A clear understanding of Filecoin’s ecological niche and current status in one article

Author: Joss

Source: IPFS Force Zone

Preface

After the Bitcoin halving this year, the development of the entire industry seems to have stagnated. Some people say that IPFS & Filecoin are the next opportunity to lead the industry to explode.

Indeed, whether in recent times, IPFS & Filecoin has become the most noteworthy industry topic and entry trend this year, whether in terms of exposure in the media, summits, and communities, or in terms of market expansion coverage.

So what is the current status of IPFS and Filecoin? How big has the ecosystem developed?

Current state of IPFS

IPFS was launched in 2014. As an emerging network technology, it has been studied by a large number of technology enthusiasts and tried to be applied to life scenarios. According to data from the second half of 2019, the number of IPFS nodes worldwide has exceeded one million, and the data stored in the IPFS network has reached 10 billion copies.

It has been nearly 6 years since the IPFS protocol was released, and the technology has become more and more mature. As the next-generation Internet underlying communication protocol, IPFS has been successfully applied in various fields such as data storage, file transfer, online video, social media, decentralized transactions, etc., which are reshaping the entire Internet.

At the 2019 ETHDenver summit, 24 of the 52 participating projects submitted to the ETHDenver committee were built using IPFS!

This shows that IPFS has formed a trend in organizations that build product ecosystems based on Web3 ideas. Developers from all sides are studying how to decentralize their products or how to better replace existing centralized applications.

Decentralized version of Youtube

Currently, YouTube has 2 billion monthly active users worldwide, but unfortunately, YouTube's current profitability is not impressive. This is also a common problem of centralized streaming services, with high bandwidth, data centers, and operation and maintenance costs. IPFS can solve this problem to a certain extent.

The current IPFS version has been upgraded to V0.6.0. Compared with the past, the current network better supports data sharding and parallel transmission, and is more friendly and efficient for edge storage and edge computing. The implementation of multi-language versions also provides support for the wider use of IPFS.

Ethereum and Polkadot, which we are familiar with, have already used IPFS technology. Polkadot will later work with Filecoin to open up the value medium, that is, the circulation of encrypted tokens.

The application services that best reflect the value of IPFS are those that break down data barriers, such as Textile, which is an image storage service that connects user accounts, so that the same set of user identities and image data can be called between different applications.

However, IPFS currently also has obvious development obstacles, such as the lack of its own incentive mechanism to form self-drive, high node maintenance costs, no closed loop of value flow, and services relying solely on spontaneous behavior.

The cornerstone of the Web3.0 era is trust, and blockchain is an important technical support for web3.0. Due to the above problems, it is still difficult for IPFS to become the cornerstone network that supports human civilization, so Filecoin was created.

All data of human civilization can be stored and circulated in the Filecoin network, and Web3.0 will come after blockchain solves the data storage problem.

Filecoin Status

It can be foreseen that with the promotion of Filecoin, the capacity of the IPFS network will grow exponentially. The 1 million nodes just mentioned and the tens of billions of data will increase dramatically.

Of course, all this requires the development of Filecoin.

So far, the maximum number of mining nodes in the entire test network is nearly 50,000. As of the time of writing, the number of active miners is also around 5,000, and the total network computing power has reached 20P. The goal is to reach 100P before the main network is launched. According to this growth trend, Filecoin is expected to reach EB level within one year of launch, which is far ahead of all other distributed storage projects in the world. In addition, the current global Internet data is 180-200ZB.

Why did other projects go online early but failed to achieve such a scale?

Filecoin's proof of replication and proof of space-time allow for actual optimization of data security, ownership, stability, and efficiency - if storage miners do not provide good data services, they will receive a certain penalty, which is irreversible, and this set of logic is entirely run by machines.

Currently, Filecoin is implementing four versions (Lotus/Go-filecoin/Fuhon/Forest). The significance of multiple versions lies in the fault tolerance and efficiency of the network during the mainnet operation period. Through the implementation of different languages, the advantages of different languages ​​​​and design logics are reflected, and the on-chain data services can be interoperable. Of course, behind the different versions is the same set of specifications, just like a highway, with different lanes and different forks in the middle, but the same destination.

Filecoin Ecosystem

At present, the number of Filecoin ecosystem practitioners has doubled compared to 2019, including cross-industry entrants, veteran miners, and centralized storage entrants, but these practitioners are inseparable from four areas:

• Miners: Miners in this ecosystem are divided into storage miners and retrieval miners, who provide storage services in the storage market and retrieval services in the retrieval market respectively. Of course, they can also take both into account;

• Users: They are concerned about the cost of the required services. This cost will be higher than centralized storage in the early stage, but as the network grows, the cost of providing storage or retrieval services will be much lower than the current cloud services.

• Coin holders: Paying attention to the fluctuation of coin prices is a major boost to price increases;

• Developers: Developers pay more attention to tools, software development kits, software libraries, developer incentive programs, specification documents, and DEMOs.

They are compatible with each other, promote each other, and their multiple identities make the relationship more complex. More and more community of interests make this ecosystem more robust.

In the Filecoin network storage market, miners have the ability to sign contracts with clients to store their data for an agreed period of time in exchange for FIL. These nodes will periodically gain the ability to expand the Filecoin blockchain with blocks they create, that is, block generation; when a new block is created, storage miners will receive new FIL rewards and can receive storage service fees, which are indicated by the client.

Miners can also participate in retrieval contracts to provide clients with designated files in exchange for FIL. This part will promote the participation of nodes with high throughput, high bandwidth connections and reasonable locations in the network, thereby promoting the widespread and rapid distribution of files, especially those with high requirements for hot data. This part of the value is the landing value that storage projects provide to the Internet. At the same time, according to market development, when storage reaches a certain amount in the later stage, retrieval miners will play the most important role.

As participants, in addition to being simple coin holders and customers, we can also become mining pool operators and technology enthusiasts. Looking upstream, we can become software and hardware suppliers and application layer service providers. In the entire data circulation chain, it is easy to find a service demand, but what is not easy is the realization of the service.

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