Rocket takeoff, exploitation of miners, Ponzi scheme, how does the overseas community view Filecoin?

Less than a week after the mainnet was launched, Filecoin token FIL is experiencing a sharp drop in price and public opinion.

CoinGecko data shows that FIL is currently trading at $32.05, down 72% from its highest point of $114.32 on October 16.

Not only the price, Filecoin is experiencing a Waterloo in public opinion.

Chinese miners and investors have been discussing the Filecoin economic model, questioning the "inhumane" pre-staking and official large-scale transfers. Some Chinese even initiated a fork project.

On the other hand, compared with the enthusiasm in China, there is little interest in Filecoin abroad.

Ethereum founder Vitalik Buterin only mentioned Filecoin when introducing EIP 1559, and Mechanical Capital partner Andrew Kang even said that Filecoin could be a Ponzi scheme 1,000 times larger.

Filecoin Google search terms focus on mainland China

So, what do the foreign crypto community think of Filecoin? Why is Filecoin cold in the west and hot in the east? TechFlow interviewed and sorted out the opinions of the foreign crypto community on Filecoin to get a glimpse of the overseas public opinion situation of Filecoin.

Angel investor WhalePanda: FIL will continue to fall

Filecoin’s coin issuance will be similar to ZCash, and the most recent example is Grin, with a small supply in the first few hours/days and a minimum unlocking period of six months.

Prices would start from their highest point and begin an endless sell-off that would last for years.

As I recall, the FIL private placement price was $0.5, unlocked in 12 months, and the ICO price for unlocking in 6 months was $2.36.

For about 3 years after the private placement, the OTC price was about $2-3 until a few months ago. The price started to rise sharply, with a lot of demand coming from China. In July, the 6-month unlocked coins were selling for $7-8, which rose to $25 a week or two ago.

Most private and public exchange traders sold their coins/accounts before the mainnet launch because we all know how this will end.

Most of the token economy is vested coins of miners, and for miners, this really shouldn’t be a surprise…but 1.5 million FIL was transferred to exchanges after the launch, which is very shady.

I expect FIL to dive every day for at least the next year.

Blockchain investor The Crypto Dog: Cutting leeks

As far as I know, the reason why Filecoin is hyped in China is that miners have invested a lot of costs in equipment.

Since they have already spent the money, they must make FIL valuable so that they can eventually exit and earn back their money.

Therefore, those in power have gone to great lengths to create FOMO and hype so that the Chinese cryptocurrency community can feed miners. This is known in Chinese as cutting leeks.

We don’t have a large Filecoin mining community in the West, so, no one is telling us to buy FIL/IPFS.

Andrew Kang, Partner at Mechanical Capital: Ponzi Scheme

Filecoin mining is a Ponzi scheme on a 1,000-fold scale, and the Chinese MLM organization that sold Filecoin mining machines was eliminated by the US Filecoin team.

In China, more than $1 billion was used to purchase Filecoin mining machines. More than $100 million of FIL was purchased by Chinese institutions from Western ICO investors over the counter.

Either this is one of the greatest pieces of economic engineering in the history of cryptocurrency, or Filecoin needs better economics advisors.

Huobi Capital’s Celia Wan: The Fallacy of Sunk Costs

I am often asked recently why Chinese people like Filecoin so much?

——The fallacy of sunk costs.

Imagine that you own a bunch of Filecoin mining machines and have deposited a lot of money in them, and now you need actual Filecoin to stake in order to mine more Filecoin.

You tell me what to do?

Investor Anish Agnihotri: Filecoin storage costs are cheaper than Amazon

When the FileCoin mainnet went live, I was curious about how much it actually costs to store data on the network, so I spent 2 hours building a website.

Note: Website data shows that the storage cost of 1GB is 0.052USD. In comparison, Amazon is 5.3 times more expensive to store the same data, but currently 2,500 transactions only store 3,371GB of data, costing 2.85FIL.

TRON founder Justin Sun: Criticizes Filecoin

Is this a scam? 1.5 million FIL, 200 USD per FIL, the highest value was 300 million USD. Now the price is below 60 USD. It has dropped by 70%, no lock-up, no announcement to the public, no announcement to the public. How much did you sell? Juan Benet, is this OK?

Without the consent of the community, all of it was transferred to the exchange. Investors in the exchange, especially those in the United States, should ensure that they are held accountable under the protection of the SEC.

