8 Questions about Major Events | Don’t Fall into These Pitfalls of Filecoin

This article was originally written by IPFS Force Zone

Pitfall No. 1: Is FIL really circulating in the market?

Xin Ge: The official has always said that there will be no FIL in circulation before the mainnet is launched. As for the futures currently being traded, the risk is relatively high. The main reason is that the exchange's own risk resistance is unknown. Can they fulfill such a large trading volume? It is better for everyone to be cautious and make good judgments.

Pitfall 2: The value of the Filecoin storage market

Xin Ge: Many people have talked about the valuation model, especially the price of the currency. In fact, Filecoin is not only a blockchain project, it is also a storage and retrieval market with real landing scenarios. So when we look at its value, we also need to look at these two aspects.

As far as blockchain is concerned, the value of Filecoin lies in the price of FIL; as far as the network is concerned, Metcalfe's Law tells us that the larger the scale of network application, the higher its value (doubled).

Since there are already 1 million IPFS nodes, and considering other factors, the valuation of the entire market (including IPFS and Filecoin) may reach 15 billion US dollars.

Of course, it is important to remind you that all valuation models are wrong, but some are still valuable for reference. So the $15 billion just mentioned is just a valuation for reference.

Pitfall No. 3: Can Filecoin’s economic model prevent malicious market crashes?

Brother Xin: FIL6, FIL12, and FIL36 mean that the 1CO FIL will be released within N months after the mainnet is launched. Here I will tell you a little secret, because everyone is very confident in FIL, so among these types, more people buy the 36-month one, which means it will be released in 3 years.

According to the previous economic model, 70% of FIL is mined by miners, and it is halved every 6 years and decreases exponentially, so that the release of FIL can be well controlled and will not cause particularly large fluctuations in the price market; but later, Filecoin changed the mechanism because for the storage network, a certain amount of storage is required to ensure network stability. Therefore, the network benchmark is now increased, and the initial release should be small, and then the exponential decline will be implemented after reaching a certain scale.

That is to say, there is not that much FIL released in the early stage, and coupled with the mortgage and lock-up period of mining, it is difficult for speculators to maliciously dump the market.

Pitfall 4: What do you think about the repeated delays of Filecoin? Will the official release date be delayed again in the future?

Brother Xin: Actually, the authorities have postponed the project several times before. When they gave the Gantt chart, they always emphasized that this was the best estimate. What is the "best estimate"? It means that if there is a problem, there will be a postponement. Therefore, we are mentally prepared.

As for the delay, the farther away from the time node, the greater the possibility of delay; the closer it is, many things have been determined, so the possibility of time change is smaller. So will there be any changes now? This depends on whether the security audit, code and other tests can be completed smoothly. After all, the blockchain project is like building a rocket. Once it is completed and launched, it must be sent to orbit. Therefore, safety is the top priority. If safety cannot be guaranteed, how can there be a "launch" on time?

Pitfall No. 5: What is the difference between cloud computing and stand-alone mining?

Brother Xin: Although there are two modes in the market, single mining machine and cloud computing, they are actually beginning to converge - mining pool and cluster mode. Even when buying a single mining machine, users rarely take it home, and most of them are hosted. This mode is very similar to cloud computing.

If there is a difference, the difference between a single mining machine and cloud computing power is that the flexibility when facing iteration is too poor. Cloud computing power can be quickly changed according to changes in the network and algorithm, but a single mining machine cannot do this.