The IPFS Protocol That Could Revolutionize the Internet, and the FileCoin that Came Along

2021-05-26, 07:16

Before learning about the IPFS, let's get to know the widely-used Internet protocol

The Internet is made up of a very large number of computers connected around the world, and communication between computers requires a common language, the protocol. When we need to find a specific file, we will first find the URL where the file is located. After DNS resolution, we can download the file from the computer’s IP address where the file is stored, which is achieved through the HTTP protocol (HyperText Transfer Protocol).

However, the HTTP protocol sends the content in cleartext. It does not provide any way of data encryption. In the process, the data is easy to be eavesdropped or tampered with, easy to cause security problems and therefore has been phased out. The Internet has gradually transitioned from HTTP protocol to HTTPS protocol (Hypertext Transfer Protocol Secure), which encrypts data packets through SSL or TLS and requires the webserver to provide authentication, thus ensuring data confidentiality

Image source: authenticredcreative

Despite that, these two protocols are still flawed. HTTPS is not absolutely secure. Organizations with root certificates and encryption algorithms can still eavesdrop or tamper with data. At the same time, both protocols require central server processing, which takes up too much resource with low access efficiency. Once the visitor traffic is huge, the page will load more slowly, or even crash the central server. In order to keep the smooth functioning of central servers, some earlier files are easily deleted. This is part of the reason why web pages are prone to 404 errors (pages cannot be found).

Origin of IPFS Protocol

In order to solve the above problems of centralization, inefficiency, and historical file retention of HTTP and HTTPS protocols, in April 2014, Protocol Lab (Protocol Lab) officially released the InterPlanetary File System. It’s also called IPFS protocol, which aims to improve or even replace the traditional HTTP and HTTPS protocols.

Image source: IPFS.org

Features of the IPFS Protocol

1.Easy to access with content location: Normally, we need to go through the central server to process data when we are looking for files. In that case, access efficiency is low, and the central server is prone to collapse when there are too many visits. IPFS, however, uses content addressing to assign a unique encrypted hash value to each file. The relevant hash information is stored through a blockchain running on IPFS. When the network needs to access it, it only needs to look up the corresponding hash information on this chain.

2.Distributed storage to save resources: Each node in the IPFS protocol is both a client and a server. When downloading data, users can simultaneously download from their nearest nodes, avoiding network congestion caused by a large number of visits to the central server.

3.Decentralization to ensure secure data: The IPFS protocol will "fragment" and decentralize data storage. Therefore, when a large number of access requests are encountered, such as a DDoS attack, all accesses will be decentralized to different nodes, or even to the attacker itself. This decentralization allows IPFS to avoid the crash of traditional centralized servers.

4.Permanent preservation of historical data: When a 404 error is encountered, i.e. a page cannot be found, it may be caused by data being deleted on the server or by the server being shut down. In IPFS, as long as one of the nodes has viewed a specific data, the data in it will be stored. Since this data is shared and used by the whole network, it is possible to avoid the problem of inaccessibility caused by the deletion of data in one of the nodes.

Use of IPFS Protocol

The capabilities of IPFS are no longer a pipe dream. There are more and more technical teams using IPFS protocols in the underlying Internet technologies, social media, encryption technologies, and so on. One of the most well-known is the open-source crypto coin and digital payment system that provides data storage and retrieval, namely FileCoin.

Image source: Filecoin.io

The IPFS incentive program led to the creation of FileCoin

Although IPFS has more advantages than the traditional HTTP/HTTPS protocol, the nodes must be online all the time or have enough storage space to ensure that all users can access and read the data. Not so many users are willing to accept a requirement like this. To motivate them to use the IPFS protocol, FileCoin (FIL) was created. FileCoin, like the IPFS protocol, was created by the Protocol Lab to better promote the IPFS network.

Access to and Use of FileCoin

When a node participant in the IPFS protocol needs to be able to prove that it has stored the relevant data correctly and has submitted the proof of storage to the network via a new block. The network then verifies that this part of the data has been stored correctly and securely. Only the correct blocks are accepted and saved. As the process continues over time, participants in the nodes receive transaction storage fees and have the opportunity to earn block rewards.

Miners in the FileCoin system are divided into retrieval miners and storage miners. If a user using the IPFS protocol needs to find a file, he initiates a download request to the system and pays a certain amount of FileCoin tokens. The retrieval miner will find the data in all node participants on behalf of the user and send it back to the client. He will also be paid a portion of the tokens for helping the user with the retrieval. The node participant who correctly provides proof of stored data, i.e. the storage miner, will be rewarded with FileCoin tokens for correctly storing the relevant data.

Image source: Filecoin.io

The Road to FileCoin and IPFS Mainnet

In 2017, FileCoin completed an ICO worth $257 million. It was the highest value of any ICO project at the time. However, FileCoin's plan to launch its mainnet in 2018 was delayed over and over again. Two years later, in June 2020, it was officially announced that the mainnet would be launched in July. However, on July 15th that year, the plan was postponed to August-September, 2020. Finally, FileCoin was officially launched in October 2020, with the price rising from $22 to $130 at one point. And within just 12 hours, the price dropped back down to near $44. As of press time, the FIL token is quoted at $73.

Despite many delays, the domestic mining market and the mining machine market are much sought-after by the insiders. A growing number of miners are starting to join FileCoin's mining. They hope to accumulate a large number of tokens as early as possible through early participation in mining so that they can sell them out when the mainnet goes online. However, as FileCoin officials gradually increase the standards for mining hardware, the price of mining machines has also risen. FileCoin itself is an IPFS token based on decentralized storage technology. Much to the insiders’ surprise, mining has now become a contest in the mining machines. The prices of the mining machines now range from 30,000 to 200,000 CNY.

The Value of FileCoin and IPFS in the Future? Only Time Will Tell

IPFS and FileCoin are complementary to each other. If IPFS wants to replace the traditional HTTP/HTTPS protocol and revolutionize the Internet, it will take some time. Therefore, we cannot give FileCoin an early conclusion based on the current crypto market heat.

At present, the Internet is still in rapid development. New technology such as 5G, artificial intelligence, and the Internet of Things are mushrooming. The birth of these new technologies also means the increased demand for data storage, retrieval, and verification. How to store large amounts of data while ensuring data security and efficiency has become a new requirement for the development of storage technology.

As far as the current market situation is concerned, IPFS and FileCoin have the upper hand in the distributed storage arena. The birth of FileCoin may better promote the application of IPFS in the real-world and change the data storage industry.

Gate.io has opened FIL's coin trading and contract trading. You may trade in USDT, BTC or ETH:

FIL/USDT coin trading: https://www.gate.io/en/trade/FIL_USDT
FIL/BTC coin trading: https://www.gate.io/en/trade/FIL_BTC
FIL/ETH coin trading: https://www.gate.io/en/trade/FIL_ETH

By Gazer.C, Gate.io Researcher
*This article represents the views of the researcher only and does not constitute any investment advice.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

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