A blockchain-based campaign, which is expected to start next month, is intended to do nothing less than decentralize and disrupt the highly concentrated cloud storage market.
The Filecoin network is being advertised as a bypass of established cloud storage providers and their business model, which bundles relatively cheap, scalable data storage with expensive and proprietary software, application interfaces, servers and other infrastructure. “This means that storage buyers cannot access storage directly and efficiently, but have to pay for a variety of additional services and functions,” claim proponents of the “Filecoin Economy”.
As the amount of data stored approaches hundreds of zettabytes, current Web 2.0 storage platforms continue to generate huge profits. Estimates of the size of the cloud storage market range from $ 46 billion to $ 96 billion when infrastructure, platform, and hosted private cloud services are included.
According to the Synergy Research Group, Amazon Web Services, Microsoft Azure and Google Cloud together with the Chinese cloud giants Alibaba and Tencent account for around two thirds of the global cloud storage market.
Filecoin is the brainchild of Protocol Labs, a San Francisco-based network company with branded funders like Andreessen Horowitz and Sequoia Capital. Filecoin, structured as a unit of Protocol Labs, has raised more than $ 258 million in risk funding, according to the Crunchbase.com website.
Filecoin’s disruptive mission is to use blockchain technology to negotiate users directly with crypto token miners. The blockchain framework enables consumers to identify and review local storage facilities and negotiate prices through social media.
The decentralized model faces the current approach, where user data is hosted and stored in regional data centers, usually at fixed rates.
Filecoin is being prepared for launch next month as a blockchain protocol known as the “mainnet”. This means it goes into production and cryptocurrency transactions are sent over the network, verified, and recorded in a distributed ledger. Basically, the decentralized network aims to eliminate the “middle man”, in this case large public cloud providers.
The Web 2.0 business model has driven the company’s shift towards multi-cloud deployments as companies try to avoid supplier loyalty. Filecoin would take this strategy a decisive step further with the creation of a decentralized storage network. Ahead of the mainnet launch, Filecoin said this week that its protocol would support storage sectors up to 64GB for up to 18 months.
Blockchain storage is based on unused space that is spread around the world. So far, Filecoin has attracted more than 300 “miners” who need to provide storage resources to participate in the blockchain-based economy. These network participants on six continents currently have more than 31 petabytes of storage space.
The “Filecoin Economy” combines hard drives, algorithms, data centers, processors, software and other resources that are converted into traded storage services.
Storage agreements between customers and Filecoin miners could “be proposed through digital spaces like Twitter or email – especially for storing large amounts of data,” Filecoin said in a “Crypto-Economics” report released this week.
“Many third party vendors operating on this platform can improve the deal proposal and matching process, including participating in exchanges or creating novel aggregators of deal bids and requests,” he added.
While preparing to deploy the blockchain protocol in production, reports have surfaced of tension between the parent company’s protocol labs and their investors. According to an Axios report, a “revolt” among stock investors is seeking a larger portion of the compensation in the form of Filecoin tokens. Filecoin generated token sales of more than $ 200 million as part of a 2017 offer.
The dispute has reportedly delayed Filecon’s rollout. To restore momentum, the network released a report this week outlining its value proposition and highlighting open, “verifiable” storage options. “The distribution of the memory enables local optimization,” the report says. This refers to storing big data closer to users rather than relying on large regional data centers.
“The Filecoin Economy should communicate information more efficiently and the network should be more responsive than centralized storage platforms,” she added.
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About the author: George Leopold
George Leopold has been writing about science and technology with a focus on electronics and aerospace engineering for more than 30 years. He was previously editor-in-chief of the Electronic Engineering Times. Leopold is the author of “Calculated Risk: The Supersonic Life and Times of Gus Grissom” (Purdue University Press, 2016).
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