Filecoin: Paving the way for a new era of data economy?
Before delving into modern web3-type decentralized storage, it's essential to have a brief overview of the evolution of storage solution types. We categorize data storage into three primary types: 1) On-premises storage; 2) Centralized cloud storage (CCS); and 3) Decentralized cloud storage (DCS). In the past, users primarily stored data on their own hardware, often maintaining it at the same physical location, such as a company's onsite data server. However, the emergence of cloud storage providers, driven by network effects, introduced a more cost-effective and sometimes more secure way to store data, leading consumers and companies to adopt cloud storage services, popularly known today as the "big three" (Google Cloud, Amazon AWS, and Microsoft Azure).
Using both on-premises and CCS solutions meant entrusting sensitive data to a single entity, which raised concerns about data ownership, censorship resistance, data breaches, and monopolistic market-driven high costs.
Enter Filecoin, a decentralized, peer-to-peer storage network built on top of IPFS. IPFS enables content-addressed storage, a method that assigns a unique cryptographic hash to each piece of data, serving as a fingerprint for the file. Filecoin functions as an incentive layer, enabling users to contract services for data within an open market. Moreover, the Filecoin blockchain acts as a verifiable ledger, recording attestations about data and storage space activities on the network.
While decentralized data storage is a significant step, it doesn't stop there. To enhance services and create new use cases for stored data, the missing piece was the ability to enable programmability on the Filecoin layer and bring computation over the data layer. Protocol Labs recently launched the Filecoin Virtual Machine (FVM) enabling computation over Filecoin’s state. It is a runtime environment for smart contracts on the Filecoin network which allows not only to run any computation but also to enforce rules for storing and retrieving data.
The opportunities to build smart contracts and create capital formation through tokens will kickstart a prosperous environment of new applications and use cases emerging from the underlying data stack. To enable these opportunities, there are two services within the Filecoin ecosystem that will play a crucial role: Retrieval Market and Compute over Data (CoD).
Content Delivery Networks (CDNs), such as Saturn, accelerate data stored on the Filecoin Network and enable customers fast and low-cost delivery, thereby boosting today's retrieval market significantly. While the FVM enables computation over Filecoin’s state, we will see large-scale parallel computation over data through platforms like Bacalhau and Lilypad. They provide a platform for fast, cost efficient and secure computation where the data is generated and stored.
Both will expand the core product of cheap cold data storage by making the stored data within the ecosystem orders of magnitude more usable.
There is already a catalog of ideas for systems, applications and more published by Filecoin/Protocol Labs.
Here is a glimpse of what we are most excited about:
Tools that leverage programmability to automate storage deals, making it easier to interact with the system and providing a more personalized user experience.
We're particularly enthusiastic about projects that can pool individual datasets through incentive structures, allowing access to the data via pay-per-access or subscription models, similar to networks that pool digital or physical resources. Additionally, we look forward to seeing further development in DAO management tools related to datasets.
The reading above provides just a taste of what currently excites us the most. But that doesn't mean we're not open to other sectors and venture ideas. If you're building something in this particular sector that you are extremely passionate about, don't hesitate to apply. We can’t wait to hear from you!