Filecoin is a decentralized storage system designed to "store humanity’s most important information." The project garnered significant attention by raising $205 million during its initial coin offering (ICO) in 2017, initially targeting a launch in mid-2019. However, the launch of the Filecoin mainnet was delayed until block 148,888, anticipated to occur in mid-October 2020. Originally conceptualized in 2014, Filecoin serves 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 using $FIL. Filecoin operates as an open protocol, supported by a blockchain that documents the commitments of network participants, with transactions conducted in FIL, the blockchain's native currency. The architecture of this blockchain relies on proof-of-replication and proof-of-spacetime. Being open-source and decentralized, Filecoin governance is entirely community-driven. The platform provides developers the capability to build cloud file storage services akin to Dropbox or iCloud. Filecoin welcomes anyone to join its network, allowing users to either store their data or earn money by offering storage space to others. The architects of Filecoin chose to implement their unique blockchain technology and token with an independent consensus mechanism to operate the network. $FIL functions as the native currency essential to the Filecoin network, facilitating all network operations and transactions. Clients execute transactions using FIL tokens, while miners use FIL as collateral to ensure their service reliability. According to the developers, Filecoin addresses issues associated with inefficient file storage and retrieval. Customers can benefit from an effective array of tools and the foundational IPFS for solutions tailored to their storage needs.

Filecoin was established by Juan Benet, the creator of the Interplanetary File System. Benet is an American computer scientist and a Stanford University alumnus. After founding Protocol Labs in May 2014, Benet participated in Y Combinator during the summer of 2014, aiming to support IPFS, Filecoin, and other projects.

Filecoin is designed to facilitate the decentralized storage of data. In contrast to centralized cloud storage providers such as Amazon Web Services or Cloudflare, which are vulnerable to centralization issues, Filecoin utilizes its decentralized framework to secure the integrity of data locations, ensuring data is easily retrievable and difficult to censor. By employing a decentralized storage system like Filecoin, individuals can maintain direct control over their data while also enhancing global access to the web. Participation in the Filecoin network through mining and data storage is directly correlated with earning additional block rewards, thereby incentivizing participants to act with integrity and maximize data storage.

The Filecoin system comprises three key participants: clients, storage miners, and retrieval miners. These groups engage in direct interactions, facilitating transactions, exchanging information, and conducting micropayments with the cryptocurrency $FIL. Clients are responsible for paying to store or retrieve data. They initiate this process by placing an order in the online storage market, leading to a deal with storage miners. Storage miners, in turn, are tasked with storing the client's data and are rewarded for their services. They manage files by placing them in vacant sectors of a hard drive, with all transactions being recorded on the blockchain, subsequently providing clients with private keys. Retrieval miners are responsible for extracting data upon a client's request. Clients engage in trade within the off-chain Retrieval Market. Notably, retrieval miners can also function as storage miners. Filecoin operates using the InterPlanetary File System (IPFS), with all data maintained on a peer-to-peer blockchain. The process begins with users selecting miners to store their personal data and compensating them with FIL tokens. Consequently, miners carry out trades and receive participation fees alongside FIL rewards. The more storage offered by miners, the greater their chance of receiving rewards. Clients have the ability to check how their data is stored during a transaction, as evidence is permanently recorded on the blockchain. The Filecoin network implements the Proof-of-Replication (PoRep) model, while miners utilize the Proof-of-Spacetime (PoSt) protocol. Thus, to securely store data on the Filecoin network, clients are required to compensate miners. The cost is determined by the open market and is influenced by several factors. Within the open market, hyper-competition exists among miners, each proposing their minimal pricing for storage.

Protocol Labs characterizes Filecoin's tokenomics, or economic model, as a "market for data" in which users can offer their storage space to other users seeking to rent. Five stakeholders have the opportunity to trade tokens: developers, clients, miners, token holders, and ecosystem partners. Protocol Labs also identifies three Filecoin markets: file storage, file retrieval, and on-exchange token trading. In the fall of 2020, 400 miners participated in the "Space Race" testnet phase, which significantly increased Filecoin's network data capacity by over 325 pebibytes. Approximately 3.5 million FIL tokens will be distributed to the Space Race participants.

Filecoin is safeguarded through a combination of proof-of-replication and proof-of-spacetime mechanisms. Within the Filecoin network, nodes, also referred to as retrieval miners, compete to deliver data to clients as swiftly as possible. Successful miners receive FIL fees as compensation, which fosters a robust network of nodes dedicated to replicating and preserving files. Storage miner nodes continuously vie for contracts to provide clients with storage for a predefined duration. Upon reaching an agreement, a storage miner retains the client's data in a sector and "seals" it, creating a unique replica of that sector’s data. Clients compensate storage miners with FIL as deal fees, and these miners also have the opportunity to mine blocks and earn a block reward.

In anticipation of the Filecoin mainnet launch, Gemini and Kraken have announced their support for FIL. Huobi plans to list FIL following the activation of the mainnet. For more details on purchasing cryptocurrencies, refer to Eulerpool's comprehensive guide.

Firstly, the establishment of a large, free market dedicated to data storage has led to a reduction in service costs. This market is increasingly accessible to all, resulting in lower prices for network usage. As of September 2022, the network has connected over 20,000 users and computers globally, fostering a vast community with aligned goals and needs. Additionally, Filecoin leverages existing resources rather than developing new technologies and devices, allowing miners from any location worldwide to participate in the network. Lastly, Filecoin operates as a decentralized network with unique methods for safeguarding information and preventing single-point attacks.