Filecoin

Filecoin is a decentralized storage network where anyone with spare disk capacity can offer it to the market, and anyone who needs storage can buy it from that market rather than from a single cloud provider. It was built by Protocol Labs, the team behind IPFS, and launched its mainnet in October 2020 after one of the largest token sales of its era.

The economic idea is to turn storage into a commodity by separating raw disk space from the services usually bundled with it. Price is set by supply and demand across a global pool of providers, and providers compete on reliability and reputation as well as on price.

Proofs and consensus

What makes the network work is cryptographic proof that data is actually being stored. Storage providers submit proof of replication, showing they have stored a unique copy of a client's data, and proof of spacetime, showing they continue to store it over the agreed period. Providers must put up FIL as collateral, which is slashed if they fail to produce proofs, so failing to keep data costs real money.

Consensus is expected consensus, which weights a provider's chance of producing a block by the amount of verified storage they contribute to the network, tying block production directly to useful work rather than to raw computation.

Supply and the FVM

FIL has no hard maximum supply in current data, with total supply at roughly 1.96 billion and circulating supply around 819 million. Emission is tied to network growth, with a portion of rewards released as storage capacity increases.

The Filecoin Virtual Machine, added in 2023, brought smart contract capability to the network, enabling programmable storage deals and decentralized finance built around storage collateral.