What is Filecoin?

Filecoin is a decentralized protocol that allows users to rent out spare storage space on their computers. Naturally, people can also buy available storage listed on the network.

The Filecoin network operates atop another protocol for decentralized file handling called the Interplanetary File System (IPFS). The two systems share many similarities, though the main difference is that while IPFS is free to use, it won’t earn miners any money. Filecoin costs money to use, but could also generate revenue.

Who created Filecoin?

Filecoin is an open-source software that was created by Protocol Labs, the same firm that created technologies like IPFS and Libp2p aimed at replacing existing internet protocols.

For example, IPFS is a system that could replace the Web’s hypertext protocol, which specifies that web addresses must begin with the prefix http://.

Protocol Labs was founded by Juan Benet, who co-founded a game developer called Loki Studios while studying computer science at Stanford. The company was acquired by Yahoo in 2013. Benet then participated in the Y Combinator startup accelerator to start Protocol Labs.

How does Filecoin work?

Users can store files on the Filecoin network by creating a storage contract with a miner, who is responsible for maintaining and verifying the files on the network. Miners are incentivized to provide storage and retrieval services by earning Filecoin for each successful transaction.

Filecoin also utilizes a proof-of-replication and proof-of-space-time consensus mechanism, which allows miners to prove that they are storing the data they claim to be stored through a process called “provable data possession”.

The InterPlanetary File System (IPFS) protocol was designed by Juan Benet and his team at Protocol Labs. It is a peer-to-peer protocol that is designed to make the web faster, safer, and more open by allowing for the storage and retrieval of files using a unique cryptographic hash rather than a traditional file path or address.

IPFS works by breaking files into smaller chunks and then creating a hash of each chunk, which is used as the address for that chunk on the network. These chunks are then distributed across the network, with each peer responsible for storing and sharing a certain subset of the chunks. When a user wants to retrieve a file, they simply provide the hash of the file to the network, and the network will return all of the chunks that make up that file.

Proof of Replication

Proof of Replication is a protocol that is used to ensure data durability in decentralized storage systems. The protocol is designed to ensure that data is stored redundantly across multiple nodes and that the data can be easily retrieved if any of the nodes fail.

It was first proposed in a paper by Bram Cohen, the creator of the BitTorrent protocol. The protocol is different from proof-of-stake in that it focuses on ensuring data durability, rather than on determining the next block in a blockchain.

Proof-of-Space-Time Protocol

Proof of Space-Time (PoST) is a protocol that uses computational resources, specifically disk space, to provide proof of data storage.

It is a variation of the proof of storage protocol, and it requires a storage provider to prove that they have stored a certain amount of data for a certain period. This is done by providing a cryptographic proof of space-time, also known as a “challenge”.

Proof of Space-Time protocol was first proposed in a paper by D.J. Bernstein, and their team in 2017, which is focused on using the amount of disk space a node has dedicated to storage as a measure of its “stake” in the network. The more disk space a node has committed to storage, the more likely it is to be selected to store a particular file or piece of data.

What are the advantages of using Filecoin?

• 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.
• Economy - 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.

Are there any disadvantages to Filecoin?

• 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.
• Dapp - By processing transactions using the Filecoin cryptocurrency, it creates a barrier to entry, as someone has to buy another coin and exchange it to use the service.