How to mine Filecoin (FIL)?
Do you already know the platform that allows users who own a computer to store files and get paid for them? If you have already read the post about Filecoin, you will know what I am talking about. If you haven’t yet, I’ll briefly summarize what Filecoin is, how its platform works, and how to mine its FIL tokens.
Created by Protocol Labs, Filecoin is a decentralized storage network that aims to turn cloud storage into an algorithmic marketplace. It is a very novel and valuable platform, as it allows its users to store files, turning their computer into a kind of database and making them earn tokens as a reward.
The FIlecoin network is inspired by Web3, an advanced software development architecture that eliminates centralization. Filecoin can also provide file storage services to other decentralized platforms and enables transaction interaction with other blockchain platforms promoting interoperability.
Filecoin is complemented by IPFS, a protocol for storing and sharing data on the distributed web. All Filecoin nodes are IPFS nodes and can connect to and obtain IPLD-formatted data from other IPFS nodes, using libp2p.
Both systems are free, open-source, and share many components. The Filecoin ecosystem is composed of 3 types of entities:
The Filecoin network operates on agreements between a customer and a miner for a storage ‘contract.’
When a client chooses a particular miner to store its files, basing the choice on its capacity, duration, and price, it blocks sufficient funds in an associated wallet to cover the total cost of the contract. Once the miner has accepted the deal, the storage agreement is published. The client then prepares the data for storage and transfers it to the miner. The miner, in turn, packs the data into a sector, seals it, and starts sending proofs to the chain.
Once the first confirmation has been received, the client is assured that the data has been stored correctly and the deal has officially begun. During the life of the agreement, the miner sends continuous proofs to the chain. If proof is missing or delayed, the miner is penalized. FIL is the native token of the Filecoin network, which is currently ranked #18 in market capitalization. How we have advanced FIL is the incentive that Filecoin network users pay for their data stored by the miners. The more they spend, the more levels of security their files will have. As a result, FIL is the reward miners earn for services rendered to the community.
The project raised $205 million in an initial coin offering (ICO) in 2017, although Filecoin’s main net launch date was delayed blocking 148,888, and occurred in mid-October 2020.
Il Filecoin token has a maximum supply of 2,000,000,000,000 FIL, and at the time of writing, there are 67,352,494 FIL tokens in circulation.
Filecoin platform mining works differently from the classic mining that characterizes Bitcoin and other cryptocurrencies.
First, the Filecoin network has two consensus mechanisms: Proof-of-Replication (PoRep) and Proof-of-Spacetime (PoSt).
In Filecoin, miners, instead of contributing computational power, contribute storage capacity to meet the needs of users/customers who want to store data. In other words, in the Filecoin ecosystem, miners work as “databases.”
**– Storage miners:** earn FIL token rewards by storing data for clients and computing cryptographic proofs to verify storage over time. Unlike Bitcoin miners, the probability of earning the per-block reward and transaction fees depends on the amount of storage these miners contribute to the Filecoin network, not hashing power.
**–Retrieval miners:** earn FIL tokens and mining fees for a particular file, depending on the market value and size of that file. Their bandwidth and initial bid/ask time for deals determine the total number of deals they can make.
**– Repair miners:** will be implemented in the future.
Each Filecoin miner has an associated power value on the network proportional to the amount of space contributed and determines the chances of earning the right to mine a block in each epoch.
In the Filecoin network, miners get different types of rewards for contributing to the network.
Storage fees are the fees customers pay after an agreement is reached in exchange for data storage and miners sending regular storage proofs to the chain. These fees are automatically deposited into a miner’s associated wallet as they perform their duties and are briefly blocked upon receipt.
Post (Proof-of-Spacetime) window checks are performed at 24-hour intervals across the network to ensure that miners continue to host their required sectors as usual. Each day that a miner is not idle, they will receive a fee for the failure committed.
By mining blocks, miners earn rewards and charge fees proportional to the storage space contributed to the network.
The mechanism for obtaining the right to mine a new block is called WinningPoSt.
Unlike storage fees, these rewards do not come from an associated customer. The network “prints” new FIL tokens as an inflationary measure and an incentive for miners moving up the chain.
In addition to the block reward, each miner can collect the fees associated with each message included in the block.
To incentivize data storage, storage miners also can compete for special offers provided by verified customers who need the miner to guarantee significant data storage.
Recovery fees are paid incrementally through the payment channels as recovery agreements are fulfilled.
