While the fortunes of popular cryptocurrencies have recently dwindled, it appears that 2022 will be the year for some. A typical example is Bitcoin, whose price has continued to move within 43-48 thousand dollars since the beginning of 2022. However, for a cryptocurrency like Lblock, it has been fortunate to witness unprecedented growth this year. Unfortunately, cryptocurrencies like Avalanche(AVAX) have lost more than 30% since the beginning of the year. However, while the struggle continues, Filecoin is looking like a jackpot amidst optimism from investors. This week, the cryptocurrency has attained a huge feat by jumping into the top 40 biggest coins by market cap.
What Is Filecoin?
Filecoin is a decentralized storage provider that allows users to rent out spare storage space on their computers. It is also a cryptocurrency that incentivizes computer operators who provide file sharing and storage services. It is a peer-to-peer digital marketplace built on Interplanetary File System (IPFS) and reliant on blockchain technology. The protocol is open to all, as anyone can join and earn rewards for providing data storage space. Due to its decentralized approach, it doesn’t rely on centralized storage servers to keep data.
According to its founders, they believe Filecoin’s purpose is to store humanity’s most important data and information. They also believe that the protocol will become the cheapest place to store data globally if more users adopt it. The protocol was first introduced in 2014 by Juan Benet, who released the project’s whitepaper. Juan described it as an incentive layer of IPFS, backed by a blockchain that will record commitments made by users. Before launch, the project raised a record-breaking $205 million in an initial coin offering (ICO) in 2017. However, the project did not launch until October 15, 2020, three years after the ICO. The protocol’s native and utility token is FIL, which is also the reward currency of the protocol.
How Does Filecoin Work?
Filecoin tends to create a peer-to-peer network where users who want to store data and those who provide storage meet. The protocol’s operation begins with storage miners, who are individuals with free storage. These storage miners are responsible for storing data on the Filecoin network. The maintenance of the network is in their custody, and they earn from the revenue generated from users. They dedicate computing power to provide the computation that keeps the network operational. Another set of users who manage the network is Retrieval miners. Retrieval Miners are individuals that smoothen the data retrieval process between clients and storage miners.
Like storage miners who get incentives for making storage space available to users, they also receive rewards in FIL tokens. Also, Filecoin uses an end-to-end encryption system that ensures storage miners don’t have access to decryption keys. The decentralized nature of the network ensures that it can store multiple files in different locations. Filecoin uses two different proof consensus mechanisms to verify that miners are storing the data that they hold. The Proof-of-Replication shows that a miner has truly stored the number of copies of data it claims to hold. Also, the Proof-of-Spacetime shows that a miner has stored the data over an agreed period.
Why Should I Use Filecoin?
The data storage and access approach have made Filecoin a household name in the Blockchain space. However, below are the advantages of using Filecoin;
- Cost-Effective: One of the uniques advantages of Filecoin is its creation of a cheap storage alternative for users. The network’s market is big enough for data storage and very competitive to lower prices.
- Economical: The model employed by Filecoin is economical for both the network and its storage miners. It does not require the creation of new storage computers, as one can use existing ones.
- Safety: Unlike other cloud storage services, Filecoin is very safe and secure. The decentralized nature, plus the end-to-end encryption of its storage, makes it difficult to hack. At writing, there have been no records of attacks on the protocol, unlike Dropbox and iCloud.
- Multiple Options For Users: Filecoin allows customers who want to purchase storage to navigate the best deals on the fly from different storage providers. This opens users to various bespoke options suited to their satisfaction.
Limitations Of Filecoin
While the advantages of Filecoin are abundant, the network’s speed is not optimum. The transaction turn-around-time of the network is currently slow, as the use of multiple servers for storage slows it down. If one decides to retrieve stored information from the network, servers will have to pull together to meet the demand. Internet speeds and availability are factors that could slow down a server. Another network limitation is that one has to use FIL to operate around it. This means that, while the network’s service is open to all, one must buy possess their native token to participate.
What is The FIL Token?
FIL is the native token of the network and allows consumers access to the services of Filecoin. Its uses cut across paying for storage, retrieval, and other transactions on the network. To earn the token, storage miners will store clients’ data and provide proof of this in real-time. Alternatively, retrieval miners will have to earn the token by bidding and mining fees for a particular file. However, their earnings are not stable, as the current market value will determine it. According to its developers, one can store the token on three wallets; Lotus, Glif, and Filfox. According to Protocol Labs, the token has a circulating supply of 184,953,795 FIL and a maximum supply of 2 billion coins. The top exchanges to buy and trade FIL are Kraken, Binance, CoinTiger, Gemini, and OKEx.
How To Buy FIL Token On Binance
Since October 2020, FIL has been available for purchase on many exchanges, including Binance and Coinbase. However, listed below are the steps to buying the token on Binance;
Step 1 – Sign Up
Signing up on Binance is the first for new users. This process is usually seamless and complete after supplying a few KYC details. You will also need to verify the information you provided. It is worth noting that only verified accounts will have access to the Binance trading platform. However, existing users will only need to log in to their accounts.
Step 2 – Deposit and Swap Fiat
After creating an account and logging in, you will need to swap either fiat or crypto using the Binance exchange view. Unlike other cryptocurrencies, you cannot use a debit/credit card to purchase FIL directly. You will need to pair it with BNB, BTC, or BUSD. You will have to purchase another cryptocurrency to make the process swift and smooth.
Step 3 – Purchase Your $FIL Token
Once you have your crypto, head to the exchange section of Binance and select the FIL pair you want to trade. For easy access, you can choose FIL/BUSD. You can change your pairing by clicking the current market pair in the top left part of your screen. After that, you will create a market order on the right side of the exchange view and spot. Ensure to choose the market as your order type and confirm the amount of BUSD you want to trade. At the click of buy, your order is complete.
Should I Invest In $FIL?
The good news for FIL and its community is that the token has now made its way into the top. It is now in the top 40 most valuable cryptocurrencies by market cap. According to CoinMarketCap, the token is now in the 36th position as the most sought-after token by crypto users. This surge is not far from the fact that its ecosystem has continued to prove to be very valuable. Major exchanges have also started to list the token for trading. Alternatively, Filecoin’s ability to help enterprises and individuals store data cheaply makes the network valuable. The token has seen its 24hour trading volume hit almost $1 billion amidst a record-breaking market cap of $4,587,692,453.53.
These figures will not change anytime soon, as demands for cloud storage continue to be high. The token is still far from its All-Time High (ATH) of $237 attained a year ago and currently trades for $24.16. However, WalletInvestor believes the token still has a long way to go and cannot near $100 in 2022. DigitalCoin echoes the thought of WalletInvestor and believes that FIL could end up on $30 by December 2022. PricePrediction.net remains the most optimistic on FIL, as they believe investors should think of it as a long-term investment. They believe with a general year-on-year uptrend and a filecoin price prediction for 2030 of $481.66. However, Filecoin will continue to be sought-after. Whether that will push its token price up, only time will tell.
Conclusion
Filecoin is a decentralized storage provider that allows users to rent out spare storage space on their computers. It is a little like Dropbox but powered by blockchains. Users who want to store some data on the Filecoin network must pay a miner. FIL is the native token of the network and allows consumers access to the services of Filecoin. It is available for purchase on Coinbase, Kraken, Binance, and many top exchanges. According to PricePreidiction.net, FIL is a token for the future, and investors must be willing to hold on to the token for rewards.
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