Babbitt Exclusive | Miners on strike? Official dumping? FIL plummets! The magical 7 days after Filecoin went online

If you follow Filecoin, you will definitely sigh: It is so magical. Those who love it love it to death, and those who hate it hate it to death.

In the past week, there have been a lot of rumors, such as Protocol Labs dumping 1.5 million FIL and miners going on strike against the Filecoin economic model. It seems that overnight, Protocol Labs has gone from being "highly anticipated" to "reviled" in the Chinese community.

The Chinese community lacks news about overseas protocol labs, and domestic project parties seem to be tight-lipped. A series of reversals, or farces, have been staged around Filecoin.

A week has passed. What happened to Filecoin? Is it a good project? Will Chinese miners continue to play with it? Today, let’s take a look at what is wrong with Filecoin and why FIL plummeted.

FIL, urgently needed! Urgently needed! Urgently needed!

As of press time, data from Filecoin browser filscout.io shows that the total computing power of the entire network is 609.89PiB. On October 15, when the mainnet was launched, this data was 566.9PIB. From this perspective, miners did not go on strike and stop working. On the contrary, the computing power is still growing, but the speed is indeed a bit slow, increasing by about 6.6% in 7 days.

Currently, the node with the address F02770 provides 41.35PiB of effective computing power, ranking first in the entire network. Since the 18th, the computing power growth of this node has slowed down, and on the 20th, there was zero growth, but it did not decrease. The situation of the top ten nodes is basically similar.

In the logic of Filecoin mining, the sooner the sector packaging is completed, the sooner the effective computing power is obtained, and the more mining benefits can be obtained. For the same 100T computing power, the difference in benefits between packaging in 50 days and packaging in 100 days is huge. Simply put, only after packaging is completed, the mining machine can be considered to be 100% fully operational for mining. From the perspective of profit, everyone is eager to improve their effective computing power as soon as the main network is launched.

Today, there is only one reason why the effective computing power of the entire network is growing slowly: the mining pool does not have enough FIL. Without FIL, it is impossible to complete the sector packaging, and there is no way to increase the effective computing power. In other words, the mining machines cannot play their full potential, and the remaining machines can only shut down and sleep. Some people speculate that the Filecoin computing power that has not yet been awakened is about 4 times that of today.

How big is the gap in the market for FIL? Wendy, the head of marketing and branding at Diancun Technology, told Babbitt that it is impossible to count the total computing power of the mining machines sold in the market, but it is possible to calculate how much FIL is needed for each additional 1PiB of effective computing power in the market.

Today, a 32G sector requires 0.22 FIL (constantly changing), about 7.04 FIL per T, and 7208 FIL per P. Judging from the test network, it is no problem for the entire network to increase the effective computing power by 10PiB per day, which requires 72,000 FIL per day. In fact, the Spacetime Cloud alone may be able to increase the computing power by 10PiB per day.

How much FIL is released from mining every day? About 20,000. The FIL gap is terrible, and each mining pool is like a hungry baby elephant.

▲FIL price on Huobi

Is Filecoin real or fake? Who is behind this? Why did it plummet?

If you observe the price of Filecoin since its launch, it is quite shocking. Take Huobi as an example. At 23:00 on the evening of the 15th, the FIL spot trading pair was launched and the price skyrocketed to $220, and then fell sharply. Today, the price of FIL is $31, down 85% from its high.

During this process, there were reports that Protocol Labs dumped the market, and 1.5 million FIL was recharged into exchanges such as Huobi and Gate. Soon, Protocol Labs became the target of public criticism.

Where do the coins come from? According to the previous economic white paper plan, before the mainnet is launched, FIL spot has only three outlets, namely the output of the early space race, early private and public investment, the official allocation of the protocol laboratory, and the output of mining on the same day, a total of 4 paths of linear unlocking.

According to rough calculations, on the first day of the mainnet launch, the amount of FIL unlocked was about 500,000, of which the FIL unlocked from miners, as mentioned above, was about 20,000.

However, it seems that a lot of coins have suddenly flooded into the market!

The problem is that during the testnet period, miners had already started to participate in mining. At that time, the protocol labs airdropped a batch of tokens for miners to use as collateral for mining, but later, these tokens turned out to be the mainnet coins! This obviously exceeded everyone’s expectations.