15% to Protocol Labs Genesis, vesting linearly over 6 years. 5% to #Filecoin Foundation Genesis, vesting linearly over 6 years. Founders' shares should follow vesting rules. These are the legal documents they signed with all FIL SAFT investors

Everyone, including miners, investors, and founders, should follow the linear vesting rules. Violating the vesting rules will have serious legal and compliance consequences. Do you really think such a sell-off is okay?

Juan, the creator of FileCoin, speculated that Sun Yuchen’s previous remarks were an attempt to fork Filecoin. He also said: “Sun Yuchen is not anyone’s savior, just ask Hive. If he does fork, I would give some advice to miners who are considering joining: Review all the previous TRON-related projects, are you sure you want to become a victim of a scam project? Good luck!”

Media person James Spediacci jokingly said that Justin Sun was already planning to copy and paste the Filecoin white paper and lead Chinese miners to revolt and fork Filecoin, calling it "JustFiles."

Blockstack co-founder Muneeb: Support FileCoin

I am very excited about the launch of Filecoin mainnet. Here are my memories about Filecoin.

Summer 2014, Mountain View, California. Juan (founder of FileCoin) was working hard on IPFS. Juan joined the Y Combinator incubator at that time. YC partners told Juan in a group meeting that he needed to stop programming and write the Filecoin white paper first. Juan disappeared for two weeks. Our group (we were in the same batch in YC S14) met every two weeks on Tuesday for updates. Finally, Juan showed up with the Filecoin white paper.

YC's demo day was in August, when few investors understood crypto. It felt like Filecoin and Blockstack were speaking French, while everyone else was speaking English. Fortunately, institutions like Union Square Ventures and Winklevoss Capital existed and understood our potential.

Juan was one of the first people to look at IPFS. IPFS is an interface for peer-to-peer storage. Developers loved it, and you could see participation on Github going up.

In 2017, crypto was in high demand. The new Filecoin paper came out, and there was no platform like CoinList at the time, so Juan built a fundraising platform internally using AngelList, and the token issuance attracted a total of about $200 million in funds. (A few months later, Blockstack raised about $50 million using the same CoinList)

Juan is back to work. His take is that launching a blockchain is like launching a rocket: You need to figure it out. It’s a complex undertaking, and the storage opportunities are huge.

The Filecoin testnet takes off in China. About $100 million worth of storage hardware is humming on the testnet. What seemed like a fantasy during YC is now getting closer to reality. Buying hardware and converting it directly into cryptocurrency is the key here.

As a friend, colleague, and investor, I am rooting for Filecoin to succeed. Some people have lost their dreams, and Juan is not one of them.

Investor Nico Deva: The much-anticipated Filecoin turned into a shit show

After 200 million USD ICO and 3 years of development, Filecoin has transitioned from the validation network to the main network at block 148888. Within 24 hours of the main network launch, most miners have already started to strike, talking about failure and forks.

Why is this happening?

Filecoin is very complex and requires high-end hardware, including a minimum of 128GB of memory. A mining machine can cost up to $40,000 (including hosting and maintenance), and a 350TB Filecoin mining machine usually costs at least $20,000.

At the same time, you need to stake FIL, which is a guarantee, but it is a useless measure because no one has FIL when they start mining. Miners need to buy FIL to continue to increase production to full capacity, otherwise they can only stay at 1/7 of the production capacity.

In China, miners are disgusting. Just use a napkin to calculate that your mining equipment needs at least $20,000 worth of hardware, and they force you to buy more coins.

The total network capacity is currently around 600PiB, and based on an installed capacity of 4200PiB, that's equivalent to 240 million yuan worth of hardware, not including all those waiting to be installed. This is not a market valuation, it's real money, real servers, and this is still a conservative estimate.

Miners invested so much hardware in the early days, but because they were forced to buy FIL, they were unable to continue to increase production capacity.

At the same time, although the unlocking period for all coins is said to range from a minimum of 6 months to 6 years (team), 1.5 million FIL was transferred to Huobi and OkEx.

Miners provided huge support to the Filecoin team during development, but now they have been defeated all at once. The much-anticipated Filecoin launch turned into a shit show, which is disappointing.

The FIL004 Filecoin Improvement Proposal aims to change the miners' unlocking ratio from 100% to 75%. The proposal has been adopted.

All in all, it looks like miners are getting hit pretty hard, Slack is full of miners’ complaints, and Filecoin is busy ignoring them.

Storecloud founder McCoy: Costs are transferred to miners

The common mistake of Filecoin and EOS is to impose a lot of infrastructure costs on the founding miners.

If the economic incentives and security of the settlement layer are valuable to the founding miners, then they will be required to do more work and then implement upgrades to the “computer”.