Filecoin (FIL) is a utility token issued by a decentralized storage network founded by Juan Benet. The platform employs open-source technology that aims to enhance the work of the internet. The token resides on its native blockchain which is based on both proof-of-replication and proof-of-spacetime protocols.
The company standing behind the project is Protocol Labs from California, US. The team announced the start of work on the Filecoin project back in 2014 with the goal to create a decentralized service for the distributed storage of information. Working on the project, developers have created a new communication protocol IPFS (InterPlanetary File System), which was supposed to replace the outdated HTTP. Filecoin is one of the projects that made a big splash even before the launch of a massive fundraising campaign. Thus, it’s not surprising that the project became one of the biggest ICOs of 2017.
The team of developers plans to compete with such giants as Google, Amazon, or Dropbox in the field of data storage. The scheme involves the creation of a distributed network for storing a wide variety of information of any size, be it a single file or huge databases.
The problem is that internet users from remote corners of the world can experience problems with access to cloud storage services, the speed, and ping of connections. It occurs because the vast majority of servers providing cloud storage services are located in Europe and the United States. They are also concentrated in the hands of the largest market players, and this deteriorates the situation.
Filecoin platform and technologies
To solve this problem, Protocol Labs offers to place information on multiple computers of its network participants instead of keeping it in one place. Using the IPFS protocol, the system splits data, places it on a large number of PCs, and if necessary searches for the nearest network nodes to access them, thus ensuring the optimal connection speed. Any member of the Filecoin project with free space on the hard disk can rent it out for storing information while receiving a reward in the form of FIL tokens.
The main difference between the architecture of building a network of the Filecoin cryptocurrency from most analogs is the presence of two types of nodes: Storage Nodes and Retrieval Nodes. Storage Nodes physically represent the space allocated by the network member for storing information on their hard disks. The preference is given to the nodes of the average size of the available volume, because large nodes lead to centralization, and too small nodes decrease the quality of the network. These nodes are paid for storing information on them. As for Retrieval Nodes, this type of node is unique to the Filecoin network. The main requirement for them is a high speed of Internet connection, low ping, and close location to nodes of the first type where information is stored.
The task of the retrieval nodes is to find and transmit information to users according to the requests submitted. The one who copes with it first gets paid. Therefore, those search nodes that are located in places with a large concentration of working storage nodes are competitive.
The owners of the nodes receive a reward for ensuring the network's operability, the fair distribution of which is ensured by the Proof-of-Replication consensus mechanism. All storage node owners receive a reward proportional to the amount of memory allocated. However, the "miners" must prove that they created a certain number of copies of different files. This approach increases the reliability of information storage since it is duplicated many times by different nodes.
After numerous delays, the Filecoin platform was launched on October 15, 2020. At the same time, the FIL tokens, subject to a vesting schedule, began their distribution.
Filecoin ICO and FIL token
In August 2017, an ICO was conducted to raise funds for the further development of the project. The interest of investors was so big that the required 252 million USD was raised within half an hour despite the fact that the ICO was held on the CoinList site in accordance with the strict SEC rules. They implied the participation of only US residents who passed full verification on the platform. In particular, this meant confirmed data on the paying capacity of the participant. For individuals, the income level had to exceed 200,000 USD per year, and for companies, that number was more than one million. It was estimated that 3,500 entities have received FIL tokens.
The most notable investors included Winklevoss Capital, Digital Currency Group, Andreessen Horowitz, Naval Ravikant, Y Combinator, and others. The investors did not receive FIL tokens in return. Instead, the project sold SAFTs (Simple Agreements for Future Tokens). The Filecoin supply is capped at 2 billion coins. New Filecoin tokens can be released via block rewards only.
According to the project roadmap, the distribution of tokens is the following: 70% of the total amount is reserved for paying rewards to miners for network maintenance; 15% is allocated to the project developers; 10% is used to pay off to investors who contributed to the project at the ICO stage; 5% remains in a special fund to finance future developments.
After the launch of the mainnet, several largest cryptocurrency exchanges confirmed the support of the FIL coin. The most prominent among them are Kraken, Huobi, and Gemini.
The team includes 12 core developers with Juan Benet at the head. Juan Benet, the CEO of the Protocol Labs, is an American computer scientist, graduate of Stanford University, who received recognition for the creation of the Interplanetary File System, a decentralized P2P web protocol. Previously, he worked as CTO of Loki Studios that developed a multiplayer mobile game Geomon and was eventually purchased by Yahoo! in 2013.