Filecoin, a decentralized storage network that turns cloud storage into an algorithmic market, is built on Ethereum. Filecoin raised over $257 million in an ICO in 2017 and is currently the most valuable decentralized application (dApp) built on Ethereum, with a market capitalization of over $1 billion.
While Filecoin and Ethereum share a common vision of a decentralized future, their approaches to achieving this vision are quite different. Filecoin is focused on building a decentralized storage network, while Ethereum is focused on building a decentralized computer.
The Filecoin protocol incentivizes miners to store user data and reward them for their service with Filecoin tokens. Miners can also earn rewards for providing computational power to the network to help it run smoothly.
The Filecoin network is powered by the InterPlanetary File System (IPFS), which is a peer-to-peer hypermedia protocol designed to make the web faster, safer, and more open. IPFS connects all computers in the world and allows them to share information without relying on central servers.
The Ethereum blockchain is used to track who owns what Filecoins and where they are stored. Every time a user stores data on the Filecoin network, they must specify which miner they are storing it with.
The Ethereum blockchain then records this information and updates the balances of the relevant addresses accordingly.
The key difference between Filecoin and Ethereum is that while Ethereum is trying to build a decentralized computer, Filecoin is trying to build a decentralized storage network. Both projects are ambitious and have the potential to change the way we interact with the internet.