If you remember, on the day the mainnet was launched, GitHub's account became popular because every account that met the requirements could get a test coin. Anyone holding the account could deposit it into the exchange and sell it, with a chance to earn $200 for free (currently it is no longer possible to get the coin).

How many test coins are there? There are different opinions, ranging from millions to tens of millions, but who are the people who hold the largest amount of coins? They are miners, especially the top miners who participated in the mining during the test network stage. Some practitioners told Babbitt that on the day when FIL was listed on the exchange, some miners chose to cash out at a high point. This may also be the reason for the plunge of FIL.

On the 20th, Juan sent more than 40 tweets in a row, one of which mentioned: There are some bad groups who try to create trouble for their own benefit. There are also some groups who try to use or abuse the mechanism. But overall, these people are only a minority.

"Many people hope to get rich quickly through Filecoin, rather than contributing value to the network," Juan said. Regarding the rumors of cashing out, Juan's statement was also quite official, that is, to maintain the stability of the currency price in the early stage.

Therefore, the magic of Filecoin is that there are indeed miners without coins, such as small miners who did not participate in the space race in the early stage, and there must be large miners who cashed out a large number of tokens. And Protocol Labs did send coins to exchanges.

Regarding the sale of coins by Protocol Labs, some miners said that this was a two-birds-with-one-stone move, maintaining the stability of the coin price while also cashing out. Regarding the "strike" by Chinese miners, some practitioners lamented: " China has sold too many mining machines and computing power, and there is still an overselling phenomenon. Why do large mining pools want to 'strike'? Because if they don't divert the conflict, they will be defended."

In fact, Filecoin mining machine manufacturers, mining pools and other computing power providers have obtained a lot of funds from the market in recent years, but how much they have actually invested in the equipment is unknown, which many people know well. After the launch of the Filecoin mainnet, the inability to increase computing power has become the biggest challenge for early practitioners, which means that they cannot explain to consumers. In addition, there are unqualified investors in Filecoin that cannot be counted, which is likely to cause collective incidents such as rights protection.

In response to this series of dramatic reversals and community splits, a miner pointed out incisively: everything is the result of a game of interests.

▲Mining machines in a domestic Filecoin mine

Looking for FIL all over the world, Filecoin mining continues to move forward

China is undoubtedly a gathering place for Filecoin miners. Today, every practitioner dedicated to Filecoin is looking for FIL. But different project parties are very different because of their different services. It can be said that the eight immortals cross the sea, each showing their magical powers.

For example, some project owners announced that they would bear the cost of pledging FIL, some required the purchasers of mining machines or computing power to bear the cost themselves, and some project owners withheld daily mining output and used it as collateral to increase effective computing power. However, more project owners actually chose not to increase the pledge, that is, not to increase effective computing power.

Jia Xudong, co-founder of Keypool, said that there is a huge demand for staked coins. Regarding the staking demand after the mainnet goes online on the 15th, their idea is for Keypool to connect and find coins. The interest costs involved will be borne by everyone, so as to increase the effective computing power as soon as possible.

According to Jia Xudong, Filecoin mining will definitely continue, and their biggest wish now is to quickly get the computing power up and let users get benefits. As the project owner, Keypool has more resources to find coins and the cost is lower. At present, the source of FIL has been settled, and we are just waiting for the announcement of relevant policies, such as interest distribution.

"We have some retail users, not a large number, but they do a lot of things," Jia Xudong said self-deprecatingly.

In interviews with several practitioners, it was found that this form of cost sharing is quite common. This form also involves whether miners can get the coins now.

From public information, we can see that Whale Exchange's Filecoin cloud computing product uses a pre-mortgage that is paid in advance by the project party. Users' daily output is used to repay the above pre-mortgage in advance without interest, but they began to release the output of the space race linearly.

Huobi said that according to the current economic model, the balance between output and pre-staking will be reached in about 90-100 days. Therefore, they chose to use the output for pre-staking and distribute the income after reaching the balance point.

From the interviews with Filecoin participants, it can be felt that the most urgent thing now is to find FIL and start mining. "First, we need to ensure the increase in effective computing power, but the pressure of buying and borrowing coins is very high, which requires effort and strategy." said the miner.

