According to a CoinDesk report, decentralised filesharing protocol Filecoin saw an almost sevenfold increase in data suppliers since the start of the year, with up to 7,000 new developers building applications on top of the protocol.
At a Filecoin event in Singapore, co-lead at Protocol Labs Colin Evran said the network’s storage providers were increasing at a rate of 20% each month, with most activity in North America, Korea and Hong Kong.
According to Protocol Labs founder Juan Benet, up to 20,000 individual users are currently using Filecoin to store over 50mln data objects, which are used in decentralised applications (dApps).
Filecoin activity has been steadily increase over the past three months (1 pebibyte = 1,025 terabytes) – Source: Starboard Ventures
That sounds like some pretty impressive growth numbers, but what is it about Filecoin that’s attracting so many users and developers? Is it all hot air, or will Filecoin’s native FIL cryptocurrency be the next hot token of the crypto markets?
What is Filecoin (FIL)?
Filecoin lets you store stuff without taking up any hard drive space.
What, like Google (NASDAQ:GOOGL) Drive, Amazon (NASDAQ:AMZN) Web Services or Cloudflare? Big deal, I’ve been doing that for years!
Not quite. The key buzzword to pay attention to here is decentralised. Rather than storing your files up in the cloud and letting some evil centralised corporate entity get its greasy mitts on your data, your files are sent out to a peer-to-peer network of nodes who rent their spare storage space out.
They don’t have greasy mitts?
Some probably do, but since your data is stored across multiple nodes, and is encrypted, they (theoretically) can’t access your data.
Theoretically?
Well, nothing is ever 100% in crypto given the number of hacks and exploits conducted every day.
What do these nodes get out of it anyway?
Cold hard ca- FIL tokens. In fact, 55% of FIL’s total supply goes to rewarding these nodes.
The top miner currently has around 1.5mln FIL in its account balance; that’s over US$8mln at today’s market price!
Nice! I have a few gigabytes spare, time to rake in the big bucks…
We’re gonna need a bigger hard drive. The minimum spare requirement is 11 terabytes, but you’ll pretty much need a small data centre’s worth of hard drives to make any substantial profit.
Filecoin’s typical clients are large corporations that don’t want sensitive data on the cloud but lack sufficient in-house storage resources.
Also, Filecoin is a popular storage medium for NFTs, with prominent NFT marketplaces OpenSea and Magic Eden among the client list.
What if I want to store something?
There is no set price for storage, it’s all determined by market dynamics.
Data from Starboard Ventures points to a current figure of 187 FIL per tebibyte, or in human language, a little over US$1,000 per terabyte.
So if you want to store your university papers or fanfiction rough drafts online, AWS might be a better option, but for larger companies seeking new ways to store mass data, it would be world checking out.
Ahh ok, sounds heavy. Wen moon for FIL?
In this economy? Err, sure, let’s have a look.
FIL tokenomics
FIL token, which is used as the payment currency on Filecoin, is currently changing hands at US$5.5 (as of September 26), with a market capitalisation of US$1.65bn, making it the 34th largest cryptocurrency.
FIL often does daily volumes in excess of US$200mln, and is fully diluted at some 291bn tokens.
Year to date, FIL has lost 84% of its market value, a significantly worse performance than the wider crypto market, which itself performed terribly.
Suffice to say, the value of FIL isn’t really correlating to the cited uptick in protocol usage.
All in all, a strong bull run on Ethereum would probably be needed to provide a growth catalyst for Filecoin (FIL) and the wider altcoin space.
But with further downside seemingly being added daily, that could take a while.
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