Comprehensive interpretation of the popular project Filecoin: technical principles, economic model and ecological landscape

Written by: BlockVC

Editor’s Note: The original title is “IPFS/Filecoin: The stars and the sea are on the left, and financial enlightenment is on the right | BlockVC Research”

After the Bitcoin system ran for more than five years, a new batch of innovative projects driven by blockchain technology, represented by Ethereum, began to emerge. IPFS (the InterPlanetary File System) was also founded by Juan Benet in 2014 during this period. Benet released a draft white paper describing a "peer-to-peer distributed file system that attempts to connect all computing devices with the same file system." In the same year, Benet also founded Protocol Labs, a research laboratory for network protocols and the parent company of IPFS, and applied to join the prestigious startup incubator Y Combinator, which accepted the Protocol Labs team into its 2014 summer research.

In February 2015, the alpha version of IPFS was open to the public for testing; a year later, Protocol Labs completed a $3 million financing from DCG. In 2017, with the surge in ETH prices and huge financing of projects such as EOS, Protocol Labs issued Filecoin, an incentive layer blockchain project that matches the IPFS protocol, and completed a huge public offering of $257 million on CoinList. According to the information disclosed by Filecoin at the time, as of June 2017, IPFS network providers had stored more than 5 billion unique content files, and the data continued to grow.

Figure 1: Filecoin Primer results display, Protocol Labs

After seven years of development, the IPFS storage network has now grown into a global distributed storage option, and the Filecoin blockchain mainnet is tentatively scheduled to be officially launched in July-August 2020 after several postponements. The long-awaited FIL token will also be officially launched. Since 2018, China's blockchain and digital asset industry has always paid close attention to the progress of IPFS technology and ecology, and has developed a prosperous ecology around IPFS and Filecoin. This research report will explain the technology and application of IPFS from the perspective of the development of distributed storage and the first principles of technology, and extend to the Filecoin incentive logic built on IPFS, showing the ecological landscape around IPFS.

Distributed storage yesterday and today

Distributed storage is a method of providing storage services to a large number of ordinary servers as a whole through the Internet. This storage method usually has the characteristics of scalability, reliability, high performance, and easy maintenance. In the early days of the Internet, people used applications such as email based on centralized servers and a series of transmission protocols. The records and information generated by each conversation are centrally stored in a single-point server. If a single point of failure occurs one day, the server data cannot be accessed and the application will not be able to run. With the vigorous development of computer systems and various application software, centralized storage methods have gradually changed, and P2P transmission methods have gradually emerged.

Distributed storage in the pre-blockchain era

In 2000, Shawn Fanning, a college student from the United States, developed a software called Napster, in which you can download the MP3 files you want, and you can also upload your own MP3 files for others to download. Along with this, the prototype of P2P file transfer technology brought by this software, inspired by this, eMule and even the famous BT (BitTorrent) protocol came into being. Since then, the centralized storage method has undergone a huge change. It no longer relies on centralized servers, and peer-to-peer file storage and transmission applications are all the rage. Take BT as an example. As a content distribution protocol, it has many advantages - unlike centralized servers, the more people download the same content under the BT protocol, the faster the download speed. Using this method, the download server can handle multiple large file download requests at the same time without occupying a lot of bandwidth.

Magnet links are also developed on this basis. They are not based on the IP address or locator of the document, but in a distributed database, they use hash function values ​​to identify, search and download documents. That is, each file content has a unique hash value as an ID, and the distributed hash table technology is used to achieve addressing and storage of the entire network. Because it does not rely on a host in the startup state to download documents, it is particularly suitable for peer-to-peer networks without a central server.

Distributed storage solution based on blockchain technology

Blockchain itself is a technology that integrates distributed storage, asymmetric encryption and consensus algorithm. The distributed storage solution based on blockchain technology is similar to the BT protocol technology in that both files to be stored are fragmented and stored on each node. In this solution, blockchain technology perfectly surpasses centralized servers because of its data encryption and privacy protection, as well as its tamper-proof characteristics brought by decentralization.

