Filecoin’s growing reputation for competitive pricing and above-average accountability in peer-to-peer file storage has made it a major competitor against the giants in online file storage such as Google Cloud and Amazon. The way Filecoin uses storage miners to store and confirm files means that the responsibility for Filecoin’s storage process is far more spread out than if the the data was on servers run by a single entity.
This allows Filecoin to facilitate an open market storage alternative that uses a blockchain and network of miners to store and retrieve files, dispersing the storage process over an open market rather than relying on a single company’s servers. This is built on top of the Interplanetary File System. Anyone can participate in the network, whether to store essential files or to make money as a miner.
The question is now whether Filecoin’s advances give it a practical competitive edge over Google and Amazon S3 when it comes to pricing, efficiency, availability, and reliable security. Read on to learn the processes that have given Filecoin the edge in the current market as well as how it competes in hard numbers with its largest competitors.
For Filecoin Users: A Brief Guide
Filecoin allows users to store data like any company-owned storage service. However, it also allows users to participate in the process by running a node, running checks on the system, and making money as part of that system. This means that network “usage” requires a little more explanation.
For normal users, Filecoin allows them to choose the storage method that works best for them and make a “deal” to store it for a certain amount of time, with other selectable priorities that change the storage method. We discuss in more detail how exactly to do this below.
Users can choose how they prefer to trade-off between the cost of their storage, upload and download speeds, and redundancy by choosing a miner that works for them.
By reviewing the blockchain ledgers, users can verify how their files are being stored at any time. This results in greater accountability when it comes to business-to-business saves, shared publication data, data backups, or a software system’s internal file storage.
Filecoin vs Amazon vs Google Cloud Storage
Naturally, this new system has put Filecoin in direct competition with centralized storage systems, most notably Google’s Cloud Storage and Amazon’s S3 Standard. Comparing its pricing and efficiency to these other systems requires calculated analysis, which we’ve simplified for you below using general Filecoin network performance data generated from miner performance activity.
Using this data to calculate the average cost of storing regularly through Filecoin, the average amount spent from each miner can be divided by the total bytes of data they stored. This comes to USD 0.0000642 per gigabyte, per month. By taking the same amount of data stored through the Amazon S3 – Infrequent Access tier, the results show USD 0.0134217728 per gigabyte per month. Dividing the relative costs of Filecoin storage by Amazon’s cost comes to 0.00388920307.
|Storage Costs per GiB||Filecoin||Amazon S3 – Infrequent Access Tier|
|Average cost per deal||$0.0025003981070059744||$0.05808087305|
This means that Filecoin data storage costs 0.38% of the cost of Amazon’s S3 – Infrequent Access per gigabyte per month.
What about compared to Google’s Cloud storage? The numbers calculate even further in Filecoin’s favor. Google Cloud’s storage prices, taking standard data storage of 60 TB as an example, comes out to USD 0.026 per gigabyte, twice as much as Amazon’s, which was already more than double that of Filecoin’s.
How Filecoin Provides Storage
Filecoin also allows individuals and companies to run a storage node, selling storage on the open market that Filecoin supports for storing information on decentralized servers.
Any online computer with enough free space can mine on the network, which then rewards its miners for contributing their storage. This frees Filecoin itself from wasting its time and resources on proof-of-work calculations that can be accomplished just as well by paid miners.
Storage providers don’t need to advertise their services, design an API, or do anything other than take advantage of Filecoin’s network protocols. This system of independent storage is more complicated than this, but for this article, just know that Filecoin has been able to create an organic, decentralized storage system by relying on miners operating independently on the blockchain.
How to Store Data on Filecoin
As an open-sourced and cloud-based storage network, decentralized to allow miners to verify the retrieval mechanism individually, clients can pay to store and receive data without the oversight of a central company. This also means that miners are somewhat on their own when it comes to participating in the network, sending and receiving tokenized rewards (or Filecoin tokens, “FIL”), and using cryptographic proofs to verify the network.
Examples of data that can be retrieved and stored include:
- Personal files and any private data
- dApp website and application data
- Company files
- Contract data
- Public datasets
- Video and website data
- Security archives
Assuming that you want to use the network in a non-developer capacity, Slate provides the easiest entry into Filecoin’s storage process. Other apps can work as well, including Lotus and Powergate, but for simplicity’s sake, we’ll use Slate as the example.
Slate represents Filecoin as a storage application designed to help users collaborate, research, and use the storage network. On slate.host, create an account and log in. You can find “Storage Deal” in the menu and click “Add file” to create a deal to store your files. At this point, Slate will output a unique content identifier (CID) for each file. You then have a few options to choose from.
You can customize your storage deal by changing aspects in the subsequent menu such as the duration of your deal, the maximum price you’re willing to spend on Filecoin, and the replication factor. You can also skip these values and use the defaults to get the basic deal that the average user would choose. You can also encrypt your storage from this menu.
Once you click “Make Storage Deal,” you’ll wait for the deal to be made. At that point, anyone with the data CIDs can view your files, you can customize permissions by adding or excluding certain miners, and you can receive notifications on your deal’s status.
A Note of Caution
It has been suggested that Filecoin cannot keep up with centralized storage methods due to the lack of viable RAM on a miner-led network compared to a company entity.
However, this plays far more into the long-term investment angle of the future of decentralized storage and whether a mining network can compete with a centralized one as networks become more expensive to finance. Filecoin is the more cost-efficient option for data storage right now according to the numbers available.
While many people expected Filecoin’s decentralized storage network prices to cap below Google and Amazon’s options, recent advances in network security and efficiency have taken its storage prices to new lows. Filecoin now represents an efficient storage system for companies and individuals that want to back up and share their data, as well as for miners who want to participate in the network and make money by providing storage.
While the far future of the Filecoin network remains an uncertain investment, the current status as a reliably cost-efficient storage alternative has allowed it to continue to grow and change, even in a post-pandemic economy.
Disclosures: Authors and/or editors of this blog own Filecoin cryptocurrency and hold this as an investment. This blog is not intended as investing advice and none of the gnomes behind this blog are investment advisors.