Blockchain & Cryptocurrency Glossary

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

  • search-icon Clear Definitions
  • search-icon Practical
  • search-icon Technical
  • search-icon Related Terms

Filecoin

1 min read
Pronunciation
[file-koyn]
Analogy
Filecoin is like Airbnb for hard drives—storage providers rent out disk capacity, and clients pay in FIL tokens to store data securely.
Definition
A decentralized storage network built on IPFS that provides economic incentives for users to rent out spare disk space.
Key Points Intro
Filecoin aligns storage incentives through:
Key Points

Storage markets: Clients bid for storage deals with providers.

Retrieval markets: Incentivizes fast data retrieval.

Proofs: Uses Proof‑of‑Replication and Proof‑of‑Spacetime to verify storage.

FIL token: Native cryptocurrency for payments and collateral.

Example
A researcher stores large datasets on Filecoin; storage miners commit to holding the data and earn FIL when they prove retention over time.
Technical Deep Dive
Providers seal data into sectors, generating a unique replica via Proof‑of‑Replication. They regularly submit Proof‑of‑Spacetime to the blockchain to prove continued storage. Clients and providers negotiate deals via a libp2p-based marketplace protocol. The Filecoin Virtual Machine schedules and verifies proofs.
Security Warning
Providers must post significant collateral—slashed on proof failure—so choose reputable miners to avoid data loss.
Caveat
High collateral requirements can limit participation by small providers.
Related Terms
IPFS

Filecoin - Related Articles

No related articles for this term.