In such solutions, token rewards are usually designed as an incentive layer, that is, when a node contributes its storage resources to the network, it can obtain the corresponding ecological tokens of the network. Currently, projects that use blockchain technology for storage include IPFS, Storj, Sia, etc.

IPFS technology application and principle: a subtle combination of HTTP transmission protocol, Git version control protocol and BitTorrent transmission protocol

The essence of IPFS from the first principles

IPFS is essentially a file sharing and transfer protocol, such as the HTTP Hypertext Transfer Protocol, which is one of the most successful and dominant transfer protocols on the modern Internet. However, unlike HTTP, which follows a client-server model, IPFS is a distributed node network that can both serve and request data.

In the client-server model, the "client" (usually a web browser) sends a "server" (usually a file hosting server) a request for a web element (image, web page, document, etc.) and returns a response from the web element that they will receive their request, which will be displayed on the screen. There are many "proxies" (computers and machines) between the client and server that help relay the HTTP messages between the two parties.

The disadvantages of this model and HTTP are as follows:

• Inefficient Structure : HTTP is structured to only allow clients and servers to request and serve a single web element at a time. This is why some web pages with multiple web elements take longer to load than others. While HTTP is efficient at moving smaller files, it becomes increasingly inefficient and expensive in a world where users create numerous data silos every day.

• Centralized Networks : Because web elements and data are requested from a single host server, it makes these central servers vulnerable to DDOS attacks and data attacks. These centralized networks make themselves open to government or institutional censorship. In 2017, the Spanish government responded to the Catalan independence referendum by censoring multiple websites and applications related to the referendum.

Accordingly, the IPFS model creatively provides a new model to avoid the above problems:

• Efficient structure : On IPFS, each node can provide content to or request content from node peers. The more nodes on the network, the more efficient the data transmission. Instead of requesting one web element at a time to complete a web page, clients on IPFS request multiple web elements from multiple nodes. As a highly simplified example, a web page with four web elements using a client-server model would require four client requests, and the server responses would be executed in sequence to fully deliver the page. With IPFS, four client requests would be made to four servers at a time to deliver the page.

• Distributed network : Instead of a single server farm to store and deliver data, nodes on IPFS are distributed and have equal power. If a node is attacked or shut down, data can still be retrieved from other nodes on the network. Distributed networks reduce the attack surface for censorship. In response to the Spanish government's censorship, the Catalan government used IPFS to upload previously banned websites and open them to the public.

Figure 2: Schematic diagram of centralized and distributed networks, The Block Research

It can be seen that through the above two main differences, IPFS realizes permanent information storage that cannot be tampered with or deleted, as well as resource sharing, compared to the HTTP protocol . IPFS uses content addressing and does not store duplicate files, saving storage space. Its distributed characteristics and encrypted storage allow the entire network to avoid single point failures and provide better privacy and security compared to storage solutions such as Baidu Cloud. In the long run, the new features of the IPFS protocol have significant advantages over HTTP, and the trend of IPFS and HTTP protocols learning from each other and gradually merging will be inevitable.

Design inspiration of IPFS

In order to achieve the above characteristics, the technical design route of IPFS integrates a variety of existing distributed systems and storage technologies, and innovates on this basis. It can be regarded as the culmination of blockchain technology in the field of distributed storage.

The IPFS network draws properties from previous distributed peer-to-peer systems, including distributed hash tables, BitTorrent, Git, and SFS. This creates "a single cohesive system that is greater than the sum of its parts," according to its white paper.

Distributed Hash Table: A distributed hash table (DHT) is a distributed system for storing and retrieving "values" or data associated with keys on a network of peer nodes. Each value corresponds to a different key, which provides the permissions required to access that value. On a DHT, all information is evenly distributed among nodes, and each node has an equal chance of being selected to store a value and key pair.

