{"id":37795,"date":"2022-09-22T18:09:00","date_gmt":"2022-09-22T15:09:00","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=37795"},"modified":"2025-08-29T21:40:39","modified_gmt":"2025-08-29T18:40:39","slug":"filecoin-fil-how-the-decentralised-storage-blockchain-works","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/filecoin-fil-how-the-decentralised-storage-blockchain-works\/","title":{"rendered":"Filecoin (FIL): how the decentralised storage blockchain works"},"content":{"rendered":"<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Key points<\/h2>\n<ul class=\"wp-block-list\">\n<li>Filecoin is a blockchain platform focused on decentralised data storage, with built-in economic incentives for users. It is one of Web3\u2019s core infrastructure projects.<\/li>\n<li>Filecoin was created by Protocol Labs, which also developed the IPFS protocol for distributed file storage and launched the popular token-sale platform CoinList.<\/li>\n<li>The security and verification of data stored on Filecoin are ensured by two consensus mechanisms: Proof of Spacetime (PoSt) and Proof of Replication (PoRep). Miners are responsible for storing and serving data.<\/li>\n<li>FIL, the network\u2019s native cryptocurrency, underpins incentives for storage and other participants.<\/li>\n<\/ul>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">History<\/h2>\n<p>The foundations of Filecoin were laid in 2014 by California-based Protocol Labs with the <a href=\"https:\/\/filecoin.io\/filecoin-jul-2014.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">publication<\/a> of a first-version concept based on <a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-proof-of-work-pow-algorithm\">Proof-of-Work<\/a>.<\/p>\n<p>The next stage, from 2014 to 2017, saw Protocol Labs build and expand the InterPlanetary File System (IPFS), a decentralised network protocol. IPFS is a more capable analogue of torrent networks for file storage and distribution.<\/p>\n<p>IPFS was created by Protocol Labs\u2019 head, Juan Benet. It can be used in place of HTTP and HTTPS. All file addresses in IPFS storage start with the prefix <em>ipfs:\/\/<\/em>.<\/p>\n<p>One of the first crypto projects to integrate IPFS was OpenBazaar in 2016. It grew into a decentralised marketplace but ultimately shut down in 2021.<\/p>\n<p>In 2017 the Filecoin team raised $257m via an ICO. The token sale was conducted on CoinList, developed by Protocol Labs together with AngelList, and followed the SAFT legal framework.<\/p>\n<p>The mainnet of the decentralised data-storage platform Filecoin was <a href=\"https:\/\/forklog.com\/en\/news\/filecoin-mainnet-goes-live\">launched<\/a> in October 2020.<\/p>\n<p>In February 2022 it emerged that the investment firm Tiger Global Management was backing crypto projects, including Filecoin.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Architecture and features<\/h2>\n<p>Filecoin is a decentralised counterpart to popular cloud-storage services such as Amazon Web Services or Alibaba Cloud. It builds on IPFS and adds economic incentives.<\/p>\n<p>Anyone can use Filecoin by paying to store files on the network; conversely, anyone can contribute storage hardware and earn rewards in FIL.<\/p>\n<p>How Filecoin works:<\/p>\n<ol class=\"wp-block-list\">\n<li>A user who needs to store data pays a fee to upload it to Filecoin\u2019s decentralised storage.<\/li>\n<li>A suitable storage provider (miner) commits in the Filecoin blockchain to store the dataset under an <a href=\"https:\/\/ru.wikipedia.org\/wiki\/%D0%A1%D0%BE%D0%B3%D0%BB%D0%B0%D1%88%D0%B5%D0%BD%D0%B8%D0%B5_%D0%BE%D0%B1_%D1%83%D1%80%D0%BE%D0%B2%D0%BD%D0%B5_%D1%83%D1%81%D0%BB%D1%83%D0%B3\" target=\"_blank\" rel=\"noreferrer noopener\">service-level agreement<\/a>.<\/li>\n<li>The protocol continuously verifies the integrity and parameters of the stored data.<\/li>\n<li>A dedicated retrieval provider serves data requests for a fee set on the <a href=\"https:\/\/spec.filecoin.io\/systems\/filecoin_markets\/retrieval_market\/\" target=\"_blank\" rel=\"noreferrer noopener\">open market<\/a>.<\/li>\n<\/ol>\n<p>Beyond storage payments, miners earn block rewards, which depend on the storage capacity they provide. More than 4,000 active miners operate on Filecoin today. The current reward per block is about 20 FIL.<\/p>\n<p>In addition to IPFS, Filecoin uses the modular networking stack <a href=\"https:\/\/libp2p.io\/\" target=\"_blank\" rel=\"noreferrer noopener\">libp2p<\/a>, data models based on <a href=\"https:\/\/ipld.io\/\" target=\"_blank\" rel=\"noreferrer noopener\">IPLD<\/a>, the <a href=\"https:\/\/multiformats.io\/\" target=\"_blank\" rel=\"noreferrer noopener\">Multiformats<\/a> protocol suite for flexibility and interoperability, and the educational resource <a href=\"https:\/\/proto.school\/\" target=\"_blank\" rel=\"noreferrer noopener\">ProtoSchool<\/a>.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Performance and total storage capacity<\/h2>\n<p>Blocks on Filecoin are generated roughly every 30 seconds, or about 120 per hour. Developers consider this sufficient for FIL transfers between users.