Minors must pay these penalties if they do not provide reliability to the sector or decide to voluntarily leave the network. These include:
Consensus failure reduction is a penalty incurred by miners when they commit consensus failures and when they have acted maliciously against the consensus of the network.
To mine Filecoin, there are no minimum requirements although, following the guidelines on its official website, it is currently recommended that your computer has the following features:
Once you have a computer with these features, you will need to install the Filecoin network client, called Lotus, and you are ready to start storing data from other users and earn your FIL tokens.
If you already have your FIL tokens and need a wallet to store them in, I recommend a couple of FIL-compatible wallets:
Lotus: If you want to use the Lotus wallet, you will only need a Lotus node installed and running on your computer.
Ledger Nano: Another good option is to store your FIL in a hardware wallet such as Ledger Nano. This will give you the security that an online wallet cannot provide you when holding your cryptocurrencies.
Well, we have reached the end, and I hope you are now ready to prepare your equipment and start mining your FIL tokens. Good luck!
The Filecoin mainnet is here. Join today to make deals, store data, and earn FIL.
Storage Miners earn Filecoin by storing data for clients and computing cryptographic proofs to verify storage across time.
The probability of earning the block reward and transaction fees is proportional to the miner's amount of storage to the Filecoin network and not hashing power.
Like a hyper-local CDN, the retrieval market is for miners who have low-latency, high-bandwidth connections close to end-users. These well-placed miners earn Filecoin for providing files and data at the fastest speeds.
By mining on the Filecoin network, you help to decentralize and democratize the way data is stored on the web. By mining Filecoin, we take back control of our digital future.
Many parts of the globe still have poor connectivity to the web. Filecoin and IPFS allow you to provide data from anywhere globally, creating brand new economies that connect underserved regions and communities.
Filecoin miners store critically critical public data, such as open access scientific data, historical archives, creative commons media, the public record, and more.
_Filecoin relies on practical storage to secure the network, unlikely many other blockchains which use wasteful proof-of-work. This makes Filecoin one of the first-ever environmentally friendly blockchains._
From small mining rigs to advanced data-center operations, Filecoin has a vibrant mining community of dedicated entrepreneurs and businesses helping each other make their operations more efficient, reliable, and profitable.
By mining on the Filecoin network, you help to decentralize and democratize the way data is stored on the web. By mining filecoin, we take back control of our digital future.
Many parts of the globe still have poor connectivity to the web. Filecoin and IPFS allow you to provide data from anywhere globally, creating brand new economies that connect underserved regions and communities.
Filecoin miners store critically critical public data, such as open access scientific data, historical archives, creative commons media, the public record, and more.
Filecoin relies on practical storage to secure the network, unlikely many other blockchains which use wasteful proof-of-work. This makes Filecoin one of the first-ever environmentally friendly blockchains.
From small mining rigs to advanced data-center operations, Filecoin has a vibrant mining community of dedicated entrepreneurs and businesses helping each other make their operations more efficient, reliable, and profitable.
This service allows users to store software and content in a super high-performance computer (data center) connected to the Internet and use the software whenever necessary. Users can conveniently use various content such as documents, music, and videos through Smartphones and PCs.
The computer hardware on which the server program is running is called a server and is also referred to as a computer program that provides services to other programs. Servers monitor and control entire networks such as printer control and file management and share software resources such as data, programs, and files, or hardware resources such as modems, fax and printer sharing, and other equipment. A server serves at the request of a user (client). Such configured systems are referred to as a client/server system, which refers to a distributed processing format in which one or more applications operate in a collaborative environment. In other words, the client/server system provides the desired results through collaboration with the client requesting the service and the server processing the clients' request.
IPFS (the InterPlanetary File System) is a new hypermedia distribution protocol, addressed by content and identities. IPFS enables the creation of completely distributed applications. It aims to make the web faster, safer, and more open. IPFS is a distributed file system that seeks to connect all computing devices with the same system of files. In some ways, this is similar to the original aims of the Web, but IPFS is actually more similar to a single bit torrent swarm exchanging git objects. You can read more about its origins in the paper IPFS - Content Addressed, Versioned, P2P File System.
**What is Filecoin (FIL)? A Complete Guide**
There exist many blockchain-based decentralized cloud storage projects in the market. Storj, Holo, Datum, and Siacoin are some examples of these projects. They are all cloud-based, which means they provide services at fixed prices and speed.
