What is Filecoin? What is The Purpose of Filecoin?

What is Filecoin? What makes the project's operating mechanism unique? Learn more about the tokenomics of FIL token, the development roadmap, and the Filecoin project team here!

What Is Filecoin? What Is The Purpose Of Filecoin?_65d5ce45651bc.webp

What is the Filecoin (FIL) Project?

Filecoin is a decentralized storage system built to secure the important information of users. Particularly, Filecoin employs incentives to ensure the reliability of file storage over time.

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https://filecoin.io

In the Filecoin database, miners are rewarded for providing storage capacity, not through performing costly computations. To enhance Blockchain security, Filecoin utilizes Proof of File Replication and Proof of Storage instead of relying on Proof of Work, reducing energy consumption compared to other Blockchains.

The system encourages miners to use hard drives for file storage and does not support the use of graphics cards or specialized applications solely for mining purposes.

How Does Filecoin Operate?

In Filecoin, users pay fees to store their files on storage mining machines. These machines are responsible for file storage and proving that they have maintained files accurately over time. Anyone wanting to store their files or earn money by storing files for other users can participate in this process. Storage capacity is available, and its price is not controlled by any company, creating open markets for storing and accessing files that anyone can join.

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Filecoin includes a Blockchain and the FIL token. Miners are rewarded with FIL tokens for storing files. The Filecoin Blockchain records transactions related to sending and receiving FIL, while also storing evidence from storage mining machines that they have maintained files accurately.

Highlights of Filecoin

Data Storage

Data storage allows users to leverage the power of a decentralized network and an open market provided by thousands of storage service providers or different miners.

Coin Mining

Miners on the Filecoin blockchain play a crucial role in storage, content provision, and creating new blocks. FIL mining operations differ from the mining process of Bitcoin or Ethereum, where the primary goal is to provide computing power. In the case of Filecoin, miners contribute storage capacity for use in transactions with customers who want to store data and, in turn, receive rewards.

Related: What Is Ethereum (ETH)? An Overview of the ETH Project

What is FIL Token?

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Basic Information about FIL Token

– Token Name: Filecoin.

– Ticker: FIL.

– Blockchain: Filecoin.

– Token Standard: Updating…

– Contract: Updating…

– Token Type: Utility, Governance.

– Total Supply: 1,970,978,207 FIL.

– Circulating Supply: 470,659,584 FIL

Token Use Case

Filecoin is a token used for:

– Incentivizing storage: Encouraging storage providers to contribute storage capacity to the network.

– Use within the Filecoin network: The Filecoin token is used to facilitate transactions within the network, including storage and data access. Users can pay for storage and access services using the Filecoin token, while miners can earn tokens by providing these services to the network.

– Governance: Allowing token holders to participate in the voting process within the network.

Token Allocation

– Foundation: 5%

– Team and Contributors: 4.5%

– Protocol Labs: 10.5%

– Investors: 10%

– Miners: 70%