In response to the problem of FIL shortage, Protocol Labs has also made concessions. For example, the FIP-4 proposal that miners have been looking forward to is about to be implemented, and the upgrade will be completed at the block height of 170,000 (around 7:00 am Beijing time on the 23rd).

Qimei from the Arweave volunteer community said that 25% will be released first, and the remaining 75% will still be released at 1/180. This can alleviate the problem of miners lacking FIL.

In addition, Protocol Labs is also trying to communicate with partners to provide small loans to miners, and only allow miners to use the loans for pledge, and there will be a daily limit on the amount of loans. However, the specific interest and amount data have not been disclosed.

Recently, Huobi launched HFIL based on Ethereum, and Huobi also has the function of locking and mining FIL. Wendy from Diancun Technology introduced that they are also connecting with Huobi and trying to quickly increase their computing power by borrowing coins.

Xie Jinbin (Xie Dapao), the initiator of the IPFS community, told Babbitt that users can go to the DeFi platform to borrow HFIL, then go to the Huobi exchange to exchange for real FIL, and then use the currency as a pre-collateral, and everyone is happy.

Wu Hongbing, founder of Manulife Blockchain and participant of Filecoin ecosystem, said that there is still some uncertainty in FIL mining, including the possibility that the official may modify the rules, such as accelerating release and reducing pledges. "It is really hard to talk about long-term planning. Our current plan is to continue to find qualified investors to participate in FIL while resolving pledges and being able to pay investors. We can only take it one step at a time."

With 100,000 RMB, how long does it take to get your money back by mining Filecoin?

It is necessary to mention that today, for Filecoin mining, the final risk bearers should still be the miners who have purchased mining machines and computing power. As the link with the weakest ability to obtain information, they may also be the most difficult group in the ecosystem.

"They still have a certain ability to resist risks, and their overall risk appetite is relatively high. The idea they have now is that as long as they can still mine and have output every day, it's fine. As for the economic model, the small miners who buy mining machines don't understand it at all." said a Filecoin mining pool practitioner.

He also calculated the possible mining income for us. Assuming an investment of 100,000 yuan, how long will it take to get your money back?

First, look at how much effective computing power you can buy with 100,000, and then how long it will take to seal the effective computing power. The faster the sealing, the higher the profit. If you simply calculate the payback period after the sealing is full, it is relatively easy. Assuming that you can buy 100T, according to the current mortgage amount, you need about 605 FIL, 100T 25 FIL per day (decreases as the total network computing power increases), according to the static computing power and the price of 30 dollars, the payback period does not exceed 2 months.

But this is a simple calculation. In fact, it will take another 3 to 6 months for the mining pool to fully utilize its computing power. Add to that the 180-day linear release and the token commission collected in the form of software service fees. The overall payback period should be more than 10 months. This is calculated based on a cost of 1,000 yuan per T. If the purchase cost is high, it means that the payback period will be longer.

"In fact, it is very troublesome to calculate the payback period. I only estimate it and have never calculated it accurately," he said.

Filecoin, what is it good for?

Many people are confused about what Filecoin is used for, so I tried to find an entrance from the official website and tried to save a picture through IPFS, an application for content storage and retrieval. Unfortunately, I spent an afternoon without finding the way.

Later, practitioners told me that this cannot be achieved now, and it still requires additional development of upload and retrieval front-ends. At present, the network is still in the stage of proving that it has the storage space and the ability to ensure the security of customer data. It is still a long way from storing real data in real ToC and ToB.

In fact, in the second phase of Filecoin's space race, there are incentives for application developers and tool developers, such as allowing developers to develop application front-ends with storage and retrieval capabilities. Currently, storage and retrieval are command lines and are not available.

Juan also emphasized this in his latest tweet: "We already have huge capacity and don't need more. Now, the network must store valuable data for users. We must focus on using capacity."

Although Juan may be trying to divert attention, for Fileocoin, being useful may be its biggest challenge in the future.

In any case, although the Filecoin mainnet has been launched and the ecosystem has been gradually improved, the real landing application is still a long way off for C-end users. Today, Filecoin still needs imagination. Of course, when it comes to practical applications, in the entire cryptocurrency world, how many public chains dare to say: I am very useful?

As for the Filecoin mining industry, practitioners generally believe that it will get better and better.