Participate in Filecoin mining, eight things you need to know

Since Filecoin became the No.1 1CO in 2017, its concept of decentralized blockchain distributed storage has attracted widespread attention. It is no surprise that it has attracted worldwide attention. It is rumored that a mining tycoon hoarded hard drives worth 20 million US dollars in 2017.

However, Filecoin has been given the impression of "ten thousand years of delay". From the rumor that it would be launched in June 2018, it is already 2020. Too many "wolf cries" have exhausted the enthusiasm of most investors.

Recently, the Filecoin testnet has once again stimulated the market. Is this so-called "the hottest project in 2020" really "crying wolf"?

This article analyzes from several angles and provides a detailed explanation of the current test network. We take a fair and objective perspective so that most users will no longer be confused.

Recently, the official blog updated the latest roadmap https://filecoin.io/blog/testnet-phase-2-update/ The official set goals and milestones for each testnet stage.

Filecoin’s latest route is as follows:

1. Testnet Phase 1: December 11, 2019 - February 21, 2020 (currently in reset testing)

2. Testnet Phase 2: February 24 to April 24, 2020

3. Mainnet launch window: April 27 to May 29, 2020

As can be seen above, the time window for the launch of the Filecoin mainnet is around May, and there are still 3 months left, and it is close to the launch stage. If you want to participate in Filecoin-related mining investments, you should also plan and prepare now, because the hardware requires a mass production cycle, which is generally around 20 to 60 days.

The Filecoin testnet is currently running on a Filecoin implementation lotus, and the network itself is agnostic to the specific implementation. In the coming months, several implementations, including go-filecoin (currently there are four sets of fuhon, forest, go-filecoin, lotus), will be able to interoperate on the Filecoin testnet.

At present, our test network is based on lotus. The reason why the official has implemented four implementation plans is mainly based on security considerations (considering the difficulty, progress and controllability of the project, the official has chosen to implement multiple solutions in parallel.)

Important note: The Filecoin protocol is not yet 100% stable and complete, so the testnet is not a stable network.

The purpose of the test network is to allow us to discover and fix bugs. Since the launch of the test network, it has been attacked many times, such as memory overflow vulnerabilities, null pointer attacks, etc. The official is also quickly correcting the problems based on the online problems. The test network has been reset many times, and the software version number has been upgraded to version 0.2.7 as of the date of publication.

With the repair of various problems, the main network has become relatively stable. In addition, a professional security audit company will conduct a security audit before the main network goes online, so there is no need to worry about security risks. If there is a super security problem, the main network can also be hard forked. ETH has experienced several major forks.

These security loopholes will be gradually resolved before going online. If it is just mining, then more issues should be addressed in terms of mining pool security/asset security, etc.

Regarding the GPU threshold issue, Filecoin mining is based on storage capacity consensus: having more power (proven storage) on the network is directly related to winning more block rewards.

The amount of power a miner uses on the network is related to the amount of storage the miner places on the network, rather than simply the number of GPUs stacked. In contrast, in proof-of-work GPU mining, miners must compete with the power of their GPUs to win block rewards.

In Filecoin mining, miners compete on storage power consensus rather than GPU power. Miners use GPUs in ElectionPoSt only when they win election tickets. The best and cheapest way to win power is to add more useful storage to the Filecoin network.

We should view Filecoin more as a decentralized PoW, but it has consensus-trusted storage capabilities and Newton's third law, which must be abandoned if we want to move forward.

Filecoin will probably go through three stages.

1. Consensus phase, similar to Bitcoin with PoW

2. Evolutionary stage: Like Ethereum, it gradually evolves to ETH 2.0, and the peripheral ecosystems of various programming components gradually mature and performance gradually improves

3. In the implementation stage, because of the rich IPFS ecosystem, Filecoin has the soil for implementation, and various decentralized storages have begun to flourish.

The Filecoin testnet is open to the public. Anyone with hardware and software skills can participate. However, it requires a very deep understanding of hardware, software, and network, and the ability to perform in-depth optimization at all levels. It requires a software and hardware team, and a series of professional operation and maintenance work in the later stage. It is completely different from Bitcoin mining.

We replaced the CPU/GPU and network equipment several times in this test to achieve a better state, which is also a considerable investment for ordinary users.

For details, please refer to:

(Link address: https://docs.lotu.sh)

About hardware: During the first phase of the testnet, the official website removed the 1GB sector test and currently only supports 32GB sectors. In order to accelerate zero-knowledge proofs, an additional GPU is required, with a minimum of N card 1060 and a minimum memory of 128G. Such a high configuration undoubtedly blocks many miners from participating. Most miners on the market are unable to mine, and the desire to use home computers will also be frustrated. However, we do not rule out that the official final optimization plan will reduce demand. The official will launch Filecoin hardware spces before the mainnet goes online.

Regarding test rewards: Filecoin officials once said in Slack that there will be certain rewards for miners who contribute more to the network, and the formal reward rules will be announced before the mainnet goes online.

The test network does not send real FIL at present. FIL tokens are all applied for and cannot be exchanged for main network coins for the time being. (No FIL tokens have been released yet, and FIL on all trading platforms are futures trading symbols)

Filecoin is a "valid storage proof". The more data there is, the greater the computing power is, and the higher the ranking will be in the main network. During the test network stage, the official omitted some intermediate data transaction steps for the convenience of testing. Miners need to brush random data themselves to increase the "computing power", which is the so-called "brushing".

