They have spoken out, will it add fuel to the fire or pour cold water on Filecoin?

Reprinted from: Odaily Planet Daily

Compiled by Xin Nan, operated by Gai Yao, edited by Hao Fangzhou

IPFS will finally have its highlight moment of "landing".

The IPFS ecosystem has been constantly hyped since the huge financing in 2017. It has moved from irrational capital influx to rational layout and construction. The game changers and leaders of the decentralized storage ecosystem are standing on the same starting line, preparing for the "first mine" of the main network that will be launched soon.

Standing at the beginning of the rise of the IPFS ecosystem, on July 22, 2020, Odaily Planet Daily jointly organized the "Interstellar Rise - IPFS Technology and Distributed Storage Ecosystem Cloud Summit" with 36kr, Maike Storage, and IPFS China Community.

More than 20 senior practitioners gathered here. Starting from the roles of capital, exchanges, miners, and technical service providers, they discussed the application prospects of IPFS technology and welcomed the opportunities and challenges of Filecoin.

Through the perspectives of these practitioners who are deeply involved in the Filecoin industry, we have a more accurate and in-depth understanding of this mysterious project that has been labeled as "niche", "funding", and "scamming" in the past few years.

If you also want to get a piece of the Filecoin pie before the "first mine", I believe the essential content of this summit will be helpful to you.

The current status of Filecoin: an overheated market and a traceable driving force behind the scenes

Since 2020, almost all media, capital, and exchanges have been clamoring to invest in Filecoin. So what is the relationship between Filecoin and IPFS, and how high is its market ceiling?

In his keynote speech on "IPFS", Xu Kun, Chief Strategy Officer of OKEx, explained that IPFS and Filecoin are two sides of the same coin. The goal of IPFS is to supplement or even replace the Hypertext Media Transfer Protocol (HTTP) used in the past 20 years, hoping to build a faster, safer and freer Internet era. Filecoin is a blockchain project based on IPFS technology combined with a token incentive layer design.

In terms of market size, Xu Kun predicts that the global cloud storage market size will reach more than US$100 billion by 2022.

The first step for exchanges to participate in FIL is to launch FIL futures trading.

As one of the "Big Three", OKEx was the first to launch the Filecoin (FIL) USDT perpetual contract on the day of the conference. Xu Kun said that after the Filecoin mainnet is launched in the future, it will look for exchanges that have opened FIL spot trading and have good circulation to gradually replace the FIL/USDT index components.

In the first roundtable of the summit , "Betting on the Distributed Storage Track: Investment Opportunities and Layout Directions" , ZT Global CEO Li Xiaocheng also took the lead in launching FIL futures trading. In his opinion, since a large amount of funds and traffic are currently pouring into the Filecoin market, this may be a good thing for exchanges and also a window period.

Li Xiaocheng estimated that the more reasonable price of FIL futures is in the range of 10-20U, but he also observed that the price of some platforms is around 40-50U, and he did not rule out the possibility of some speculation. From a multi-dimensional evaluation, he believes that the price of FIL futures on some platforms is inflated.

Different contestants have different understandings of IPFS investment opportunities in this arms race. Unlike those who remain optimistic about the market, investors have poured cold water on the overheated Filecoin market.

Huang Lingbo, partner of Distributed Capital, believes that Filecoin is more likely to go beyond the circle and land, and integrate with the traditional market, but the current Filecoin is overheated. The overheating is reflected in the interest attribute of Filecoin, which is not commensurate with its long-term value attribute, and the market needs a cooling process.

Du Jun, founding partner of Node Capital, expressed the view that the true value of Filecoin has not yet been verified by the market and users, and there may not be any story to tell after verification, so there is a high possibility that there will be a mess after the Filecoin mainnet goes online.

Du Jun's interpretation is that behind every wave of hot spots in the cryptocurrency market there are their own "driving hands", and the "Shenzhen Gang" has played a significant role in promoting the Filecoin hot spot.

