FileCoin: Worth Buying...?

Filecoin is a decentralised protocol which allows users to rent out computer space to users who need storage space.

The backbone is known as the Interplanetary File System (IPFS), a peer-to-peer storage network where users pay for data storage and distribution services in $FIL.

The native token of the FileCoin network is FIL which is a proof of work token that is used to reward people fro providing storage space and which users wishing to store data need to pay the miners who store their data and secure the network.

There are two levels of POW:

• proof-of-replication, which allows the network to confirm the replication of data to a unique locatioN
• proof-of-spacetime, which verifies that the data is stored for a specific period of time
  The IPFS has the capacity to allow for a range of data types to be stored: from videos to NFTs, and developers can build their own dapps specialising in specific storage solutions, by building their own dropbox style dapps, for example.

FIL: The rise and fall in price

There was a lot of hype surrounding FIL back in the crazy DEFI spring/summer of 2021 when the price soared to over $180.

However, it now sits at just $4.24 ATW.

Possibly this means it's a buy, given that this is one of the few projects with an actual use case which is currently up and running!

Storing data...

From a storage-user perspective the amount you pay will depend on how much space you want, how much proof-of-storage and how often you want to be able to retrieve your data.

Providing storage

From a storage-provider perspective you will be rewarded in FIL depending on how much storage you provide and the length of time you are prepared to provide that storage for.

You can use this online return calculator to work out how much FIL you will earn dependent on storage costs, lock up and FIL price.

Providers may range from individuals renting out spare capacity on their individual servers to larger scale operations devoted solely to the IPFS.

It's a huge system...

ATW (August 2020) the network boasts some impressive figures with a network capacity of over 16 EiB and over 3000 large data clients currently storing data on the network.

Final thoughts: FIL worth buying?

I really like projects with a clear use case, and this project looks like it could potentially see an increase in demand going forward as Web 3.0 grows.

However it isn't clear how you either provide storage or rent storage, all I see access to from the main website is forms to be filled in with one's contact details.

And then there is that massive historic price spike and subsequent massive dump, one has to wonder whether FIl can rally signficantly from this point.

And there is competition out there: from ICP and SIA for example.

So while I like the concept and what appears to be an actual current use case, it's not 100% clear how one actually goes about using this particular coin ATM!

Further reading

Make Use of - What is Filecoin