The Web3 concept is associated with a range of decentralized solutions. Filecoin offers decentralized secure storage of information in a peer-to-peer network. But what are the prospects for the project in light of the recent update?
The development of blockchain technologies is impossible without expansion into new areas of activity and knowledge.. Conventional cryptocurrencies are only the very surface of what can be done using blockchain and decentralization. Another obvious path is decentralized custodial services, which is what Filecoin specializes in. The network supports storing a wide variety of data formats, including, of course, audio and video.
The product has already proven itself: decentralized storage from Filecoin is used, among others, by NFT.Storage and Internet Archive. In October, the Internet Archive reported that a petabyte (1,024 terabytes) of their archives was stored on the Filecoin network.
What is Filecoin
Filecoin offers a decentralized ecosystem with built-in economic incentives for participants that ensures secure data storage. Users pay storage providers to store and maintain information integrity. Thus, those who want to store their data using the blockchain and those who are willing to provide their storage resources can become participants in the Filecoin network.
How it works
There are two types of data storage and access service providers: storage providers and retrieval providers .
Storage providers are responsible for storing clients' files online and providing cryptographic evidence to verify the integrity of that data.
Receipt providers are responsible for providing users with quick access to data. In most cases, storage providers also provide retrieval access to their users, but the roles may be separate.
Transactions through which users obtain storage services are called deals.. Terms are negotiated off-chain and once the user and provider(s) reach an agreement, they are recorded and validated on the blockchain. The transaction includes information about price, storage volume, term and collateral.
The Filecoin blockchain supports smart contracts, moreover, Filecoin Virtual Machine (FVM) allows smart contracts to be ported to the Ethereum Virtual Machine (EVM).
Transactions are made in a token specialized for the Filecoin network – FIL.
When a user wants to store data on the Filecoin network, they pay FIL to the storage providers, and they offer their storage space. Payment is made in advance for a certain amount of time during which the data will remain online. Storage providers are then awarded FIL for providing storage space and performing other tasks on the network.
In addition, FIL is used to obtain data, pay rewards to validators, block rewards and commissions.. FIL holders also have the right to vote on proposals regarding the future of the Filecoin network.
FIL is freely traded on most major exchanges and can be purchased with cryptocurrency or fiat. The list of exchanges can be viewed, for example, here. But how interesting is the project in light of recent updates?
On December 12, the Watermelon network was upgraded, which increased the maximum term of the storage contract to 3.5 years (previously the period was one and a half years). Improvements to Filecoin Virtual Machine (FVM) have also been introduced, reducing fees for a number of transactions. The upgrade also introduced synthetic proof of replication (PoRep), allowing storage providers to prove data replication without the need for transfer.
In general, the upgrade at least indicates constant support for the project and its development. What does a coin look like from a technical analysis point of view?
The coin is currently trading around $5.14. Since the second half of October, there has clearly been a positive trend: FIL increased from $3.2, and the maximum December value was $6.19. Now it is the nearest resistance. Support level – $4.42. How the value of the asset has changed since October can be seen in the graph below:
Filecoin is conceptually designed for decentralized data storage. The latest upgrade to Watermelon had a positive impact on the FIL asset rate, although the cost of the token has already adjusted. The coin is characterized by extremely high volatility, and the prospects are related to the success of upcoming updates and overcoming the nearest support and resistance levels.
This material and the information contained herein do not constitute individual or other investment advice.. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.