Filecoin is a decentralized storage system that aims to “store humanity’s most important information”. The project was first described in 2014 as an incentive layer for the Interplanetary File System (IPFS), a peer-to-peer storage network. Filecoin is open-source, and its protocol is designed to provide a foundational layer to support decentralized applications development.
The core function of Filecoin is to provide a blockchain-based cooperative digital storage and data retrieval method. It’s achieved via a decentralized network of computer storage run by ‘miners’ who earn Filecoin cryptocurrency (FIL) by providing storage to clients.
On the flip side, clients pay miners in FIL to store or distribute data. As opposed to traditional cloud storage providers like Amazon S3, in Filecoin, the user has the choice to select any miner worldwide for storage based on the price and reputation instead of being locked into a centralized provider.
Like other blockchains, Filecoin also utilizes a cryptographic system to ensure the security and robustness of transactions and stored data. The integrity, location, and retrievability of the data stored in the network are verifiable without the need for trust in a central authority.
Filecoin’s primary innovations are believed to be in decentralized storage and the economic incentives layer that promotes good behavior among network participants. It aims to be a viable alternative to centralized data storage platforms.