Filecoin reached the top 10 cryptocurrencies on April 1, surpassing for example Litecoin, after having doubled your quote throughout the previous week. Two days later, the Filecoin Foundation announced the donation of 50,000 of its tokens (known as FIL, worth more than $ 10 million at the time) to the Internet Archive, aimed at improving its library of content.
But what is Filecoin and what makes it different from other cryptocurrencies? In the first place, it was not born with the sole objective of being a cryptocurrency, but with that of becoming a decentralized storage system based on blockchain.
A decentralized cloud storage market
The idea of its creators was that such a decentralized nature would allow protect the integrity of stored data, making it as difficult to censor as it is easy to access, thus marking a difference with respect to storage platforms such as Dropbox.
Its creators are the same as those of another similar protocol, the IPFS (acronym for ‘Interplanetary File System’). Both are complementary, although they can be used independently: where IPFS allows directing and moving content, Filecoin acts as “an incentive layer to preserve data”; a layer in which
“Customers pay to store data at specified levels of redundancy and availability, and miners get paid and rewarded by continuously storing data and cryptographically testing it.”
Since participating in the Filecoin network, both in strict mining and providing hosting, carries rewards for the miner in question, it is understood that so-called ‘Storage miners’ have an incentive to store as much data as possible and reliably.
In addition, apart from the ‘Storage miners’, there is a second category of miners called ‘Retrieval miners’, which users pay to perform services that speed up data transmission (such as caching).
The Filecoin Foundation predicts that soon this open market (the Storage Market) will be ‘hypercompetitive’, which will also convert its prices are more competitive than those of its current centralized rivals.
Filecoin in China: a ‘sensation’ … and a strategic investment
One day after entering the Top10 of cryptocurrencies, FIL became the most traded token on three Chinese cryptocurrency exchanges (Huobi, OKEx and Gate), multiplying by three in the first of them the volume of trade of the Bicoin.
China is crazy for Filecoin, with a 24h increase of more than 30%, reaching a maximum of $236. The 24h trading volume of FIL in Huobi, China’s largest exchange, reached $24.2b, nearly three times the volume of the second ETH $8.8b, Bitcoin was $7.8b. pic.twitter.com/LbKlTkfBqt
– Wu Blockchain (@WuBlockchain) April 1, 2021
According to Decrypt, Chinese officials would be quasi-officially encouraging Filecoin mining because its technological characteristics fit into the agenda of the People’s Republic of China to equip itself with its own infrastructure online storage as a defense mechanism against an eventual attack on Chinese servers.
A) Yes, Large companies of the Asian giant have started to invest equally large sums in Filecoin; Such is the case of the Xinyuan real estate company, which invested almost 100 million dollars in Filecoin mining, or Ninth City (a Nasdaq company), which has spent 12 million since February.
Such is the rise of FIL in China, that WeChat already allows payments with it, and is even used to give money to the bride and groom at weddings:
OMG this is insane, a granny introducing fil payments in a Chinese wedding. In tradition if you got invited to a wedding you got bring a red-pocket with cash. pic.twitter.com/32C1FVVOy2
— Molly (@bigmagicdao) April 1, 2021