Analysis of Filecoin miners' four income models and income change trends

Filecoin has been a star project since its launch, and has received widespread attention from the market. With the launch of the mainnet, more and more miners have joined the Filecoin network. And income is a question that all miners in the network are very concerned about. Today, Shensuan Mining Pool will share with you in detail the four income models and income change trends of Filecoin miners.

In the Filecoin economic system, the revenue structure of storage miners and retrieval miners is completely different. There are four revenue models for miners in the Filecoin economic system:

Miners obtain new Filecoin coins by investing in storage devices and broadband services, which is what we usually call mining income. According to the Filecoin issuance mechanism, the total amount of FIL is constant at 2 billion, of which 55% (i.e. 1.1 billion FIL) is allocated to miners for mining income and is released linearly in the form of block rewards.

Block packaging income, that is, block packaging transaction fees. Miners must package every transaction in the Filecoin network, and each transaction will generate block packaging fees. That is, Filecoin is a blockchain system, and every transaction in the blockchain system must be packaged, and every transaction also has a fee. The process and principle are essentially the same as the Bitcoin system, and there is no difference.

Miners provide storage space for sale to the network by pledging a portion of tokens. After the storage space is purchased by users, storage miners can obtain transaction fees paid by users. This process belongs to the application stage of distributed storage technology, which can also be said to be exchanging space for income.

Miners obtain transaction tokens by providing data retrieval services, and miners sell their own traffic.

In summary, in the entire Filecoin system, miners have four types of income: new coin issuance income, block packaging income, storage market income, and retrieval market income. Retrieval miners only have one type of income, namely retrieval income, while only storage miners are eligible for the other three types of income.

Some miners expressed doubts. Since there are so many types of income for miners, the income of miners should be considerable, but in fact it is not the case. Why is that?

1) Since the commercialization of Filecoin will take some time, the actual market demand for storage orders and retrieval orders is still relatively small. Therefore, at the current stage, the storage and retrieval income obtained by miners through market storage orders and retrieval orders is almost negligible.

2) In addition, the Filecoin main chain requires strong computing power to ensure the security of the entire network, and strong computing power requires effective storage. Therefore, most miners use technical means to increase effective storage, increase their effective storage share in the entire network, and increase the effective computing power of the entire network to increase the block explosion rate, thereby obtaining more block rewards (i.e. mining income).

3) Block packaging income (i.e. block packaging transaction fees) is also one of the sources of income for miners, but it accounts for a relatively small proportion of the income sources.

In summary, at present and for a long period of time in the future, miners’ income almost all comes from the income from the issuance of new coins, that is, mining income.

Miners' earnings are not static.

In the early stage of the project, the income from the issuance of new coins is the highest. Since the distribution of the income obtained by miners from mining is fixed, there are the fewest nodes participating in mining in the early stage of the project, the price of mining machines is the cheapest, the mining cost is the lowest, and the token release rate is the highest, and the mining income efficiency is the highest. Therefore, for a long period of time in the project, the income from the issuance of new coins will account for the majority of the total miners' income.

However, as the Filecoin network develops, the proportion of storage and retrieval income obtained by miners will gradually increase. Because when the Filecoin network grows, the new coin issuance income of the entire network remains unchanged, so the reward per unit of computing power will inevitably become smaller, while the storage and retrieval income increases with the increase of computing power (that is, the effective data storage capacity of the entire network). Therefore, when the Filecoin network reaches a certain scale, the income of these two parts will be higher than the income of new coin issuance. It can be seen that for Filecoin miners, the sooner they participate in the Filecoin project, the more beneficial it is. And today is always earlier than tomorrow.

Despite this, some miners still have questions: In the later stages of the Filecoin project, will miners not only be able to obtain income from the issuance of new coins, but will they also receive storage market income and retrieval market income at the same time?

Not really! It is just like a miner who gets mining income (new coin issuance income) by investing in mining machines. Because mining machines themselves have a sector packaging period, when the sector expires, if:

1) If the sector is renewed, the renewed sector will continue to encapsulate computing power and obtain mining income through computing power.

2) If the sectors are not renewed, miners cannot obtain mining income through sector packaging computing power. However, if the sectors are not renewed, miners will have idle storage space. At this time, miners can obtain storage market income by providing idle storage space. Taking Didi Taxi as an example, many car owners will drive their own cars to provide taxi services. Passengers pay for taxis, and car owners can grab orders on the Didi platform and get rewards for car rental services. Similarly, in the Filecoin network, everyone shares their idle hard disk storage space to provide network storage services for users. Users pay FIL as fees, and miners provide storage services and collect FIL for rewards.

In the above case, miners who obtain the income of new currency issuance by investing in storage equipment can either continue to renew sectors to mine and obtain mining income, or not renew sectors but obtain storage market income by sharing idle hard disk storage space to provide network storage services. In this mode, it is like "one carrot, one pit", and you can only get the income corresponding to the "carrot pit". It is worth noting that according to the Filecoin economic model, mining output is released linearly, that is, when all 1.1 billion FIL are released, the "carrot pit" of mining income will no longer produce new coins, and there will be no renewal problem after the sector expires. With the expansion of the Filecoin ecosystem and the popularization of commercial use, these miners may change their roles to storage miners or retrieval miners, or both, to earn more FIL income.

As a comprehensive solution service provider focusing on Filecoin mining, Shensuan Mining Pool has a community of interests with Filecoin miners and project parties. Only when the Filecoin network develops better and better, everyone's income will increase. In the future, Shensuan Mining Pool will continue to improve its technology, consolidate its brand, improve service quality, continuously create value for customers, and contribute to the prosperity and development of the Filecoin network.