Why is Filecoin lying on the ground?
DePIN - This is one of the key narratives in the Web3 space right now. But more importantly, why is DePIN important?
Why should you care about DePIN?
The DePIN space provides a unique opportunity for the crypto industry to scale its real-world services globally. Unlike DeFi or NFTs, DePIN aggregates and resells decentralized storage, bandwidth, and computing power resources around the world. This not only drives capital inflows, but also enhances the importance of the crypto economy by directly impacting people's lives. DePIN provides a more meaningful path for capital and user onboarding, driving real-world utility and use cases.
Why does decentralized storage play a pivotal role?
Decentralized storage provides the necessary infrastructure for DePIN to enable global aggregation and resale of resources such as storage, bandwidth, and computing power.
With 3,000 providers and a utilization rate of 20%, the Filecoin network is seeing an increasing demand for decentralized storage. Its EB-scale capacity allows for easy addition of data, facilitating growth.
Decentralized Storage vs. Centralized Storage - What's the Difference?
Decentralized storage protocols like Filecoin go beyond security and consistency to enable programmability through smart contracts. With cryptographic verifiability, users can accurately track the number of replicas and trigger actions when necessary, such as setting incentives for additional storage. This programmability unlocks possibilities ranging from automating data pipelines to establishing data preservation pension funds, and is backed by verifiable proofs, making decentralized storage essential to persistent systems.
How does Filecoin work?
Filecoin uses commodity hardware from data centers for decentralized storage, combining proof of work and proof of state. Providers perform tasks such as proof of replication and proof of spacetime on hard drives, ensuring data integrity and adding a layer of security by requiring physical resources from attackers. In addition, Filecoin incentivizes hardware procurement through L1 incentives, scalable to exabytes of storage. Its security and token economics enable it to compete with traditional cloud providers, with the long-term goal of reaching YO-level capacity.
