Paul’s comment, the best comment posted here seems to be missing now for some reason.
I don’t disagree with most of your points, they are actually quite insightful — but the success of the coin isn’t based on these or any other price projections.
If Filecoin is successful, this whole article is irrelevant. If it’s not successful, and it might only have a 10–20% chance of becoming super dominate in the space; then it simply doesn’t. That’s how life works.
Everyone investing in this project knows they are…
- Promised nothing upon purchase
- Won’t see anything until the network launches
- The network may never launch.
Main competition will be Siacoin…
Sia uses Proof of Work (PoW) whereas Filecoin uses Proof of Storage (PoS), something Protocol labs invented. Because Sia uses PoW, there are manufacturers starting to produce application specific integrated circuit (ASIC) hardware to make for more efficient/profitable mining.
This choice includes a couple side effects and negative consequences in a decentralized/distributed network model.
PoW models incentivize miners to amass hashing power — which is basically performing meaningless computations and consuming large amount of energy unnecessarily.
PoS by contrast incentivizes miners to invest in additional storage (where the investment belongs in the context of a distributed storage network) rather than in ASIC’s, which really don’t create any additional value for the network.
PoS make far more sense in this context than PoW.
ASIC’s equipment is very expensive and this price’s average people out of the market. However, storage is far cheaper — thus, it’s easier and cheaper for new participants to join the PoS network model.
Since the cost of storage is cheaper, it’s logical to think the demand will be higher. Sia forces users to buy expensive, exclusive and, sophisticated hardware as the backbone of the network. Filecoin, is going to allow users with only a personal computer to participate as a miner in the network — much of which can be done with already available/unused disk space. This makes entrance into the marketplace free in a lot cases.
It’s pretty difficult to state how important distributed storage is to a distributed web model.