IPFS utilizes Kademila DHT, Coral DSHT, S/Kademila's DHT implementation to improve lookup efficiency and reduce attack vectors such as Sybil attacks.

Figure 3: Distributed hashing diagram, Wikipedia.org

BitTorrent: BitTorrent is a successful peer-to-peer file sharing protocol. In 2018, the protocol was responsible for 4.16% of global Internet traffic. IPFS leverages BitTorrent's data exchange protocol to reward resource-contributing nodes and penalize resource-leaking nodes.

Git (version control system): A version control system records changes to files over time so that users can access a specific version at any time. Git has implemented a distributed version control system that enables a distributed set of contributors to track changes to files by multiple parties. IPFS has implemented this control system on its protocol. On IPFS, data stored on the network is divided into multiple fragments, which are saved by nodes on the network. By implementing version control, IPFS ensures that these fragments are organized correctly and file changes are updated correctly.

SFS (Self-certifying File System): SFS is a distributed file naming system. IPFS uses it in its InterPlanetary Name System (IPNS). Using IPNS, users can generate verifiable addresses that link to IPFS content.

IPFS protocol stack

The IPFS protocol includes the following seven sub-protocols:

• Identity : IPFS nodes receive a NodeId, which is a cryptographic hash of their public key. The NodeId helps identify nodes in the IPFS network. When nodes connect, they exchange public keys and check if the cryptographic hash matches the public key. If they match, the connection is established; if not, the node disconnects.

• Networking : IPFS helps manage the connections of peer nodes on its network and provides transport, reliability, connectivity, integrity, and authenticity capabilities. IPFS is also designed to work on top of other protocols, giving it the ability to create custom addresses using its multiaddr functionality.

• Routing : IPFS uses a DSHT based on S/Kademlia and Coral to route information between node peers. Small data values ​​(equal to or less than 1KB) are stored directly on the IPFS DHT. Larger values ​​store references to nodes that may be able to serve the data.

• Exchange : IPFS uses BitSwap, an exchange function inspired by BitTorrent, to exchange data between nodes. BitSwap is essentially a data market where nodes will provide data blocks to other nodes in exchange for the data blocks they need. If a node does not have the data that a peer node needs, it will work to find that data.

• Object : IPFS objects contain data and links to other objects. Since data is fragmented and distributed to multiple nodes throughout the network, IPFS uses Merkle directed acyclic graphs to obtain data fragments to efficiently compile the entire file.

• File : IPFS can model the hierarchical architecture of the control file system based on the Merkle directed acyclic graph.

• Naming : IPNS enables users to create readable links to their content.

IPFS, which has a solid technology stack and stands on the shoulders of many previous technologies, has been running smoothly for more than four years since its release in January 2015. There are currently hundreds of applications running on the IPFS protocol, and there are millions of nodes around the world. Unlike many decentralized projects launched in the blockchain era in the past few years, IPFS has proven its practicality. According to statistics, in 2019, the IPFS public network grew 30 times, and Google Chrome, Firefox, D.Tube, IPWB, Ethereum, Origin, etc. joined the IPFS network. Today, IPFS is storing valid data for the world at a rate of 2.5EB/day.

Developers continue to contribute to the open source protocol, users continue to upload files to IPFS, and dApp developers continue to leverage its network to store data. In just over four years, IPFS has established itself as a key infrastructure for the decentralized Web. Currently, there are several mature applications based on IPFS, including the OpenBazaar store, the Brave browser, the Peerpad collaborative editor, and more.

Figure 4: Mapping Out of projects using IPFS, The Block Research

Filecoin: Incentive mechanism and public chain system based on

As explained above, the IPFS protocol defines how files are stored, retrieved, and transmitted in a distributed system. It can permanently and decentralizedly save and share files. It is a content-addressable, peer-to-peer distributed protocol. Although a series of progress has been made at the protocol level, the lack of an incentive mechanism has hindered the further development of IPFS.

