What is filecoin? How does it work?

In simple words, Filecoin is a cryptocurrency that allows a person to rent out extra or additional space on their computer. †It is an open-source and decentralized method of data storage and retrieval.

Key Point related to filecoin

  • The filecoin project was launched in the year 2017 and raised $200 million in an initial coin offering (ICO).
  • ICO is funding provided using cryptocurrencies.
  • Filecoin is created by Protocol labs which is a research and development laboratory founded by scientist Juan Benet.
  • The total network storage of Filecoin has reached above 1.1 million TB or 1 EiB (exbibyte).

How filecoin works?

Filecoin is a digital payment system that allows a person to buy unused storage space on another personís computer for data storage.

Advantages of filecoin

  • As filecoin tends to create a larger free storage market for data, it will bring down the price for storage.
  • Filecoin connects a lot of computers together resulting in a huge storage network.
  • Filecoin will be using the available resources instead of using new storage computers.
  • Filecoin ensures that it cannot be hacked like other data storage services like Dropbox.

Although filecoin has many advantages, there are some disadvantages linked to it like speed. As filecoin needs to access multiple servers to put together documents when required, it can take a long time depending on the internet speed.

Is filecoin safe?

As filecoin allows a person to save his data on someone elseís computer there are safety issues with filecoin. However, filecoin ensures the safety of the data as it splits the data in such a way that it cannot be accessed by anyone else. The data can be regrouped by the host if it is hacked but will result in meaningless data.

Future of Filecoin

Cloud service providers like Google and Amazon put in a lot of money which shows there is a great demand in the market. If the trust for decentralized services is generated among the people, they can save a lot of money.