The Story of Creating a Major Decentralized Storage 

Filecoin is a leading decentralized storage solution. Unlike centralized storage solutions like Google and Amazon S3, it offers more security against data breaches. Additionally, the trusted parties dictate the prices for the data storage services. Juan Benet, through his Filecoin innovation, aims to address these issues

How Filecoin is Decentralizing Data Storage

A community of customers with available space becomes Filecoin’s data storage providers, removing the influence of trust parties on market prices and centralization risk. 

Tokens will only be available after the release of Filecoin’s genesis block. Protocol Labs has a comprehensive token allocation plan to ensure that every member of the community benefits. 

The plan includes creating and disbursing 30% of tokens at Genesis. Out of the 30%, 10% will go to the investors, 15% to the team at Protocol Labs, and 5% to the Filecoin Foundation.

Out of the remaining 70%, miners will receive the reward for replicating the files on the tokens. The system will offer a reward, and a miner will earn it for mining the Filecoin data storage space. 

As soon as the genesis block is released, mining will be possible. The Filecoin community consists of the client, storage miner, and retrieval miner. A miner will buy a hard disk to enable them to mine the Filecoin data storage space. Storage mining and retrieval mining are two important processes in the Filecoin network. 

Community Backlash

Filecoin was created and developed by Protocol Labs, founded by Juan Bennet in 2014. 

On August 10th, 2017, Protocol Labs opened the ICO to the public, and it closed within an hour. Filecoin’s ICO raised $275 Million, including the $52 Million pre-sale amount.

As per US regulations, the ICO was open to investors with $200K in income or a net worth of $1 Million. This led to backlash from community members who felt that Filecoin excluded small-time investors. Filecoin’s ICO saw significant partnerships with investors such as Zk Capital, Unique Square Ventures, June Fund, Winklevoss Capital, Andreessen Horowitz, and others. 

It’s important to note that the Filecoin (FIL) ICO was not about the tokens as no tokens exist yet. Therefore, Filecoin sold the tokens as a Simple Agreement for Future Tokens (SAFT). 

In the storage mining cycle, miners pledge their storage space to the network and receive orders from the storage market. The network then seals the orders, and miners must prove their commitment to storing the files. 

In the retrieval mining cycle, miners are responsible for retrieving files from the network when requested by users.

The Miner receives orders from the retrieval market and then sends the retrieved pieces to the client. Miners provide proof to assure the network of accountability and public verifiability, confidentiality, retrievability, integrity, and incentive compatibility.

The team working on the Filecoin blockchain is facing many challenges and figuring out the mechanisms, is not an easy task. However, they have already achieved several successes, which gives confidence to both clients and miners that everything will be resolved eventually. 

Summary

Filecoin’s ICO raised $257 million in just an hour, making it the largest to date. The blockchain is still in development and will offer storage and retrieval markets for the community to take advantage of once tokens become available with the release of the Genesis block.

Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.