Filecoin (FIL) is a peer-to-peer network that uses the storage space of the devices connected to it to store its data. Users that store their data pay fees, also called rent, so that they can use the storage provided by the device owners.
The rent or the Filecoin tokens can then be exchanged for other crypto tokens. The network’s greatest advantage is its decentralized nature. That means that Filecoin is not the gateway to storage, but its community is.
Below we have everything you need to know about Filecoin if you are interested in making an investment.
How to invest in Filecoin (FIL)
Nowadays, it is fairly easy to invest in any of the major cryptocurrencies. There are many crypto exchanges for Filecoin, as well as online and offline wallets you can use for storage.
However, before you invest in any asset, do your research or consult your financial advisor before making a decision that might hurt your finances. Your attitude towards risk, market knowledge, portfolio spread, and fear of losing money should all be considered when entering the crypto world.
What is Filecoin, and how does it work?
Filecoin was developed on top of the InterPlanetary File System (IPFS), a peer-to-peer file storage protocol, and it is very similar in appearance to it. However, even though the IPFS network allows users to share their data and storage space users can’t make profits, and this is where Fielcoin takes the spotlight.
Filecoin users pay miners to store, retrieve, and distribute data, then Filecoin tokens are given to miners as a reward for their efforts. An open market determines how much storage service users pay. The charges will vary depending on whether the user prefers speed or redundancy, and vice versa. Pricing is also affected by other factors such as demand and availability.
The miners maintain Filcoin’s network and are paid for making data or storage space available to other users on the network. If you want to join in on the fun and make a profit, the best part is that you only need a little hard disk space and an internet connection to become a full-time miner. Once you become a miner, your reliability and the storage prices you provide will be your criteria.
The benefits of Filecoin
Filecoin, users have a number of benefits that make it a strong contender in the market. This protocol encourages a worldwide network of computer operators to offer file sharing and storage services for the masses, which encourages users around the world to cooperate.
Filecoin’s decentralized storage approach puts users first as the speed it offers them is unparalleled. Filecoin’s data retrieval speeds are faster than those of industry leaders such as Amazon. And of course, it’s safe to say that the platform’s infrastructure will improve as the market grows. In the future, we can expect Filecoin to become the fastest and most affordable way to store data online.
Filecoin’s decentralized peer-to-peer nature makes it resistant to censorship. There is no single point of security and privacy failure in decentralized networks as there are no gatekeepers, and all data on Filecoin is encrypted to the highest standards.
Filecoin rewards storage providers for providing storage and not for performing unnecessary computations. Filecoin doesn’t use energy-intensive PoW schemes like other blockchains. Instead, it uses proof of file replication to secure its blockchain.
Furthermore, Filecoin does not encourage hoarding graphic cards or application-specific integrated circuits solely for mining, which also makes them more environmentally and industry-friendly.
Can we expect Filecoin’s price to go up in the future?
According to crypto analysts and Filecoin’s technical analysis, Filecoin is likely to see a surge in value in the future. It is important to keep in mind that crypto markets can be volatile and analysts are unable to predict the future price of a FIL coin completely.
If you are planning to invest in this blockchain, do your research thoroughly, and don’t invest more than you can afford.
Cryptocurrency can be volatile so make sure you do your research before purchasing. That being said, Filecoin’s potential upside is enormous. It is one of the most well-known startups in the world and has the potential to solve problems in data storage. So, before you start investing in FIL coins, make sure you know everything about this cryptocurrency and how it works.