What is Filecoin (FIL)?

3 min read

January 21, 2019July 10, 2019

Would you rent out your house on AirBnB? How about just renting out some space on your computer?

Filecoin wants you to do just that.

What is Filecoin?

Filecoin is a decentralized protocol which enables anyone to rent out spare storage space on their computer. Likewise, anyone can buy storage on the network.

By allowing anyone in the world to join the network, it can create a huge source of data storage. As more and more systems become computerized, it will be needed to satisfy the increase in demand.

It is being created by Protocol Labs, spearheaded by Juan Benet, a computer scientist and engineer.

What are the advantages?

They include:

• 💰 Cost - By creating a larger free market for data storage, this should drive the price down.
• 📈 Scale - Bringing millions of computers around the world together will create a huge storage network.
• 🌍 Economical - Instead of building new storage computers, Filecoin makes use of existing resources.
• 🔒 Safety - While Dropbox and iCloud have been hacked, a decentralized network means there is no single point of attack, making it harder to compromise.

What are the disadvantages?

Some issues are:

• 🚗 Speed - Instead of accessing one server, it needs to access multiple servers to piece together documents when required. This depends on servers being online and internet speeds.
• ❌ No working product - This is just temporary but investors have put a lot of faith in something that they aren’t able to even test.
• 📵 Dapp - By processing transactions using the cryptocurrency filecoin, this creates a high barrier to entry as someone has to buy another coin and exchange it to use the service.

Is it safe?

Saving your documents on someone else’s computer is risky. However, Filecoin splits up data, a bit like shredding it, so nobody can piece it together. However, it knows how the data fits together and rearranges it when it’s requested.

This means the host cannot simply hack the document on their computer and gain access to the user’s files. If they tried to hack it, they would find just a stream of meaningless data.

"There’s a ton of storage in the world that’s not getting used. Think of it like Airbnb. You had people with rooms weren’t being used; Airbnb built a marketplace for them," Juan Benet, founder of Protocol Labs.

Does it have competitors?

While Filecoin hasn’t launched yet, some other companies have started to get the ball rolling.

Siacoin already has more than 500 storage providers with a capacity of 3.9 petabytes, or 3,900 terabytes. It’s cryptocurrency is currently tradable on crypto exchanges.

Storj has launched a private alpha of its decentralized storage platform which is set to launch in early 2019. Its cryptocurrency STORJ is also live.

The future

Cloud storage providers like Amazon and Google rack in a lot of money. This shows there is big demand in the market. If customers decide to trust decentralized services they may find themselves saving a lot of money. This money would also go straight back into the economy as it would go to individuals and small businesses. This could have a really positive effect on people’s lives.