Everything is moving to the cloud. What has been an ongoing trend already was accelerated by the pandemic forcing companies to enable their employees to work from home
A staggering 83% of companies’ workloads are stored on the cloud, and the average employee uses 36 cloud-based services in their daily routine. This increase comes at a staggering cost as businesses struggle to get hold of their spending. But it’s not only the costs associated with having a few big cloud storage providers dictating the markets. Another problem is the permanent risk of hacks.
With so much sensitive data stored in clouds, they’ve become an attractive target for hackers, who had a heyday during the pandemic.
If you have ever been the victim of a data leak, you are probably interested in finding better ways to store your data. Not only since the advent of blockchain, but decentralization has also always been a powerful tool to ensure resilience against attacks (just ask the Aztecs).
Filecoin builds on that to provide a peer-to-peer decentralized storage network, enabling anyone to store their data securely.
What Filecoin does
Filecoin aims to incentivize a global network of computers to start sharing unused resources to provide storage and data sharing services. With Filecoin, anyone can get started renting out their disk space. The network is held up by miners, ensuring that no central authority can determine the fate of the network.
The founder, Juan Benet, believes that Filecoin could become the cheapest way to store data once the protocol is widely adopted. Juan Benet is well-versed in the idea of decentralized sharing. After founding and successfully selling a game developer studio, he launched Protocol Labs.
Protocol Labs is behind IFPS and libp2.
IFPS — the interplanetary file system- ensures file storage and sharing in distributed networks. It uses similar processes to known p2p file-sharing networks such as BitTorrent. It’s free to use for anyone.
However, with it being free to use, participants providing storage space aren’t economically incentivized to do so. That’s where filecoin comes in. Built on top of IFPS, it adds an incentivization structure for people joining the network and earning in FIL.
How it works
Storing Data
When users want to store their data, they will pick the miner that offers the cost, redundancy, and speed that suits them best. Once they’ve reached a final agreement, the miner will store their data and add the transaction to the blockchain.
If you’re worried about the security in such a setup, note that all files on Filecoin are never stored as one. They are split into pieces and spread across devices to ensure that, even if the hosting miner tried hacking into your file, they’d just see a random string of data.
Proof of Replication
Using Proof of Replication, the network verifies if storage miners have actually stored the number of copies of data they claim to hold.
Proof of Spacetime
With Proof of Spacetime, the Filecoin ensures that miners have stored all data over the agreed period.
Retrieving Data
Storing data securely is excellent, but at times you might want to access whatever it is you stored. That’s where the other kind of minders come into play: Retrieval miners.
As their name suggests, they are responsible for retrieving data for users. They earn Filecoin by bidding and mining fees for particular files they retrieved
Why use Filecoin?
If you’re reading this, you might already have a bit of a tendency to like decentralized services. But apart from that, filecoin offers the following advantages:
- Cost: by creating a free large market, prices for storage could drastically be reduced
- Scale: there are a lot of unused computing resources globally. Just getting a small percentage of them to provide storage could create an extensive network. On top of that, Filecoin relies entirely on existing infrastructure, making it easy to scale.
- Safety: unlike centralized storage providers, Filecoin has no single point of failure or attack. Additionally, all your data is stored in pieces, so not even host nodes can access your files.
One potential drawback could be speed, as retrieving data will depend on accessing multiple servers and their respective internet connection.
While Filecoin does have some competitors, namely Storj and Siacoin, Filecoin has been the most-anticipated decentralized data-sharing network, receiving more than $200 million through an ICO in 2017. Notable investors include Sequoia Capital, Andreessen Horowitz, and Union Square Ventures.
Once the world wakes up to the dangers of centralized services, and if governments become more serious about enforcing harsher regulation on existing providers, decentralized networks for file sharing like Filecoin are well-positioned to capture demand.