Filecoin (token FIL) launched by Protocol Labs in 2017 is an incentive application layer and blockchain public chain system on the IPFS network. Filecoin mainly relies on the distributed storage technology provided by IPFS, the on-chain and off-chain trading markets realized by Ethereum smart contracts, and the efficient node discovery and data transmission realized by libp2p.

Filecoin stimulates the long-term operation of nodes through storage, retrieval, and block rewards to better serve the entire network ecosystem. Of the total issuance of 2 billion FIL, miners' rewards account for 70%, Protocol Labs receives 15%, public and private investors account for 10%, and the foundation retains 5% for ecological development. The issuance speed of FIL is divided into three parts: 50% of miners' rewards will be issued within six years; the foundation and Protocol Labs will be released linearly within six years; and investors will be distributed within one year.

From the perspective of FIL token distribution, most of the FIL supply will depend on miner rewards. In addition to investors who participated in the FIL public offering and can consider trading tokens after FIL is listed on exchanges, other industry participants mainly participate in the project by participating in Filecoin network mining.

Filecoin consensus and mining mechanism

Filecoin adopts a hybrid consensus mechanism: mainly based on expected consensus EC, supplemented by proof of replication PoRep and proof of time and space PoSt. Expected consensus is the main consensus for block generation in the Filecoin blockchain and is a probabilistic Byzantine fault-tolerant consensus mechanism. The difference from the general Byzantine fault-tolerant consensus is that after each round of leader election, on average one participant can submit a block.

The consensus is expected to be fair, unpredictable, and verifiable. Filecoin assigns weight to each generated block, and the chain with the largest weight becomes the main chain. The block weight depends on two factors: the number of parent blocks and the storage capacity of the chain. Since Filecoin has a mortgage mechanism, miners tend to mine the chain with the most parent blocks and the highest storage capacity to achieve effective convergence.

Filecoin uses expected consensus for two reasons: first, high transaction efficiency, so miners’ work will not be wasted. Second, it can control forks. Filecoin uses weight and mortgage mechanisms to encourage miners to choose the most effective chain and punish miners who mine multiple chains at the same time.

In the EC consensus, the probability of a miner winning an election is proportional to the miner's current storage capacity, which is measured by replication proof and space-time proof. Space-time proof can use proof chains and timestamps to prove that miners store data for a certain period of time. Even if the verifier is not online, it can verify in the future that the miner has generated a proof chain during that period of time, effectively preventing attacks on temporarily generated data.

The replication proof can prove that the data has been successfully created in a specific sector. It also prevents Sybil attacks, external data source attacks, and generation attacks. The replication proof prevents miners from using different methods to store less data than they promised to store in order to get extra rewards.

Figure 5: Proof of Replication to prevent attacks, Protocol Labs

In addition, it should be noted that participation and mining of Filecoin does not only require mining machines, but also requires staking tokens. In order to prevent the loss of customer data, Filecoin has set up a staking mechanism, which can also be understood as a miner penalty mechanism. When a transaction agreement is generated, miners will store the data provided by the customer in the network. This area is called a sector. Each sector will contain the content of the stored file and the promised storage duration, ensuring that customers can freely use their stored data within the agreed storage duration.

When a miner wants to add a sector to the Filecoin network, he needs to pledge a locked fund. This locked fund consists of two parts: the FIL tokens held by the miner himself and part of the block reward. If the miner is offline within the promised storage time, he will lose part of the locked funds. If the miner stops storing completely, he may lose all the locked tokens.

Storage and retrieval markets within the Filecoin ecosystem

In Filecoin, there are two built-in storage and retrieval markets for miners to participate in mining and bookkeeping. Through the quotation and order grabbing system, miners are guaranteed to receive tokens paid by users when providing services. Storage miners provide hard disk capacity in the market and obtain storage fees from users. At the same time, storage miners obtain the right to create new blocks (mining) and obtain mining rewards through time-space proof; retrieval miners help users retrieve and extract the saved content addresses from the IPFS network, thereby obtaining retrieval mining rewards.

