3 Differences Between Filecoin Mining and Bitcoin Mining
In April 2021, the price of Filecoin suddenly soared to $237, a tenfold increase. Its transaction volume once exceeded that of Bitcoin, and Filecoin mining went viral. In the face of Filecoin’s popularity, the dominance of Bitcoin mining has also encountered an unprecedented threat.
Is Bitcoin mining obsolete? Why do people favor Filecoin mining over Bitcoin mining?
Some say Bitcoin mining has become a game of big capital, and individual investors stand no chance — this is only partially correct. Though Bitcoin mining is indeed a capital-intensive game, it does not mean that individual investors are out of the game. Bitcoin mining isn’t obsolete. The early dividends of Bitcoin mining are overdrawn in advance, thus for individual investors, Bitcoin investment is not a high-risk-high-payoff deal, but rather an option to manage wealth on a regular basis.
On the other hand, “storage mining” led by Filecoin is on the rise. FIL has built a distributed storage protocol based on blockchain. Countless applications, in the fields of secure data storage, permanent storage and data right confirmation, are on their way to being deployed on the Filecoin network.
Filecoin’s mainnet has launched only two years ago, and Filecoin mining is still in a mining dividend period. Compared to Bitcoin mining, investing in Filecoin mining is of higher risk, and most likely comes with a bigger payoff. In addition, Filecoin is not yet dominated by a few big players and thus suffers less manipulation. For individual investors, Filecoin mining is more worthwhile than Bitcoin mining.
Three differences between Filecoin and Bitcoin when it comes to mining.
1. Filecoin miners must pledge coins (FIL) in order to start mining. This is an effort by Filecoin developers to make sure miners are providing stable and secure storage services to the Filecoin network. Whilst traditional bitcoin mining is on as soon as your rigs are up and running, no pledging is involved.
2. As you may have guessed, Filecoins are mined in different ways than Bitcoins. Filecoin mining comes from three sources: 1. Block rewards and transaction fees: the release amount is fixed according to a certain algorithm (this is similar to BTC mining); 2. Storage fees: users pay to miners for storing their files; 3. Retrieval fee: The fee paid by the users to access their files, which is usually paid to the retrieval miners.
The two latter points differentiate Filecoin from Bitcoin, and are also the key points for the implementation of the entire project and practical applications, or the key points for the commercial value of the entire project in the future.
3. Filecoin mining is prone to external environmental factors in many ways, such as the network conditions of mining rigs. If the network speed turns low, it will definitely affect the miner’s competition to produce blocks. In addition, if the voltage of power supplied to the mining rig is unstable, it is highly likely to damage its disk and power supply, and may even cause damage to the motherboard. While traditional Bitcoin mining only requires sufficient power.
Thus typically Filecoin mining undergoes in IDC room. If you want to mine Filecoin online, finding service providers with decent IDC rooms is crucial. LuckyHash has industry-leading IDC data centers established in Seoul, Hong Kong, Kazakhstan and other places.
If we say Bitcoin mining is merely hashpower collision, then hashrate of Filecoin mining is no doubt of more profound meanings — not only data storage, but also in data verification, retrieval, and data processing. Obviously for Filecoin, storing valid data, retrieving and distributing it to users in a timely manner are the keys.
Similar to traditional Bitcoin mining, the core factors affecting Filecoin mining are basically the same: cost-effective hardware + deeply customized mining system + stable operation and maintenance. However, compared to Bitcoin, Filecoin mining has higher requirements in terms of software, operation and maintenance. Optimization for official algorithms is crucial for shortening the time to seal data and increasing the block rate.
In this regard, LuckyHash owns the leadership. Through a strong and proficient technical team, LuckyHash independently develops a customized mining system to ensure stable Filecoin mining output.
The early dividends of Bitcoin mining have passed, and the monopoly of “hash rate oligarchs” is upon Bitcoin mining. Bitcoin mining has a high investment barrier. Whilst Filecoin mining is still in the mining dividend period, and the application scenario of “data storage” guarantees a bright prospect. For individual investors, Filecoin mining is more investment-worthy than Bitcoin mining.
Thanks for reading to the end, I would like to share with you a way to participate in Filecoin mining at 0 costs: as long as you have FIL in your wallet, you can now participate in 0 cost mining on the LuckyHash. Pledge 6 Filecoins, and earn around 1.4 Filecoins as mining revenue, after the mining contract expires, the platform will return all the FIL tokens pledged to the investor. The event concludes on April 26, participate ASAP!
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