4 Things I Wish Someone Told Me Before I Invested in Filecoin

According to the official blog of Filecoin, the Space Race test network will continue to run and will gradually enter the main network through protocol upgrades and state transitions in the next 3 weeks. The Filecoin main network will be officially launched at epoch 148888! After the announcement was released, FIL futures rose in response.

In fact, according to the latest data above, it can be seen that between the end of July and August, FIL ushered in a new round of upward trend. Looking back at the related events, it is not difficult to imagine that in August, the Filecoin mainnet started the first round of large miner testing, and the storage sector naturally ushered in a round of sector rotation.

Now that the mainnet launch is entering the countdown, Filecoin is bound to become a hot spot in the entire market. How should we invest in it?

How many times have you heard “I heard Filecoin is a good investment, should I buy it?”

How many summits have you attended? "I heard about Filecoin mining, do you think it's reliable?"

These conversations are doomed to fail from the start, not because I don’t think this is a good project, but because the investment theme is limited to this being a good deal. You need a strategy to enter and exit Filecoin; of course, you also need to understand the current stage of the project, economic growth, investment timing, and capital expectations.

As early as August 2017, Filecoin completed a fundraising of 257 million US dollars, setting a record for the highest financing of early blockchain projects at that time, attracting countless people's attention and setting off a wave of IPFS mining machine rush in the market. This star project favored by eight top global venture capital institutions has the halo of the strongest ICO in history, blockchain 3.0, and the next 100 billion gold mine, but it also carries the negative label of "mining machine scam".

So before you start investing in Filecoin, decide what you are willing to risk and invest in. Determine the amount of time or effort you are willing to invest in this activity, as well as the time horizon and exit strategy for the investment.

Filecoin is a distributed network designed to store the most important information of human society. It is a decentralized storage network that transforms cloud storage into an algorithm market. In the era of big data, data utilization and mining are the main themes.

So far, HTTP is the most successful case of distributed file systems that have been deployed. Its combination with browsers is the best partner for Internet data transmission and protection. However, the progress of Internet technology has never stopped and has even been accelerating. As the scale of the Internet becomes larger and larger, existing technologies are increasingly exposed to many drawbacks, and various data leaks occur repeatedly:

2020.7.16, the 3.15 Gala exposed the thief plug-in in the mobile phone, and the text messages were completely transferred and leaked.

On July 16, 2020, Twitter was hacked, and the Twitter accounts of Bill Gates, Uber, Apple, Elon Musk and others were hacked one after another.

In May 2018, Twitter was exposed to a security breach, leaking 330 million user passwords;

In November 2017, the US Pentagon accidentally leaked 1.8 billion pieces of user information collected since 2009;

In 2016, more than 167 million LinkedIn accounts were sold publicly on the black market;

In 2015, Jifeng.com was exposed to have leaked the information of 23 million users.

How can we break down data silos and promote data flow under the premise of data security compliance and privacy protection? How can we transform the traditional "cage-style control" approach to "data security governance" thinking?

IPFS was born to solve the above problems. It is the only universal distributed file system in the world with low latency and complete decentralization, integrating fast download speed, optimized global storage, greater security, and sustainable data protection.

Cryptocurrency trading is far more psychological than most people realize, and it is important to become the type of investor that best suits your personality type, otherwise it could lead to disaster. At this stage, Filecoin investments are mainly divided into three categories:

1. Purchase a mining machine

Filecoin mining machine components include CPU, GPU (graphics card), motherboard, hard disk, and memory, which is equivalent to a high-performance computer. Generally speaking, everyone can configure the hardware by themselves and assemble a Filecoin mining machine. Since the beginning of this year, Filecoin has continuously announced the ideal accessory parameters of Filecoin mining machines, such as determining the SDR algorithm, supporting 1080 and 2080 series GPUs, and launching official hard disks.

However, for users, it is not enough to only understand the hardware parameters of the Filecoin mining machine, because what really determines whether you can make money is not the hardware, but the writing efficiency of a single T.

2. Purchase cloud computing power

As far as Bitcoin mining is concerned, the cost of buying a mining machine to participate in joint mining and buying cloud computing power for mining with the same computing power differs by more than 30%. Although cloud computing power is convenient, it contains a very high premium. In Filecoin mining, the premium of cloud computing power is even higher. Mining is an industry that pays great attention to cost. If the cost is too high, it is better to buy coins directly.

In addition, there are many differences between Filecoin mining and Bitcoin mining. The more data a Filecoin mining machine stores, the more valuable it is, but users who purchase cloud computing power only have the right to use it for a period of time, not ownership.

If the Filecoin mining machine is likened to a house, then the user who buys the cloud computing power is just a sub-landlord. After the contract expires, who will own the data stored in the house and who will get the profit from the house price increase? These are all controversial issues. From the current market perspective, users are in a weak position and are likely to suffer losses in the end.

3. Purchase FIL futures

The total amount of FIL is 2 billion, of which 70% (1.4 billion) is produced by miners, the remaining 15% (300 million) goes to the project party, 10% (200 million) goes to early investors, and 5% (100 million) goes to the foundation.

In the early days, the income of miners mainly came from block rewards. According to the distribution mechanism of Filecoin tokens of Juan's team, the total issuance volume is 2 billion. Among them, 70%, or 1.4 billion FIL coins, are given to storage miners as block rewards. In other words, 1.4 billion FIL coins will be generated by storage, which is the early income of miners.

On the afternoon of October 12, the Filecoin baseline network standard was adjusted from the original initial value of 1EiB to 2.5EIB. The block reward dropped from about 15 FIL to 10.55, which means that it will directly affect the reduction of 40,000 to 50,000 FIL rewards per day.

At this stage, the Filecoin network has been updated, and Filecoin officials are always monitoring the operation of the new version of the network. According to Filscout, the total computing power of the entire network is currently 523.01PiB, and the average block time is 31 seconds. The difference between the new version of the network and the previous one is that the node has changed from "t" to "f".

So to determine what type of trader you are, Filecoin investment is a temptation, please remember: mining is a heavy asset investment with poor liquidity.

Mining is a heavy asset investment. Whether you buy a mining machine or cloud computing power for mining, you first have to pay a fixed cost, which will be slowly recovered through mining. Filecoin miners need to pledge tokens and cannot withdraw at will, otherwise they will be punished by the system. It is not easy for investors who have purchased cloud computing power to withdraw midway.

If the Filecoin mainnet suddenly starts to fall after it goes online, investors who bought the coins can sell them directly in the market to stop losses in time, while investors who bought mining machines or cloud computing power can only continue to suffer, unless they have very good financial means to hedge, but this is too demanding for ordinary people.

The Filecoin mainnet is about to go live, which is bound to ignite the distributed storage sector. If you don’t do your own research, you will rely on the research of others. Only by doing your own research and forming your own insights can you better fight the psychological factors of risk.

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