Why do we pursue computing power? In the early days of the Filecoin mainnet, on the one hand, the main chain needs strong computing power to ensure the security of the entire network. On the other hand, the storage of "commercial data" takes time, and it is obviously not enough to rely solely on storage income. Therefore, we can only improve the efficiency of block explosion by increasing computing power and win block rewards. This is a bit like Bitcoin/Ethereum. The more mining machines, the greater the computing power, and the more you dig. Therefore, many manufacturers have been competing for rankings recently, more to show their strength, of course, the cost is high.

Recently, the so-called "cluster" solution has been circulating in the market. In fact, Lotus officials have considered the separation of storage and packaging at the beginning of the design. This can solve the problem of concurrent packaging pressure. The official guidance document provides that how to deploy the "cluster" solution is not an exclusive technology. The understanding of each company will be very different, and there will be many differences in the architecture. Whoever has a better cluster efficiency will eventually be reflected in the mining efficiency.

(Screenshot source: https://docs.lotu.sh/en+lotus-seal-worker)

Filecoin's mining pool concept: Currently, Filecoin does not have the concept of a distributed mining pool in a physical location, because one role can only create one miner. The problem with this design is that the mining pool/mine is essentially inseparable.

We know that any Pow mining coin has the concept of a mining pool. As the computing power continues to increase, the probability of an individual exploding a block will become infinitely small, so everyone pools their computing power together to mine, and then the income is distributed according to each person's computing power. The design of the mining pool is essentially the existence of an equal wealth card.

Currently, Filecoin does not have the concept of retail investors. If you want to mine blocks, you must improve your computing power. The threshold for the first phase of the test network is 512G. If it is lower than 512G, there is no chance of mining blocks. This means that in the early stage of mining, there must be giants or consortiums.

Several stages of Filecoin mining pool work

The first stage is the first mining stage, the goal is to occupy the fastest computing power, and the things to do at this stage are asset stacking, software optimization, and order speed.

The second stage is after mining has reached a stable period. This stage is mainly in a maintenance state. In addition to a good external mining environment, such as an IDC environment, it also requires professional software engineering to prevent data loss. It also requires hardware monitoring and automated operation and maintenance to prevent data loss in a certain period of time and to ensure no punishment.

Of course, these two phases are implemented simultaneously, and much of the work in the second phase needs to be completed in the first phase, especially the distributed storage solution for data.

Several aspects need to be noted:

1. Once the selection is determined, you will be faced with different technical paths and you must act within your capabilities.

2. Once the plan is wrong, it may seriously lead to the loss of the entire computing power. If all are punished, it will affect the investment.

3. In addition, we need to design a mining pool solution with built-in redundancy and elastic hardware and software, so that when any of the CPU/GPU/mining machine/hard disk fails, it will not affect the operation of the entire mining pool, and it can be replaced and supplemented at any time.

Three directions of Filecoin ecosystem investment

1. Hold FIL and wait for appreciation. Those who missed ICO can only wait for the secondary market to buy and sell

2. Mining, smoothing the income model (the first batch of people to get the tokens)

3. Develop Dapp and peripheral ecosystem

Some logics for the future appreciation of FIL tokens

1. IPFS/Filecoin has attracted widespread attention and there is a high degree of consensus, which is the basis of its value.

2. 70% of the total amount is entirely generated by miners. The FIL participating in 1C0 is unlocked in batches, with the longest lock-up period being 36 months and the shortest being 6 months.

3. Due to the mortgage mechanism and the demand from a large number of miners participating in the test, FIL may be scarce in the early stage of the mainnet launch.

4. IPFS/Filecoin ecological applications continue to grow, and direct data storage and indirect ecological applications have brought about a surge in demand for the use of FIL.

How to get the highest return on investment

The operation of the Filecoin system requires extremely strong operation and maintenance capabilities, and requires the management of dozens or even hundreds of machines working together. There are two roles in Filecoin, one is a storage mining machine, and the other is a packaging mining machine. The storage server is responsible for block consensus proof, data storage, and receiving tasks, and the packaging server is responsible for completing the replication proof and the "packaging" task of data. This involves several aspects of work, and the process is more complicated than that of Bitcoin. There are several differences.

Filecoin has a super complex process and logic, and comes with a penalty mechanism. If it is not properly regulated, miners will be punished accordingly, such as power failure, shutdown, and loss of hard disk computing power. If you want to achieve a high return on investment, you must pay attention to several directions: hardware, order brushing, and software solutions.

Filecoin is a new type of mining project. When investing in Filecoin mining, what we miners should pursue is the output per unit input and the effective storage growth rate per unit computing power.

A great work needs a great theme. As the leading project in the decentralized storage track, Filecoin has an insurmountable position. Mining alone is no longer like the early days of BTC, and the threshold for Filecoin mining has reached very high requirements. We are facing opportunities and challenges. As Kevin Kelly said: "These forces are not destiny, but trajectory. They do not provide predictions about where we will go, but only tell us which direction we will move in in the near future, inevitably.