Filecoin is disrupting online storage services by providing peer-to-peer (P2P) services, just like the file-sharing services of Bit Torrent. So let’s take a brief look at Filecoin.
Storing data online is very useful in this computerized era, but a great deal of security is required to make the stored data safe from hacking or leaking.
Facebook-Cambridge Analytica data scandal in 2018, where Cambridge Analytica harvested the personal data of millions of people’s Facebook profiles without their consent and used it for political advertising purposes, and numerous other smaller data breaches exposed the weaknesses of centralized storage.
Furthermore, the costs of centralized storage are high, and the data transmission speed is low. The ultimate answer to these problems is decentralized storage. When it comes to decentralization, blockchain technology offers the best solution.
Filecoin is a blockchain-based P2P storage service, developed by California-based Protocol Labs and FIL is the native cryptocurrency of the Filecoin network. The project was funded in 2014. Filecoin’s ICO was one of the most discussed events in the crypto world in 2017 when it raised $205 million in a 2017 token sale, which was the most raised ICO in at that time.
Filecoin launched its Mainnet in October 2020 and began the token distribution on October 19. With this, Filecoin became the fastest newly live blockchain to reach a figure of US$1 billion in market cap.
Unlike other cloud storage platforms, Filecoin offers a marketplace for users to set their own prices for uploading and hosting data and allows users to customize their orders by being able to prioritize speed, redundancy, and cost.
Filecoin is supported by the Interplanetary File System (IPFS) which is a protocol for distributed file storage. Filecoin blockchain uses a combination of Proof-of-Storage (PoS) and Proof-of-Replication (PoRep) consensus mechanisms to allow any data form to be stored in physically independent storage.
Filecoin protocol anyone in the world to rent out spare storage space on their computer. By allowing anyone in the world to join the network, it can create a huge source of data storage. During the Testnet phase, the network data capacity increased by more than 320 pebibytes. To put in perspective, this is seven times the entire written works of mankind, in all languages.
In Filecoin, miners are the heart of the network. However, mining in Filecoin works quite differently. Instead of contributing computational power, miners contribute storage capacity to be used in deals with clients looking to store data.
Three types of miners exist on Filecoin Network: Storage Miners, Retrieval Miners, repair Miners.
They are responsible for storing files and data on the network. They earn Filecoin by storing data for clients, and computing cryptographic proofs to verify storage across time.
Storage contracts between miners and clients on the Filecoin network are made through agreements called Deals. Once a user decides on a miner to store with based on their available capacity, duration, and desired price, they lock up a sufficient amount of Filecoin native token FIL in an associated wallet to cover the total cost of the deal. Once done, the deal is published on the network showing that the storage miner has accepted the storage agreement.
The client then transfers the data to the miner which packs the data into a sector, seals it, and begins submitting proofs to the chain. Throughout the lifetime of the deal, the miner submits ongoing proofs to the chain. Each time a miner submits the proof, funds locked by clients are released to miners. If proof is missing or delayed, the miner’s reward is slashed.
Each miner in the Filecoin network has an associated power value that is determined the storage space that he contributed to the network. The more space they contribute, the more chances they have to win the right to mine a block in every epoch. By mining blocks, miners obtain block rewards and collect fees for the messages included in that block.
Saving your documents on someone else’s computer is risky. So, Filecoin splits up data and stores each piece of data in different locations. This means the host cannot simply hack the document on their computer and gain access to the user’s files.
To retrieve files from the network, retrieval miners are used. They can be called veins of the network. Filecoin documentation explains retrieval miners as:
“They earn Filecoin by winning bids and mining fees for a particular file, which are determined by the market value of said file’s size. A retrieval miner’s bandwidth and bid/initial response time for deals (i.e., latency and proximity to clients) will determine its ability to close retrieval deals on the network. The maximum bandwidth of a retrieval miner will set the total quantity of deals it can make.”
Users can leverage three software solutions to store data on Filecoin.
Slate: This allows users to upload and store data on the Filecoin network directly from their browser. But, according to Filecoin, it only supports one-time deals.
Lotus: It is full-featured client software capable of performing storage and retrieval deals on the Filecoin Network. To use this, users should have to install this software and keep it running in the background.
Starling: Starling is a decentralized storage application that is used where the authenticity of a file over time is of paramount importance.
Filecoin also allows developers to build game-changing applications on Filecoin. It offers Power gate, Textile Buckets, Glif-nodes, and Lotus solutions to start integrating with the Filecoin network.
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