Filecoin (FIL) – All you need to know

What is Filecoin?

Filecoin is like a decentralised version of Dropbox, somewhere for customers to store files without having to use cloud services owned by big corporations. Anyone with spare disk space can join Filecoin and rent it out to a customer looking for somewhere to store their data.

The FIL cryptocurrency powers Filecoin, where it acts as an incentive to good behaviour and is the currency for all transactions between customer and supplier. All those transactions are stored on a publicly available blockchain.

By bringing individuals together directly the Filecoin platform is able to cut out the middleman. This is targeted at companies like Amazon or Microsoft who traditionally dominate data storage, act as censor, and charge high prices. Filecoin was formed in 2017 and, along with other platforms like Storj and Siacoin, has led the way in using blockchain technology for decentralised storage.

How does Filecoin work?

Filecoin works by creating a marketplace that brings together suppliers of disk space with customers demanding it. Whenever a customer wants to store some of his data, the suppliers compete to offer him the lowest price. The successful supplier is rewarded after they’ve proven the data is stored securely, with all proof stored on the blockchain and so visible to everyone.

Finally, there is a third group of people who use their computer power to retrieve files whenever the customer wants to access her data. Those retrievers earn a transaction fee as well, and every transaction is done in FIL with a record of all payments also stored on the blockchain. As the suppliers only receive their fee once the data is secure, FIL is the incentive for everyone to act in good faith.

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