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Filecoin token (FIL) is the native digital token offered by Filecoin, a peer-to-peer, decentralized network for file storage that aims to “store humanity’s most important information.”
The token is offered as an economic incentive to ensure the reliability of file storage.
The project was first described back in 2014 as an incentive layer for the Interplanetary File System (IPFS), a peer-to-peer storage network where users pay for data storage and distribution services in FIL. Filecoin and IFPS were developed by Juan Benet and his team at Protocol Labs.
The project’s initial coin offering (ICO) began on August 10, 2017. The Filecoin mainnet officially went live on October 15, 2020.
Filecoin was built on top of the decentralized file sharing network InterPlanetary File System (IPFS), and brought the economic incentive system and marketplace functionality to IPFS. Unlike the traditional data storage providers, it implements a publicly verifiable, trustless storage product that doesn’t rely on a single entity. Filecoin is open protocol and backed by a blockchain that records commitments made by the network’s participants, with transactions made using FIL, the blockchain’s native currency. Unlike proof-of-work (PoW) blockchains like Bitcoin, Filecoin ensures its data is verifiably stored through proof-of-replication (PoRep) and proof-of-spacetime (PoSt). Under PoRep, storage miners create a proof by showing that they have stored a unique copy of the data on their system, at the time when the data sector was sealed. PoRep only validates a proof once, making it a less intensive validation process compared to PoW. Once PoRep is established, PoSt runs repeatedly to prove that the space being used by the storage provider has the user’s data. Storage miners are required to put up some collateral to enter the Filecoin ecosystem. The PoSt algorithm will penalize the miners if they fail to prove the continued storage of the data, ensuring good behavior from the participants.
