Filecoin Deployment Enhances Network Storage

Published in
8 min readMar 24, 2020


Three drivers: algorithm, hash power, storage

Author: BengGe

1. Filecoin Business Background

With the continuous development of computer technology, more and more data is produced. According to statistics, newly generated data is growing in geometric progression every year. And with the continuous popularization of the Internet of Things technology and 5G technology in the future, the speed of data production will also accelerate. Therefore, data storage and transmission are likely to become bottlenecks restricting the development of technology. The Filecoin technical solution is to solve the problem of data storage and transmission.

In 2017, the Filecoin project raised 186 million in one hour, and eventually raised a total of 257 million, which is one of the largest financings in the history of the blockchain. Filecoin also received investment from several well-known institutions such as Sequoia Capital and Winklevoss Capital.

Filecoin aims to provide two trading markets based on the P2P network — the data storage market and the data retrieval market, to match the needs of different users for data storage and retrieval. In the storage market, users with storage resources can contribute their storage resources and provide storage services to users with storage requirements. Both parties use Filecoin tokens for transaction settlement, In the retrieval market, users with bandwidth resources can provide data retrieval and download services for the Filecoin market. Both parties to the transaction will use Filecoin tokens for transaction settlement.

Filecoin will encourage more people to use their idle machine resources through the token economy, to provide efficient data storage and retrieval services through fully peer-to-peer network architecture, reducing the cost of data storage and use. This is a decentralized architecture, which means that data will not be controlled by a centralized organization, and accordingly, the privacy of data can be better protected.

Filecoin’s token distribution strategy is also worth reviewing. Of all the tokens, 70% will be allocated to Filecoin network mining rewards to maintain the system’s operation and stability; 15% will be allocated to Protocol Labs, which is the development team of Filecoin. This 15% will mainly be used for project research and development, marketing, etc. 10% will be allocated to investors with a lock-up period ranging from 6 months to 3 years, and used to maintain partnership and business development. The last 5% will be allocated to the Filecoin Foundation. The development team has a 6-year lock-up period to ensure long-term network management, public work, community construction, etc.

To sum up, the number of tokens allocated to miner’s accounts is the vast majority, and the tokens for the team and the foundation have a 6-year lock-up period. The distribution of tokens fully considers the incentives for miners and currency users. These allocations will greatly increase user confidence in the system.

2. Filecoin Relationship with IPFX

When it comes to Filecoin, you must consider IPFS (InterPlanetary File System). These two projects are both maintained by Protocol Labs. Many people confuse the two projects, but these are two completely different products.

IPFS is not a blockchain project. It is a protocol that addresses data distribution and location, similar to the current HTTP protocol. The difference is that IPFS data transmission is based on a peer-to-peer P2P network. The more nodes participating in the data transmission, the faster the transmission efficiency, which is similar to the commonly used torrent download protocol. Current data storage in the IPFS network is entirely voluntary. Popular resources may be stored in multiple nodes, and some unassessed data may be cleared from the system cache.

As a blockchain project Filecoin, with the token economy as its core, can make up for the lack of IPFS’s lack of data storage incentives. IPFS-based applications have huge data storage and node number requirements, but if there is no incentive mechanism, no one will be willing to contribute their resources free of charge. Filecoin miners can contribute many nodes and resources to the IPFS network using economic incentives, so we generally think that Filecoin exists as an IPFS incentive layer, in a complementary relationship.

IPFS and Filecoin are independent of each other because the two are not coupled in the technical system, which means that Filecoin can run independently of IPFS, and IPFS can also choose other incentive methods. The main network of IPFS has been online since 2015, and it is running well. The combination of the two can produce wonderful chemical reactions, with the two sides complementing each other to build a world of imaginative data distribution and storage.

3. Filecoin Technical Background

Filecoin’s vision is to provide data storage and retrieval services across the network through a blockchain with an incentive mechanism to reduce the cost of data storage and use. Since it is a blockchain, it also needs a consensus mechanism, that is, it needs to answer “how are the blocks of the Filecoin blockchain generated”.

The well-known Proof-of-Work (POW) consensus mechanism requires miners to rely on the computing power of the machine to continuously perform hash calculations. A miner who can solve the problem in a short time is eligible to generate the next block. That is, the probability that a miner generates a block is theoretically proportional to the computing power of the machine, which has spawned professional miners. However, the only role of this hash calculation is to provide network security without generating any other contributions, which is why POW is criticized for consuming resources.