<\/p>\n<p>Forming a deal between a client and a storage provider takes 1\u20132 minutes; transferring a 32GB file takes around 90 minutes.<\/p>\n<p>According to the <a href=\"https:\/\/filfox.info\/en\" target=\"_blank\" rel=\"noreferrer noopener\">Filfox block explorer<\/a>, as of 22 September 2022 the network\u2019s total storage capacity was 18.56 exbibytes\u2014around 20.75m terabytes.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Consensus<\/h2>\n<p>A key feature of Filecoin is its use of two algorithms to reach consensus across two distinct processes in the network.<\/p>\n<h3 class=\"wp-block-heading\">Data replication<\/h3>\n<p>This is governed by <a href=\"https:\/\/filecoin.io\/proof-of-replication.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">Proof-of-Replication (PoRep)<\/a>. PoRep proves that storage providers have received and properly encoded the files submitted for storage. This proof is provided at the start and end of a storage deal.<\/p>\n<h3 class=\"wp-block-heading\">Ongoing storage<\/h3>\n<p>This process is secured by Proof of Spacetime (PoSt), which proves that the \u201ckeeper\u201d of the information continues to store the data associated with the deal.<\/p>\n<p>Both algorithms use zk-SNARK technology for compression and encryption of transmitted information.<\/p>\n<p>Consensus in Filecoin is arranged so that the validity of both proofs is checked in every new block, ensuring the required level of data security.<br \/>Filecoin is a modular project with multiple components.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">What FIL is used for<\/h2>\n<p>FIL, Filecoin\u2019s native coin, is the unit of account for on-chain operations. It also incentivises storage providers and miners who produce blocks and record transactions on the Filecoin blockchain.<\/p>\n<p>FIL works similarly to Ethereum, where all operations and messages are paid in gas. Inspired by Ethereum\u2019s <a href=\"https:\/\/github.com\/ethereum\/EIPs\/blob\/master\/EIPS\/eip-1559.md\" target=\"_blank\" rel=\"noreferrer noopener\">EIP-1559<\/a> burn mechanism, the team <a href=\"https:\/\/docs.filecoin.io\/about-filecoin\/how-filecoin-works\/\" target=\"_blank\" rel=\"noreferrer noopener\">implemented<\/a> a similar approach to compensate for network resources. When the network is congested, gas limits rise to speed up transactions; when activity falls, gas limits decline.<\/p>\n<p>Filecoin has not ignored DeFi and Web3, issuing <a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-wrapped-token\">a wrapped version<\/a> to extend its ecosystem to other blockchains. Such tokens have been <a href=\"https:\/\/docs.filecoin.io\/about-filecoin\/wrapped-filecoin\/\" target=\"_blank\" rel=\"noreferrer noopener\">issued<\/a> on Ethereum, BNB Chain, Fantom, Polygon, Avalanche, Solana, Arbitrum and Celo.<\/p>\n<p>The platform\u2019s investment appeal has been recognised by Grayscale Investments, which included FIL among its products\u2014FIL <a href=\"https:\/\/forklog.com\/en\/news\/what-is-grayscale-investments\">was included among<\/a> Grayscale\u2019s investment vehicles. Another regulated FIL-based product, Filecoin Asset Use Swap (FAUS), is managed by DARMA Capital.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Competitors<\/h2>\n<p>The global data-storage market is evolving rapidly. Alongside centralised cloud providers (Amazon, Google, Dropbox, DigitalOcean and others), decentralised solutions have emerged in recent years\u2014Filecoin among them.<\/p>\n<h3 class=\"wp-block-heading\">BitTorrent<\/h3>\n<p>The company behind one of the world\u2019s most popular file-sharing and storage protocols was sold in mid-2018 to Justin Sun, founder of the Tron (TRX) blockchain. In 2019 the project held an ICO, raising $7.2m, and subsequently introduced BTT token incentives for users who seed files.<\/p>\n<h3 class=\"wp-block-heading\">Arweave<\/h3>\n<p><a href=\"https:\/\/www.arweave.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">Arweave<\/a> bills itself as a collective hard drive with an immutable history, allowing users to store not only files and information but also applications. By preserving history, it prevents others from rewriting it. The Arweave blockchain has backing from major venture investors including Multicoin Capital, Coinbase Ventures and Andreessen Horowitz.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">NFT Storage service<\/h2>\n<p>One of the most successful applications of IPFS and Filecoin has been NFTs, where the project helps solve the problem of reliably storing digital-object metadata.<\/p>\n<p>In 2021 the Filecoin developers launched NFT Storage, a free decentralised storage service for NFT metadata. The solution is based on IPFS and Filecoin, with access via a regular browser. Any NFT holder <a href=\"https:\/\/nft.storage\/docs\/how-to\/nftup\/\" target=\"_blank\" rel=\"noreferrer noopener\">can<\/a> use the platform.