Filecoin Value Proposition

I am trying to find out the value proposition of Filecoin. I appreciate any feedback.

  1. Is data in Filecoin undeletable/immutable? To what degree? For how long?
  2. What will be the actual price per TB/month? What happens if a user stops paying?
  3. Is the user the only one able to access it?
  4. Would data persist if the Filecoin’s team disappeared from the face of Earth?
  5. If demand for storage increases, do nodes also increase organically? How is the price set?
  6. What are the main disadvantages compared to centralized storage providers?

Thank you! :slight_smile:

Hi @Codonyat,

These are great questions! Thanks for asking them.

1. Is data in Filecoin undeletable/immutable? To what degree? For how long?

Filecoin is about incentivizing data storage and then continuously verifying that the data is being stored over time. Storage clients enter into deals with storage miners for a specified duration, capacity and price.

To some end-users having to specify a duration in a storage deal may seem unusual at first, but Filecoin is a core protocol. On top of the protocol, end-user-facing app developers and service providers are expected to build user experiences that regular end users are more accustomed to.

2. What will be the actual price per TB/month?

The market will decide but the expectation is that Filecoin storage is more competitive in price and more robust as a decentralized infrastructure than centralized cloud storage providers. There is a significant amount of latent (available) storage throughout the world that sits unused and Filecoin creates a healthier storage market by removing barriers to entry so that anyone can monetize their extra space and start a cloud data service.

Over time, the network will improve and there will be faster retrieval miners that act as CDNs and repair miners that foster a self-healing network in addition to storage miners. These will further provide a more efficient alternative to a centralized cloud.

What happens if a user stops paying?

In the protocol (apps and service providers may choose to manage this differently) funds for storage deals are locked in a smart contract (called Actors in Filecoin) on the blockchain and paid out over time to the storage miner. Or piece by piece in a payment channel to a retrieval miner.

  • A service provider could build a subscription model that runs on top of the protocol and manage user payments how they see fit.
  • In the future organizations and providers will also be able to pay for storage on behalf of their users using smart contracts or
  • future user-defined smart contracts can enable automated subscriptions and programmable storage

So we expect to see a robust market of options for users.

3. Is the user the only one able to access it?

If a data CID (content identifier) and the miner that is storing the data are known, anyone can pay to retrieve that data CID because this data is on chain. The user can choose to encrypt this data. Large blocks are data are split into pieces.

Filecoin focuses on a core protocol of incentivized and verified storage. We expect to see developers build an ecosystem of tools including encryption and redundancy services on top that end users will want to use. In comparison to AWS, you could build and AWS-like service on top of Filecoin. Filecoin aims to be cheaper, decentralized and incentivize a more robust global infrastructure for storage.

4. Would data persist if the Filecoin’s team disappeared from the face of Earth?

Yes, because similar to Bitcoin, the incentives will persist and Filecoin is an open protocol and open source. Anyone can join and contribute to the ecosystem of Filecoin software and after launch there will be a protocol improvement process and governance that will belong to the open Filecoin community. Filecoin is not owned by any one company.

5. If demand for storage increases, do nodes also increase organically? How is the price set?

If demand increases faster than storage, the market may see a fluctuation in price, but that will in turn incentivize more storage miners to join the network. The expectation is that Filecoin will achieve a very high storage capacity and become extremely competitive with other cloud providers. Stable coins are also possible in the future for users who want to see stable storage pricing.

6. What are the main disadvantages compared to centralized storage providers?

This blog post talks about some challenges and how they may be overcome:

Usability is often cited as a big challenge in decentralized systems but we expect to see the ecosystem evolve to provide amazing product experiences and a thriving community of developers, services and exciting business models. Because incentives are built-in to the Filecoin protocol this is a decentralized network that is likely to have amazing uptime and an ecosystem of open services it will be a more robust infrastructure for the Internet than cloud providers who lock in their customers and extract a premium.