potential use cases for huge tech giants.
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Dan Ives, managing director at equity research firm Wedbush Securities, is known for covering big tech stocks like Apple, Tesla, and Microsoft. But in a note last week on the day before the Coinbase direct listing, Ives tossed out this comment at the end: "We believe there are a number of business models attacking this new market opportunity, with privately held Filecoin one of the more impressive strategies we have seen in the market."
Filecoin is a decentralized data storage protocol. Unlike other blockchains, it allows anyone to rent out spare storage on their computer, and anyone can buy storage on the Filecoin network. This makes the Filecoin network a huge data vault—and this is why Ives sees it as crypto’s greatest innovation to date.
Filecoin network has big potential for big tech companies
Ives elaborated on his take in a phone interview with Decrypt. "Today, the markets are dominated by large software companies. Filecoin offers developer application builders significantly cheaper storage options in a very secure, unique format,” Ives said. “That’s very applicable, especially just given the amount of data that needs to be stored.”
In other words, Ives believes the Filecoin network has applicability completely outside of crypto. Some of the world’s biggest companies—Amazon, Google and Microsoft to name just three—rely on centralized cloud storage.
According to Ives, it’s “just not feasible” for these companies to continue storing all their own data, which is where the Filecoin network comes in, an innovation that is already “12 to 18 months ahead” of companies that—according to Ives—are already well-versed in blockchain, like IBM.
“There is a clear supply demand in terms of what they’re going after as a business model,” he added.
But that doesn’t mean the Filecoin network will only benefit software companies. Ives suspects that—assuming the Filecoin network does catch on in these industries—there will be a trickle down benefit for crypto too.
Filecoin’s success would be crypto’s success
Filecoin's token (FIL) is up 98% in the past month, and nearly 3,000% in the past year. But Ives’ bullishness on Filecoin is not just a reaction to its recent price surge. Ives and Wedbush Securities have been beating the Filecoin drum since January, when Filecoin’s price was largely static. On January 19, a Wedbush newsletter described Filecoin as the “Airbnb” of storage. “In our opinion, we will start to see the beginnings of a hybrid environment between traditional cloud and blockchain as early as 2022,” the newsletter read.
Ives describes the Filecoin network as a “golden goose" for the crypto industry: “We can all talk until we’re blue in the face about cryptocurrency and its value and applicability with the emotional bull/bear argument,” he said, adding, “The one thing that’s not even debatable is blockchain becoming a much bigger trend, and having real applicability.”
Of course, if Filecoin does become the data solution of choice for the world’s biggest companies, that success will translate to a much higher FIL price than we see today. “I believe it’s a currency that could double over the next 12 to 18 months because of the penetration capabilities they're going after," Ives forecasts.