<\/p>\n<p>According to <a href=\"https:\/\/nft.storage\/stats\/\" target=\"_blank\" rel=\"noreferrer noopener\">official statistics<\/a> as of late September 2022, NFT Storage held about 92m NFTs, with a total dataset around 258GB. According to <a href=\"https:\/\/twitter.com\/pooja_eth\/status\/1455969115269734401?s=20\" target=\"_blank\" rel=\"noreferrer noopener\">Pooja Shah<\/a>, head of product at Protocol Labs, major users include the NFT marketplace OpenSea, applications in the Flow ecosystem and <a href=\"https:\/\/forklog.com\/en\/news\/what-is-hedera-hashgraph-hbar\">Hedera<\/a>. Filecoin also stores data from other popular networks, including Ethereum, <a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-near-protocol-blockchain-and-cryptocurrency\">Near Protocol<\/a> and <a href=\"https:\/\/forklog.com\/en\/news\/what-is-polygon-matic\">Polygon<\/a>.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Ecosystem development<\/h2>\n<p>Beyond NFTs, Filecoin is used to store and archive datasets, metaverse and blockchain-game assets, scientific research, and audio- and video-focused projects. As of late July 2021 the ecosystem included Revolut, Travala, Opera, Infura, Cloudflare, Stanford University and <a href=\"https:\/\/ecosystem.filecoin.io\/\" target=\"_blank\" rel=\"noreferrer noopener\">dozens of other organisations<\/a> that use Filecoin to some extent.<\/p>\n<figure class=\"wp-block-image size-large is-resized\"><a href=\"https:\/\/github.com\/filecoin-project\/community\/discussions\/194\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/filecoin-fl-1-1024x576.png\" alt=\"\u0411\u043b\u043e\u043a\u0447\u0435\u0439\u043d \u0438 \u043a\u0440\u0438\u043f\u0442\u043e\u0432\u0430\u043b\u044e\u0442\u0430 Filecoin (FIL): \u0447\u0442\u043e \u044d\u0442\u043e \u0438 \u043a\u0430\u043a \u0440\u0430\u0431\u043e\u0442\u0430\u0435\u0442\" class=\"wp-image-185657\" width=\"820\" height=\"461\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/filecoin-fl-1-1024x576.png 1024w, https:\/\/forklog.com\/wp-content\/uploads\/filecoin-fl-1-300x169.png 300w, https:\/\/forklog.com\/wp-content\/uploads\/filecoin-fl-1-768x432.png 768w\" sizes=\"auto, (max-width: 820px) 100vw, 820px\" \/><\/a><figcaption>Visualisation of the Filecoin ecosystem in July 2021. Source: <a href=\"https:\/\/github.com\/filecoin-project\/community\/discussions\/194\" target=\"_blank\" rel=\"noreferrer noopener\">GitHub<\/a><\/figcaption><\/figure>\n<p>Examples include:<\/p>\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/audius.co\/\" target=\"_blank\" rel=\"noreferrer noopener\">Audius<\/a> \u2014 a music-streaming application that uses IPFS;<\/li>\n<li><a href=\"https:\/\/huddle01.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Huddle01<\/a> \u2014 a Web3 video-conferencing platform;<\/li>\n<li><a href=\"https:\/\/archive.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">Internet Archive<\/a> \u2014 an archive of websites, web pages and files;<\/li>\n<li><a href=\"https:\/\/www.lighthouse.storage\/\" target=\"_blank\" rel=\"noreferrer noopener\">Lighthouse<\/a> \u2014 an application for fast uploads to a decentralised IPFS cloud.<\/li>\n<\/ul>\n<p>Institutional interest has been accompanied by technological initiatives. In May 2022 the Filecoin Foundation and Lockheed Martin announced a programme to deploy the InterPlanetary File System (IPFS) in space.<\/p>\n<p>Collaboration with other crypto projects is also noteworthy. For example, the Electric Coin Company (ECC), which develops ZCash, together with Protocol Labs, the Filecoin Foundation and the Ethereum Foundation, is working to improve scalability and privacy across their ecosystems.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Further reading<\/h2>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-ethereum-virtual-machine-evm\">What is the Ethereum Virtual Machine (EVM)?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-merkle-tree\">What is a Merkle tree?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-blockchain-oracle\">What is a blockchain oracle?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-helium-hnt\">What is Helium (HNT)?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-metaverse\">What is the metaverse?<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>What sets the Filecoin blockchain apart? How did it build a decentralised cloud storage network? Which applications run on Filecoin? Answers in cards.<\/p>\n","protected":false},"author":1,"featured_media":37796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"1","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[2113],"tags":[2117,2114,1826,1488,1418],"class_list":["post-37795","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptorium","tag-101-altcoins","tag-101-decentralization","tag-data-storage","tag-filecoin-fil","tag-ipfs"],"aioseo_notices":[],"amp_enabled":true,"views":"125","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=37795"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37795\/revisions"}],"predecessor-version":[{"id":37797,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37795\/revisions\/37797"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/37796"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=37795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=37795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=37795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}