"The sales data of the IPFS mining machine market has exceeded 1 billion RMB (but Du Jun believes that the actual data is much greater than this), and there are more than 300,000 users participating. However, these IPFS mining machines may not all mine Filecoin tokens. These people are the biggest contributors to the benefits during the period before the launch of the Filecoin mainnet, so they have enough motivation to promote the hype of Filecoin." In addition, Du Jun said that the attitudes of the domestic and foreign markets towards the decentralized market represented by Filecoin are polarized. The external market's perception of Filecoin is not very strong, and the number of people paying attention to it is also limited.

Filecoin investment opportunities:

Storage is the biggest value in the 100 billion dollar market

Despite the many risks and overheated hype, this does not prevent a steady stream of funds from continuing to flow into this market.

As Huang Lingbo, partner of Distributed Capital, said in the first roundtable, Filecoin mining tools have strong industrial attributes, which is very different from Bitcoin miners. Many Filecoin miners are demanders with an urgent need for storage.

As a mining brand serving Filecoin miners, Maike Storage, its founder Hou Feng estimated the ecological value of the Filecoin market to be over 100 billion US dollars.

This sounds like an unreal and distant number, but it is actually inseparable from the pain point that Filecoin and IPFS vision solve for modern society - "storage".

In Hou Feng's view, Filecoin's greatest value lies in "storage" itself. In the next few years, users' storage of data will show an explosive upward trend. After the 4G network is truly rolled out, food delivery, mobile payments, live broadcasts, short videos, e-commerce shopping, and even the emergence of various cloud platforms have profoundly changed people's lives. A family documentary of several minutes requires hundreds of MB of storage space, and countless chat records, news, videos, audio and video, and files on the Internet every day require astronomical storage capacity.

Regarding the ecological value of Filecoin, Jun Yao, host of the Chain Node Live Room, Hou Feng, founder and chairman of Maike Storage, Kristen, CMO of ChainX, Andy He, CMO of Computing Power Interconnect, Li Peicai, co-founder of Shanghai Waiyi, and Shang Silin, partner of Mars Blockchain, conducted in-depth analysis in a roundtable discussion titled "Opportunities and Challenges of Participating in Filecoin: Ecological Prospects and Application Value".

Shang Silin, president of Mars Cloud Mining, believes that Filecoin consists of three levels: the basic ecological value of Filecoin mining and the secondary market; the ecological value of Filecoin's commercial applications; and the ecological value of native applications including Filecoin wallets, clients, and developer tools.

Shang Silin believes that it is expected that FIL will enter the top 10 in market value in the first year, and it is also a reasonable expectation that the current secondary market size will reach 2.5 billion US dollars; the cloud storage and distributed storage markets targeted by Filecoin's commercial applications are expected to achieve an annual growth rate of at least 18-20% after the Filecoin commercial ecosystem is improved.

Filecoin mining hidden rules: controlling risks and calculating costs

If you want to "dive into" the Filecoin blue ocean, mining FIL is a recognized feasible "swimming style".

But as mentioned above, after receiving a large amount of financing in 2017, the FIL mining machine market has been flooded with speculators who lack strength and long-term. As long as the main network is not online, the naked swimmers will not surface.

The still opaque industry environment and the various watered-down machine parameter propaganda by manufacturers are obstacles that stand in the way of new players and new capital entering the market.

In another roundtable, four hard-core technology providers in the Filecoin mining track, including KeyPool co-founder Jia Xudong, Spacetime Cloud Technology Chairman Lai Chuhang, Pomegranate Mining Pool Technical Director Li Bai, and 1475 co-founder Andy, discussed with Odaily Planet Daily senior reporter Huang Xuejiao on the topic of "Which Filecoin mining company is the best: technical strength and mining efficiency" .

In this roundtable discussion, four powerful players in the FIL mining circle not only generously shared the average order value and sales strategies of their products, but also analyzed the current common cost-effectiveness indicators in the market and the historical problems left over by Filecoin.

The packaging speed per 10,000 yuan is generally recognized as a relatively reliable evaluation indicator at present.

Li Bai from the Pomegranate Mining Pool believes that although this indicator cannot fully reflect the quality of the entire solution, it can basically reflect the strength of the mining machine. The indicator still has two shortcomings: one is the cost of subsequent equipment expansion, and the other is the relationship between packaging speed and obtaining tokens. Miners should consider the impact of multiple aspects such as hardware solutions and software optimization in actual mining.

