Filecoin (FIL) is a decentralized protocol designed as a cloud storage network run by its community members, not by a single controlling entity. Protocol Labs developed the system, and its mainnet went live in October of 2020.

In practice, Filecoin lets users lease unused storage capacity to others, or allows users to purchase storage services through the network. Anyone can participate, which can expand the pool of available storage data worldwide. 

What are FIL key features and how does it work?

Filecoin functions by breaking up data and distributing it across multiple computers. Participants who want to store data provide a set of storage choices, and these storage providers-called miners-compete based on price and speed. The client then picks the miner they prefer and sends the data to be stored.

The protocol strengthens centralized storage alternatives in multiple ways. First, it relies on resources that already exist and can connect millions of computers globally. This can lessen the pressure to build new storage hardware while supporting a storage network that can scale.

Second, because Filecoin creates a broader marketplace for data storage, storage costs could, in theory, move downward-making cloud storage more affordable than it is today.

Third, the network’s decentralized design and the fact that data is stored across several machines means there’s a limited likelihood of compromise. A host can’t simply alter or access documents on their own computer to view a user’s files. By contrast, centralized platforms like DropBox and iCloud have been exposed to hacks.

How can Filecoin be mined?

Miners may earn block rewards and also collect the fees tied to messages included in the blocks they produce.

There are several approaches to mining on Filecoin, which leads to multiple miner categories within the network. These include storage miners, retrieval miners, and repair miners.

Storage miners form the foundation of the network by storing data and producing proof of storage. The likelihood of receiving block rewards and transaction fees depends on the volume of storage contributed, not on hashing power.

Retrieval miners focus on pulling files back when requested. Filecoin is earned through bidding and mining the fees related to a particular file. Their bandwidth and initial response time influence their chances of winning retrieval deals and earning block rewards. The number of retrieval deals a miner can complete is tied to its maximum bandwidth.

Repair miners have not yet been put into operation on the network.

Additionally, miners need to submit storage proofs on a regular basis to the chain. This is how they can earn storage fees paid by clients who have arranged deals with them. 

Where can you buy FIL?

The FIL token is available on multiple well-known exchange platforms. 

Currently, some of the most liquid options include Coinbase, Huobi Global, and Binance; it is also traded on exchanges such as OKEx, Bitforex, and DigiFinex.