Storage market: The Filecoin storage market is a verifiable market that is verified by the blockchain network. In the Filecoin storage market, customers put forward the demand for data storage, and the storage providers are storage miners who provide their storage space. Storage is not a one-time service and requires the stability and continuity of miners. Miners can get rewards in three ways: transaction fees; block rewards; network transaction acceleration fees. Transaction fees and network transaction acceleration fees are paid by customers in advance, and block rewards are generated by the system.

Retrieval Market: Filecoin retrieval market is an off-chain market that provides data needed by clients for retrieval, and retrieval services are provided by retrieval miners. Retrieval miners do not participate in the block generation process and directly obtain corresponding service fees from the client. The data source of retrieval miners can be from other clients, storage miners or IPFS network.

There are four differences between the storage market and the retrieval market: First, there is no time requirement for retrieval miners to store data, and there is no need to generate storage proofs. Second, any user in the network can provide data retrieval services to customers without staking FIL. Third, retrieval miners have high requirements for broadband bandwidth and need to make payments and data transmission quickly, while storage miners have high requirements for storage capacity. Fourth, storage miners can obtain block rewards, transaction fees and network acceleration fees, while retrieval miners can only obtain retrieval transaction fees.

Figure 6: Filecoin economic model, ipfs.cn

Filecoin Economic Model Deduction

Through the above analysis, we can see that the main difference between Filecoin and the Bitcoin network lies in the nature of the services provided: storage is a long-term service, so the Filecoin network requires miners to work stably for a long time to participate in mining to maintain the stability of the network, rather than the Bitcoin network, where miners can enter and exit freely. Therefore, Filecoin adopts a network benchmark reward model rather than a time exponential decay model. This makes it difficult for home storage hardware to meet the requirements for participating in Filecoin mining from the perspectives of operation and maintenance, security, and stability. In general, it is difficult to ensure 24-hour uninterrupted network and power outages in a home environment, and time-space proofs must be submitted in a timely manner, so the mining machines used for home mining will be falsified, and the threshold for miners is likely to be raised to a professional scale level.

Separately, the demand for Filecoin storage market mainly comes from the decentralized storage demand in the network, and the supply side is storage miners. Traditional centralized storage or cloud service operators such as Amazon or Google have significant scale and technical cost advantages compared to Filecoin. According to the market supply and demand theory, miners' quotations need to be lower than centralized storage to survive in the storage market . Therefore, it can be inferred that in the early days of the Filecoin network, the demand in the storage market will be dominated by small and medium-sized customers with high privacy sensitivity and high cost sensitivity. In the long run, storage quotations and the scale of storage market demand will show a certain inverse correlation. In other words, storage miners may appropriately lower their quotations to obtain more storage orders, thereby increasing the probability of obtaining block opportunities, and the source of income will ultimately be the rise in FIL's coin price.

In the real world, there will probably not be much real storage demand in the early days of Filecoin’s launch, so the income for early miners will mainly be block rewards, and most of the valid data stored by miners at this stage will be data that they have stored by themselves.

Filecoin encourages miners to contribute their hard drives to build a distributed storage network through block rewards. When there is sufficient storage space on the Filecoin network and the security and stability of the network reach a certain level, more and more institutions and individuals will begin to host their data on the Filecoin network's servers, and miners will begin to generate storage mining revenue.

In the early days, retrieval demand mainly came from blockchain users with valuable information needs. In the early days, the content stored in the IPFS network had not yet been scaled up, and the retrieval service had no advantages over the centralized network. As the IPFS storage market gradually scales up, more and more files are available for users to retrieve, and the importance and income of retrieval miners will gradually increase. The price of FIL has little impact on retrieval miners. The income of retrieval miners is only transaction fees, and does not include block rewards. The optimal strategy for retrieval miners is to become storage miners at the same time and appropriately lower the quotation to obtain more retrieval orders while improving network bandwidth utilization. In this case, retrieval miners can obtain data directly from the client.