KeyPool co-founder Jia Xudong also reminded miners and investors that when using this indicator for estimation, they must ask the miners clearly what the price benchmark for calculating this indicator is. For miners, they should calculate the indicator of packaging speed per 10,000 yuan based on the price in hand. He also shared the effective computing power in the market, which is estimated to be around 2000 PB. Calculating the payback period, the reference coin price given to all investors is between 50-70 RMB.

Regarding the possible collapse of unreliable miners when the mainnet is launched, the "veterans" in the mining circle all believe that this is a reasonable phenomenon, and have reminded miners to pay attention to possible risks, such as technical risks, policy risks, monopoly risks, risks of changes in economic models, and the stability of consensus and the network.

Xu Kun also gave several risk warnings:

• The Filecoin project itself has more complex rules from the technical level, consensus level, and incentive level. Especially before the mainnet is officially launched, there is still uncertainty about details such as the pledge system and execution-level algorithms.

• Whether the uncertainties that the Filecoin project may encounter in its development can be supported by the continued growth of real storage demand remains to be seen.

• There is a mixed bag of mining machines and cloud computing products, and there is information asymmetry in the market, so you need to be careful in distinguishing them.

• Participating in mining requires a large capital investment, and mining income is affected by diverse factors such as token prices and network computing power. There is a certain degree of uncertainty, and we must have rational expectations for the investment return cycle.

The Future of Filecoin:

Monopoly needs to be alleviated, and business prospects are promising

The last roundtable focused on the commercial future of distributed storage. Zhang Chao, partner of BiNiuniu, Lou Danfeng, founder and chairman of Diancun Technology, Calvin Cao, co-founder of Star Continent, Yang Xiao, COO of Panda Miner, Lao Feng, co-founder of Mirror Network, and Yan Zitong, founder and chairman of Xi'an Lingdong Computer System Co., Ltd., interpreted the Filecoin economic model and cycle.

As Lai Chuhang, chairman of Spacetime Cloud Technology, said, the proportion of the current Filecoin customer base has changed, and investors are moving from irrationality to rationality.

As the Filecoin market heats up, capital and investors in the mining and cryptocurrency circles have gradually become rational, and users' risk awareness is increasing.

When talking about the high threshold for small retail investors in Filecoin mining, Lou Danfeng, founder and chairman of Diancun Technology, said that the right to mint coins cannot be controlled by large miners, and that unlocking in batches, miners' staking and locking positions can reduce monopoly.

He further explained that in the early stage, the efficiency of currency production was low, which was due to security considerations, and they did not want the data to be damaged due to the downtime of small nodes. However, this has invisibly raised the threshold for mining. After Filecoin matures, more individual nodes will inevitably be involved in order to truly decentralize and maintain the stability of the network.

"When big miners control the right to mint coins, the project will be controlled by a few people to a certain extent, which is not good for the ecosystem. Therefore, the current official unlocking in batches, miner pledge and lock-up mechanisms can slow down the pace of monopoly. In the long run, we need to find a real flow scenario to allow these coins to flow to where they are in demand, so that they will not be controlled by capital." Lou Danfeng said.

But it is undeniable that Filecoin’s business prospects have been recognized by the industry. Panda Miner COO Yang Xiao explained the four directions of Filecoin’s ecological application:

The first is about the storage of information security and privacy data. For example, the data from home cameras and medical data have higher requirements for privacy, and centralized storage is not necessarily the best solution:

The second is the permanent storage of information, such as data related to astronomy and scientific research;

Third, some data types with distributed scenarios, such as alliance chains and IoT data, are naturally stored in a distributed manner;

Fourth, content rights confirmation.

The mainnet is about to be launched. From the sharing of 20 big names, we can feel that the Filecoin market does contain considerable dividends, but if we only focus on the currency price and payback period and ignore the long-term stable development of the industry, it is possible that the collapse will come before the sudden wealth.

Odaily Planet Daily will also continue to track and report on the IPFS ecosystem and its implementation.