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What is Filecoin?

Filecoin (⨎) is an open-source, public cryptocurrency and digital payment system intended to be a blockchain-based cooperative digital storage and data retrieval method. It is made by Protocol Labs and builds on top of the InterPlanetary File System, allowing users to rent unused hard drive space.A blockchain mechanism is used to register the deals.

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Decentralized Storage System

According to Filecoin's authors, it is a decentralized storage system that aims to “store humanity’s most important information”.

Open Protocol

Filecoin is an 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.

Proofs

The Filecoin network is a distributed, peer-to-peer network formed by Filecoin peers who participate in different ways.

PoRep

Using Proof Of Replication (PoRep), storage providers demostrate publicly that a unique encoding of the data exists in physical storage.

PoSt

Over time, with Proof of Spacetime (PoSt), randomly selected miners provide proof that the data associated with a deal is still stored.

Contrary to the centralized storage methodology, Filecoin aims to store data in a decentralized manner, which is resistant to problems that occur in centralized storage. Due to Filecoin’s decentralized nature, it protects the integrity of data’s location making it easily retrievable and hard to censor. It also allows people on their network to be their own custodians of the data that they store. Additionally, Filecoin also rewards the network nodes that mine and store data on their blockchain network.