When there is a certain amount of real data on the Filecoin network, there will be a demand for retrieval, and miners will have the benefits of retrieval mining. The benefits of these three parts are complementary. Only miner nodes that have a certain computing power advantage in the early stage will receive more storage orders. The more real storage orders there are, the more valid data stored in the storage miner's server, and the more retrieval rewards can be obtained in the later retrieval mining stage. From this development path, it is not difficult to see a development model similar to the sharing economy in the Internet.

Figure 7: Filecoin economic model, ipfs.cn

FIL miners' holding strategy and price analysis

According to statistics on the coin production of Filecoin investors, Protocol Labs, the Foundation, and miners, the total coin production is expected to be 34.11 million per month in the first 6 months, and the total production in the first year will be 365.13 million.

From a macro perspective, since all types of miners need to stake FIL to obtain block rewards, and FIL tokens are released linearly and gradually, the supply side is expected to grow slowly and the growth rate decreases exponentially. In the long run, if the demand for services on the demand side gradually increases, it means that all market participants must continue to purchase FIL.

From a micro perspective, the stability of storage and retrieval service prices is important to users, so the price of storage and retrieval transaction fees needs to be anchored to fiat currency or stablecoin, regardless of whether FIL rises or falls. When the price of FIL rises, customers will pay fewer FIL units of transaction fees and network acceleration fees, and the proportion of miner block rewards in revenue will increase. When the price of FIL falls, customers will pay higher FIL units of transaction fees and network acceleration fees, and the proportion of miner block rewards in revenue will decrease. Assuming that only service demand factors are considered, when the price of FIL rises, the rate at which customers purchase FIL in the secondary market will slow down, and when the price of FIL falls, the rate at which customers purchase FIL in the secondary market will increase, achieving the function of regulating the secondary market.

In general, the optimal strategy for miners is to hold FIL for a long time. In addition to the need to pledge FIL for mining, the increase in FIL price determines the miners' rate of return, because the transaction fees in the initial stage cannot cover the mining costs.

As a distributed storage network, Filecoin's core application scenarios are for commercial storage customers and miners' mining mortgages, but the former is bound to be difficult to meet the high expectations of the industry in the early stages of the network launch. In the case that the Filecoin storage network is not yet fully developed, large-scale enterprise commercial data storage will consume a lot of time and hardware resources, which means that it is not realistic for large-scale commercial use in the early stages of the mainnet launch.

Therefore, before the Filecoin network becomes truly mature and stable and there is a real influx of massive commercial storage demand, the FIL price will be mainly supported by miners who purchase coins for collateral and secondary market investors. The growth of miners and storage space as well as the investment speculation in the secondary market will largely determine the price trend of FIL.

IPFS Ecosystem Landscape

As a top-level project that went online in 2015 and completed huge financing in 2017, IPFS and Filecoin networks will finally enter a new chapter of mainnet launch this year. In the past few years, the blockchain and digital asset industry has developed and iterated a prosperous ecosystem around IPFS and Filecoin.

Figure 8: IPFS and Filecoin ecosystem, BlockVC industry research

In the upstream of the ecosystem, Protocol Labs and community developers continue to contribute to the development of the network. At the same time, many blockchain projects adopt IPFS as the storage infrastructure, laying the foundation for the large-scale use of IPFS. Since the design and manufacturing of mining machines are different from the dedicated mining machines currently used for Bitcoin mining, they do not require high-precision chip research and development. Therefore, the design and manufacturing threshold of Filecoin mining machines is relatively low. China has developed mid- and low-end manufacturing industries and extensive participation in the industry, which can be traced back to 2017 when Filecoin raised funds.

