23 April 2021

Filecoin

The internet as we know it is slow, vulnerable and inefficient. Nearly all of the existing web uses what is called Hypertext Transfer Protocol - or HTTP - to transfer data between web servers and your computer. The protocol works by downloading files from a single computer at a time - a process that much resembles the centralized systems that cryptocurrency and blockchain are seeking to disrupt. 

If that fragile, lone HTTP link between your computer and the server is disrupted, the entire transfer breaks - requiring you to reload the page or file over again. Most often this is caused by a poor connection, but this centralized connection also poses a vulnerability for censorship. It’s possible a user’s internet experience maybe filtered through methods such as data packet filtering and IP blacklisting. Protocol Labs, an open-source research, development, and deployment laboratory, is seeking to solve these issues by creating a new data transfer protocol for the internet: The Interplanetary File System (IPFS). 

IPFS seeks to reshape the internet itself by implementing a distributed data sharing system on a peer-to-peer basis. It makes censorship and DDoS attacks impossible, and creates public archives of all content. Data that would typically be stored on centralized servers are distributed across a network of storage nodes, making it possible to access internet content with spotty internet service - or even offline! Distributing the access points for websites would reduce or eliminate downtime, and would make censorship nearly impossible. 

As if a permanent and uncensorable Internet weren’t incentive enough, Protocol Labs has created an incentive structure to accelerate its adoption. This comes in the form of a native token called Filecoin (FIL), making the switch from HTTP to IPFS even more alluring. Specifically, FIL tokens are used to incentivize storage nodes - the backbone of the entire protocol. Essentially, Filecoin creates a marketplace for long-term storage, allowing nodes to rent their extra storage space to other users and earn a passive income in the process. By making IPFS participation profitable, FIL provides longevity to the protocol. 

We are living in the age of decentralization. It started just over ten years ago with the invention of Bitcoin, which went on to revolutionize the way we think about money and value. Then Ethereum was created, allowing the automation of code-based contracts that create new applications. DAO’s distributed governance abilities - for protocols now, and possibly nations in the future. NFT’s are changing the way we think about gaming, art, music, and media rights. The next step is the final boss: the internet itself. With IPFS, the internet will become what it was always supposed to be: a truly decentralized, fast, peer to peer network of information. 

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