Protocol Labs created Filecoin, and it aims to offer a real use case for blockchain technology outside of finance. Filecoin is all about the files, but the system is decentralized; the users pay for the files to be stored, which helps with storage rewarded with the FIL tokens.
Since 2018, Filecoin has been on the Chinese radar, and different Chinese firms have started to market Filecoin cloud mining services. Filecoin is considered easier to mine, as no specialized mining devices are needed. Because of the speculation of price on FIL tokens, Filecoin is becoming very popular in China.
What is Filecoin?
Filecoin is a file storing network that is decentralized and rewards those users who store files. Those who keep the files are known as the storage miners. The users tend to pay for files to be stored, whereas the storage miners are rewarded for the work.
The distributed nature of Filecoin helps with peer-to-peer file storage and retrieval design. There is a native virtual currency with the platform known as FIL, and it is used to reward the miners. Web3 inspires it, and Filecoin can provide storage services to other decentralized platforms as well.
How Filecoin works?
- For users
The platform users are charged for file storage, but these charges depend on whether they prefer speed over redundancy and vice-versa. It is worth noting that the storage prices are also affected by demand and availability.
- For storage miners
A storage provider can either be an organization or an individual on the Filecoin protocol. To become a miner, one needs to have free hard disk space and an internet connection. The miners are also able to access the entire pool of Filecoin users.
There is a standard application programming interface for the miners’ smooth usage, and they advertise their availability. The storage providers rely on storage space, speed and reliability to woe the users and attract the rewards.
Chinese are seriously considering Filecoin
Although the Filecoin protocol doesn’t need specialized mining devices for access, China’s eyes are developing Filecoin mining hardware. The Chinese investors are speculating on the price of FIL; in fact, they have already been into Filecoin since 2018.
As cryptocurrency mining is popular in China, it is not surprising that these firms have attracted huge sales. The blockchain explorer data reveals that the leading storage miners on Filecoin are located in China, and these miners account for more than 80% of the network’s testnet storage mining power. This tremendous uptake in storage mining in the Asian country can be attributed to its love for Bitcoin and other cryptocurrency mining activities. Although it is banned to trade Bitcoin in China, most of Bitcoin’s mining power is concentrated in the country at around 65 percent.
Filecoin was launched after multiple delays but was met with much fanfare. There was significant attention drawn from the crypto communities; especially the Chinese investors are very interested in it. These investors are betting heavily on the mining hardware of this particular platform and its native token FIL. Several exchanges were quite keen to list FIL tokens. Despite a few hiccups in the schedule, Filecoin seems like the most professionally built, carefully executed, and worthwhile project.