Before 2019, the so-called IPFS servers or Filecoin miners, although many products were equipped with server outerwear, actually had PC internal organs. The project officials also warned not to participate in the so-called mining machine purchases. Most of the mining machines at this stage eventually became sales scams. With the gradual open source of Filecoin code in 2019, the computing requirements were raised to the same or even more important level as storage, which led to the elimination of many previous "mining machines". At the end of 2019, after the news that Filecoin mining required GPUs was announced, the mining machines deployed for Filecoin were iterated again, and the hardware standards were raised all the way to 128GiB memory, multi-core CPUs, and an NVIDIA 2080Ti graphics card. With the test network finally launched this year, the cluster mining mode has become the mainstream, and many miners have completed the layout and entered the final stage of computing power preparation and network layer management debugging. It is understood that there are at least 200-300 domestic Filecoin mining machine sellers, and the sales of several leading manufacturers even exceed 1 billion.

In the past three years, many miners who bought various mining machines in advance have adopted the increasingly popular cloud computing mechanism in order to get their money back in advance. They have cooperated with sales channels with traffic terminals to disassemble the mining machine computing power in advance into cloud computing power and sell it to retail investors who cannot participate personally because the threshold is too high. Individual investors often choose to participate in the top mining pool clusters because Filecoin has an obvious Matthew effect in mining. From the test network data, it can be seen that the coin production efficiency of the top 5 mining pools is more than 4 times that of the 6th to 10th mining pools.

In the trading and circulation of FIL tokens, many exchanges have launched FIL futures tokens for open trading. Exchanges cooperate with FIL's public offering investors, using FIL's public offering shares as the underlying to attract investors to buy and trade FIL futures. Due to the huge popularity of Filecoin and the scale of funds deployed, exchanges are expected to support FIL after the mainnet is officially launched, and enter the Filecoin ecosystem from two perspectives: token trading and retail mining pools.

Figure 9: Filecoin Testnet Dashboard, testnet.filecoin

Conclusion

The development of IPFS and Filecoin in the past few years can be described as "half-covered, finally coming out after much anticipation". On the one hand, the storage characteristics of the IPFS network have long been recognized by the community and users to a considerable extent. IPFS has long become the only choice for the infrastructure of distributed storage in the blockchain world, and is continuing to develop with an upward momentum; on the other hand, with the huge fundraising background of Filecoin tokens, the market value of the entire project has reached 30 billion US dollars. The hardware standards and mining economic models have changed several times and there are still uncertainties and ambiguities. The production and sales of mining machines in the industry are mixed. Many high-imitation IPFS and Filecoin projects are dressed in the guise of "blockchain" and "distributed storage mining", shouting the slogan of "financial enlightenment", but they are actually fraudulent. As the saying goes, some people keep their feet on the ground, while others look up to the stars. I believe that in the near future, just like the wonderful name of IPFS Interstellar File System, IPFS and Filecoin can truly transform the storage ecology and contribute to the underlying protocol of the human Internet.

It is also important to note that the launch time of Filecoin's mainnet has been postponed several times, and Protocol Labs has not yet convinced the industry that the mainnet can be activated before the end of August. There are still many unclear mechanism issues surrounding Filecoin's mining economic model that need to be further clarified. Whether FIL's price performance and liquidity level can support a healthy storage market is still very uncertain. In the above context, users and investors interested in IPFS and Filecoin should still adopt a cautious and optimistic attitude, keep a close eye on the project's technology and ecological progress, and avoid falling into speculative frenzy.

References

1. "HashKey: Understanding the Economic Model and Miners' Economic Behavior of the Popular Project Filecoin", Hashkey Capital Research https://www.chainnews.com/articles/974219932958.htm

2. http://ipfs.cn/

3.IPFS White Paper, https://filecoin.io/filecoin.pdf

4.Filecoin Primer https://coinlist.co/assets/index/filecoin_index/Filecoin-Primer-c74e73db1d65598ca171397df9d219de6b7a7ef80a4886bb152c01883aea7e79.pdf

5.http://ipfs.cn/news/info-100886.html