What Is Filecoin (FIL)?

The Filecoin protocol, according to the official website, introduces a decentralized storage network (DSN) based on blockchain. As claimed by the whitepaper, with the DSN scheme, multiple independent storage providers offer data storage and data retrieval to clients on the Filecoin network. In other words, the Filecoin DSN handles storage and retrieval requests via two verifiable markets, i.e., the Storage Market and the Retrieval Market, respectively. The two markets have the same structure but different design. 

The Storage Market allows clients to pay storage miners to store data. The storage market is a verifiable market through which clients (buyers) place matching orders with storage miners (sellers). Once matched, orders are submitted to the orderbook (sets of orders). That way, the public gets access to all the orders recorded on the Filecoin blockchain. Additionally, both clients and storage miners must pledge and commit to their resources, where storage miners provide constant proof of storage for an order. In brief, the Storage Market protocol is divided into two phases: order matching and settlement:

• Order Matching: Storage miners and clients submit their orders to the blockchain to record the same in the orderbook. When orders are matched between storage miners and clients, both parties sign a deal order and submit it to the orderbook.

• Order Settlement: Storage miners lock their orders, generate proofs of storage, and submit them to the blockchain regularly.  

The Retrieval Market allows clients to retrieve data by paying retrieval miners to deliver the data. In the Retrieval Market, clients can request retrieval of a specific piece from an order. Retrieval miners obtain pieces from the Retrieval Market or by storing them from being a storage miner. Participants in the retrieval market follow an off-chain process of exchanging pieces and settling prices. Therefore, Retrieval Miners and clients exchange data without the network knowing about it. Mostly, the retrieval miner splits the data into multiple parts, and the client pays for each part that is retrieved. In brief, the Retrieval Market protocol is divided into two phases: order matching and settlement:

• Order Matching: Clients and retrieval miners submit their orders to the orderbook by “gossiping” their order. When orders are matched, the client and the retrieval miners establish a micropayment channel.

• Order Settlement: Retrieval miners send small parts of the piece to the client, and for each piece, the miner gets a signed receipt from the client. Retrieval miners present their delivery receipts to the blockchain for rewards.

Filecoin, trading under the ticker FIL, is the native cryptocurrency on the Filecoin network.

History of Filecoin (FIL)

The website states that Filecoin (FIL) was founded by Juan Benet and his team at Protocol Labs. Juan Benet also developed the InterPlanetary File System (IPFS). Benet is a computer scientist from Stanford University. He started Protocol Labs in May 2014. 

Filecoin Foundation is an independent organization recently built for the development of Filecoin. The organization also performs off-chain governance for the token blockchain. Before, Protocol Labs was responsible for the off-chain governance. Filecoin’s official mainnet launch was on October 15, 2020. Also, on October 13, 2021, Filecoin became the official storage provider for Flow blockchain.

How Are New Filecoin Tokens (FIL) Created?

Filecoins or FIL can be earned by miners when they provide storage to clients on the Filecoin network.

The Filecoin consensus implements two types of consensus protocols as proof of storage, i.e., proof of replication and proof of spacetime. Filecoin’s proof-of-storage consensus is compatible with any consensus protocol that allows for verification of Filecoin’s proofs. In a useful proof-of-work structure, miners do not have to spend their resources in wasteful computations while they can just store data under the proof-of-storage system. Thus, miners receive rewards when they present data proofs to the blockchain.

 Moreover, proof of replication allows storage givers to prove that data is stored to its own dedicated physical storage. The protocol creates unique physical copies that enable a verifier to ensure that multiple copies are not stored in the same storage space. Next, proof of spacetime allows storage providers to prove that they stored some data over a specified amount of time.

How Many FIL Coins (FIL) Are There?

Filecoin has a total supply of 1.97 billion FIL coins.

How to Buy a Filecoin Token (FIL)

Filecoin is available for trading on many major crypto platforms. Coinbase supports Filecoin.