How to understand the income structure of Filecoin miners

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Filecoin has created a platform to match the supply and demand of data storage, and Fil is the universal consensus currency for the operation of the system.

Filecoin's four miner revenue structures

As we all know, the Filecoin network is a data storage network that implements data sharing device storage in a distributed manner, and its token Fil is the medium payment for the operation of the entire system.

The circulation speed and quantity of Fil coins are a direct reflection of the robustness of the entire Filecoin network. In the entire Filecoin economic system, there are four types of economic benefits.

① Revenue from the release of new coins: Storage miners obtain the issuance of new coins in the Filecoin system by investing in storage devices and bandwidth. This part is the same as the economic model of the Bitcoin system. To put it simply, it is mining by manufacturers, and mining will continue for several years before it ends.

② Storage market income: Storage miners obtain transaction tokens by selling their own storage space. This process belongs to the application stage of distributed storage technology, exchanging space for currency.

③ Blockchain transaction fees: Storage miners compete and create new blocks to obtain transaction fees included in the transactions in the blocks. This is somewhat similar to the principle of creating rooms in many games and then charging players transaction fees. You can think of it as a viewing fee, and this part of the fee is the same as the Bitcoin system.

④ Retrieval market income: Retrieval miners obtain transaction tokens by providing data retrieval services. Retrieval miners sell their own traffic. There is only one way for retrieval miners to earn income, which is retrieval. Of course, as the use of the Filecoin network increases, the demand for retrieval will also increase.

The miners with the most income methods are storage miners. Except for the retrieval market, the other three methods are also means for storage miners to obtain income. Then let's take a brief look at the data storage process and data retrieval process.

Filecoin Storage Market Workflow

There are only three types of participants in the Filecoin network: storage miners, retrieval miners, and users. The storage market process is roughly as follows:

• Step 1: Storage miners submit quotations, which include their own saleable space and corresponding staked tokens.

• Step 2: The user submits a bid. The user submits a purchase order to the system based on his or her storage needs, and the information includes the number of reward tokens paid;

• Step 3: Blockchain system order matching. After the system matches, the user sends the data, and the storage miner receives the data and returns the storage certificate.

• Step 4: In the final payment phase, storage miners complete data storage and report to the system, and then the system gives liquidation rewards. Of course, storage miners need to constantly prove to the network that they have been storing user data.

Does this sound a lot like Didi Taxi or Airbnb? The system matches supply and demand, and finally matches transactions. Payments within the system are based on Fil coins, but they are converted from the legal currency outside the system.

Filecoin retrieval market workflow

Next, we will learn about the search market, and its process is roughly divided into four steps:

• The first step: submit a quotation. Users and miners submit their own quotations to the network. The difference between the retrieval market and the storage market is that the retrieval market belongs to the off-chain market because it does not exist on the blockchain.

• The second step: data transmission and payment. After the user and the miner reach a transaction, a data transmission and payment channel is established. However, the entire transaction process needs to be completed multiple times. In order to prevent cheating by both parties, data sharding and small payment methods are adopted, so that it can be terminated at any time to reduce losses.

• Step 3: Submit to the chain, submit the transaction and order to the blockchain, the system will record and verify the transaction, and finally settle the payment result.

• Step 4: Retrieve the data source of the miner. The data may come from storage miners, data purchased from the retrieval market, or data obtained from other places. Retrieval miners are simply seed nodes in the network.

There are some differences between the above two markets. Storage miners need to stake tokens while retrieval miners do not need to stake tokens. Storage miners need to store data all the time while retrieval miners do not need to store data. Storage miners sell space while retrieval miners sell traffic. Of course, as a miner in the Filecoin network, it can be a miner of any role alone or a miner of both roles at the same time.

The primary value of IPFS manufacturers

Before the entire Filecoin network is officially put into market application, a very important action needs to be taken, which is the initial release of Filecoin. As a network payment medium, if users want to store data, they need to have Filecoin and need to purchase it. The initial circulation will be realized by storage miners.

To put it simply, IPFS vendors are responsible for the implementation. Although vendors sell storage devices to individuals, they are actually easy to manage and operate in the vendor's computer room. Filecoin mining equipment is different from BTC mining equipment because the Filecoin mining equipment itself is a storage server or storage hard disk.

Therefore, the first value of IPFS manufacturers is the release of Filecoin mining, and only then will other roles appear.

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