Filecoin is a blockchain-based decentralized storage network for data where users earn crypto rewards for hosting data. Whereas traditional cloud storage runs on central servers run by private companies, Filecoin uses a decentralised network of computers that anyone can join in order to earn Filecoin (FIL).
This article will tell you about the dynamics of Filecoin in more detail and instruct you on how to buy Filecoin.
The easiest way to buy Filecoin is to purchase it online from a crypto exchange. Exchanges make it easy to buy and sell Filecoin and other cryptocurrencies directly from your smartphone, tablet or computer. Check out our recommended platforms below and follow the steps to safely buy Filecoin.
The first thing you’ll have to do to set up a crypto account is to pick a platform that is secure, easy to use, and charges low transaction fees. We recommend you choose from one of the trusted platforms listed below.
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Create an account by filling out your details and uploading your driving license or passport to verify your identity. After this, you can make a fiat deposit to your account using payment methods such as bank transfer, Mastercard, Visa, and PayPal.
After this, you’ll be able to buy Filecoin by looking for it in the search bar of your chosen platform. You will need to buy Filecoin using your local currency; if you are a US-based user, for example, select the FIL/USD trading pair.
Filecoin is a digital decentralized cloud storage marketplace that lets anyone rent out or buy file storage space with the use of its native cryptocurrency, FIL. It decentralises data by splitting and storing it across independent computer users or “nodes” spread around the world. It was founded by Juan Benet and his company Protocol Labs
Filecoin aims to disrupt online file storage by acting as a cheap alternative to cloud storage providers like Amazon and DropBox which can dictate unfair fees and terms because of their dominance in the sector.
Because Filecoin is a decentralised platform for cloud storage, it also looks to address the excessive centralisation of storage found in the sector. Decentralisation also means that data breaches and privacy leaks experienced among global companies are far less likely to occur on the Filecoin network.
The FIL token powers the economic incentives on the Filecoin network. Users are able to pay FIL to have their data hosted, and anyone with spare storage space on their computer or server can rent it out to earn FIL.
Users will pay storage miners to upload data while paying retrieval minors to retrieve it.
There are a number of ways through which you can invest in Filecoin. You should base your investment strategy on your financial position and ask yourself whether you’re looking to see potential returns in the short-term or hold out for larger gains in the long term.
Buy and hold Filecoin
Buying and holding on to Filecoin is the most popular strategy among investors because it allows you to accumulate profits in the long term, and is a relatively risk-free approach compared to trading FIL.
Best Filecoin wallets
You can either store your Filecoin in a web crypto wallet provided by your preferred crypto exchanges or platforms or take self-custody by using private software wallets or trusted hardware wallets like Trezor, BitBox, and Ledger.
Filecoin recommends storing your FIL in web wallets like Lotus, Gilf, and Filfox that can be linked to physical wallets like Ledger.
Rather than holding on to their FIL for the long-term, some investors choose to trade their coins by speculating on the volatility of Filecoin. This method requires more time, effort, and skill than simply buying and holding, but can generate more frequent profits.
Web wallets integrated with crypto exchanges are potentially more convenient locations to store FIL for traders because regularly transferring tokens in and out of private wallets can be a painstaking task and may incur unwanted charges on crypto transactions.
Before buying Filecoin, it is worth considering the potential risks and benefits tied to your investment. While it is possible that you may see long-term profits through your investment, it is equally possible that you may see losses in the short term.
Unlike the centralised data storage space, decentralised and free storage marketplaces like Filecoin are hyper-competitive and offer users the fairest prices — creating more demand for their services. As the service is paid for using FIL, this could in turn force up the Filecoin price.
Filecoin has also overshadowed its competitors in the decentralised storage space since it launched its mainnet in 2020 because of the mammoth funding it has received from its investors. This means Filecoin has more revenue at its disposal to make upgrades to its platform that may, in turn, lead to a rise in the project’s value.
Eventually, Filecoin aims not just to store user data but plans to become a storage layer for all Web3 data found on blockchains like Ethereum. If Filecoin does move toward this goal and become a central piece of Web3 infrastructure, it is possible that the worth of its native FIL token will rise with it.
Cloud computing refers to services offered by IT companies (storage providers) to users that involve things like online file storage and other data through central servers located in different parts of the world. Filecoin disrupts this new but now traditional space by offering decentralized cloud storage, which allows people to host files across a network of computers not owned by one person or company.
Decentralised data storage is a more democratic method to store data that moves away from the services provided by large private and centralised companies like Amazon or Apple, by allowing you to store data across multiple hosts.
Juan Benet started s a company called Protocol labs in 2014. This company was also the one that went on to develop Filecoin to create . Benet also developed the Interplanetary File System or IPFS which is a peer to peer network for sharing and storing data. The Interplanetary File System has become a crucial part of NFTs (non-fungible tokens)