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Filecoin FIL

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Filecoin (FIL) Network

The Filecoin (FIL) Network Went Live On October 15, 2020

On October 15, 2020 the Filecoin (FIL) Network Went Live. An overview of the project and discussion on FIL’s Performance.

Filecoin, described as a “decentralized storage network designed to store humanity’s most important information,” was developed by San Francisco-based Protocol Labs. The project raised USD 257M in a 2017 ICO. Filecoin’s goal is to “incentivize a global network of computer operators to provide a file sharing and storage service.” According to its founders, that goal is achievable if the network receives enough adoption where Filecoin could become “the fastest and cheapest way to store data on the internet.” The crucial tenant to this vision is Filecoin’s decentralized architecture where files cannot “be censored by governments or other actors.” The Filecoin network is made up of nodes; miners run nodes that offer either file storage or retrieval. In both cases, users pay miners FIL in order to either store a new file or retrieve previously stored files. Miners do not have access to stored content, which is encrypted, with description keys held by the file’s owner. Filecoin’s mainnet was delayed by several years, with initial estimates for the launch pointing to late 2018 or early 2019. The launch was also marked by disagreements within the network’s mining community. For example, a group of Chinese miners threatened to fork the network due to disagreements over mining rewards. These disagreements have persisted post mainnet launch. Last week miners initiated a software upgrade that would allow them to receive 25% of their reward for processing transactions immediately instead of a gradual 180-day release. FIL’s market cap reached a high of just over USD 1B on the day of the mainnet launch. Since then the asset’s market cap has remained within a range of USD 419M to 858M, trading on a number of leading venues such as Bitfinex.

The Takeaway is: Filecoin is one of the few to have emerged from the 2017 ICO cohort with a concrete product that has reasonable real-world application. It is also unique in its specialization. Networks like Ethereum, with its ‘world computer’ mantra, are designed to serve as platforms on which other applications will be built. This gives FIL, similar to Chainlink’s LINK, a more straightforward value proposition with a focus on one concrete use case. On the other hand, Filecoin is not without competition. Competitors include Storj, with a market cap of USD 52M and Sia, USD 116M. Ultimately, while an interesting launch, FIL enters a heavily competitive sub-segment of crypto, with a limited user base and an over USD 500M valuation.