The “computing power” in Filecoin not only protects network security and also provides a functional guarantee for the system. The “computing power” in Filecoin is called storage computing power. To put it simply, miners who store more data for the network have more storage computing power. In the next round of competition for storage rights, this is advantageous. Miners with large computing power not only protect system stability at the security level but also store data for users and provide data integrity.

For POW, which continuously calculates the hash which takes a long time, once the calculation is successful, the result of the calculation is quickly verifiable by the other miners. But Filecoin’s storage computing power is not the same. Storage computing power refers to how much data the miner has stored on local disk. This is something that other miners cannot verify directly, so Filecoin’s consensus mechanism must confirm at least two things:

1. Whether the miner claims that the stored data is stored on its disk;

2. Whether the miner claims that the stored data has been stored on its disk before it expires.

To confirm these two points, Filecoin proposed two mechanisms: Proof-of-Replication (PoRep) and Proof-of-Spacetime (PoSt).

The core idea of ​​the replication proof is that the miner “A” can submit a PoRep certificate to the entire network to confirm that they have a backup of some data on their storage device, and other miners can verify it quickly. However, a miner may launch a malicious attack. For example, a malicious miner claims to the entire network that he has saved n copies of data, but the miner created multiple nodes or shared data through multiple miners. Only one backup of this data was saved. When a certificate is issued to the entire network, a backup is used to complete all inspections. In this way, users who spend money to buy redundant backups lack data security guarantees, and malicious miners use n storage space to earn n shares. The key lies in the design of the PoRep consensus algorithm.

After research, the PoRep consensus algorithm needed to meet the following requirements:

1. Miners need to perform an encryption operation when storing data. This operation should be non-parallel and take a long time;

2. When data is extracted, the data is decrypted. The operation should take a short time;

3. The process of generating a PoRep certificate from the encrypted data should be fast;

4. The verification process for a PoRep certificate should be fast.

For requirement one, this is to increase the time cost of the miner to store data. Subsequent operations such as generating proofs are performed based on the encrypted data, which makes it impossible for a malicious miner to temporarily generate encrypted data to generate it within a valid time. The second requirement is that when the file needs to be extracted, it will not require large computational resource overhead, otherwise, the cost of the Filecoin system will be very high. For requirements three and four, these are because the miner needs to generate a PoRep certificate within the specified time. If the miner has spent a long time encrypting and saving the stored data as required, the time to generate the certificate should be short. This ensures that the miners can prove their storage within the specified time, as verified by other miners.

Proof of replication PoRep ensures that the miner did store a certain piece of data at a certain time. However, there is no guarantee that the miners will store the data according to user requirements over time, such as discarding the data after generating a PoRep certificate. This is the problem that proof of time and space PoSt solves. In simple terms, PoSt requires storage miners to generate proofs every once in a while, which requires miners to generate a series of PoRep certificates over some time interval.

To summarize, PoRep is a snapshot in time proof that the miner has stored the file as required, and PoSt is proof that the miner stored the file during some time period.

4. Filecoin — How to Mine

The Filecoin test network Lotus has been released. According to the official statement, Lotus is an experimental implementation of Filecoin, which is independent of the go-Filecoin code of the main network. But Lotus also implemented a series of functions such as wallet, miner, PoRep, PoSt, etc. To be clear, Lotus is an experimental product of Filecoin, and go-Filecoin is the complete implementation of the final mainnet.

According to the official deployment document, a minimum hardware configuration machine in the Lotus testnet needs at least: 2 TB of hard disk space, 8-core CPU, and 128 GB of memory. Although such hardware standards may be modified later as the code iterates, it has discouraged the majority of private miners. But a feasible approach is to combine some cheap devices in clusters to provide similar capability. There are few related cases of cluster deployment in the industry, and this approach may work.

5. Filecoin Schedule

Filecoin originally planned to release the mainnet in the first quarter of 2020 and has faced repeated delays. The Filecoin team has always put network security and stability first. The postponement of the mainnet’s release time illustrates this point. On March 10, 2020, the third phase of Filecoin’s test network was launched, but the network stability was poor and it is still in preliminary testing.

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