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Author: Admin | 2025-04-28
Available space to the Filecoin network to store and retrieve data. To incentivize 24/7 availability from miners, Filecoins requires miners to deposit a portion of their block rewards as collateral. If a miner goes offline or prematurely terminates a contract, they will be penalized.IPFSThe InterPlanetary File System (IPFS) is a P2P file sharing system created by Protocol Labs. It comprises of a suite of protocols designed for organizing, storing and transferring data. The IPFS protocol was created as an alternative to centrally located server systems like HTTP. Instead, IPFS is powered by a decentralized system of operators.As IPFS is an open-source protocol, there are multiple implementation of it for various use cases. Although, its primary use case is for data publishing and content delivery. Anyone can join the IPFS network and run a node.IPFS usage is popular within the crypto industry for its decentralization roots. It shares similarity with crypto projects as no single entity owns or control IPFS. Filecoin was created to serve as an incentive layer for IPFS. Essentially, Filecoin records storage deals and proof of storage submissions on its blockchain. Additionally, payments and penalties are enforced by the Filecoin protocol.Image showing the multiple layers web3 architecture for applications that use Filecoin and IPFSSmart ContractsA key reason why IPFS and Filecoin are popular among decentralized application (Dapp) and blockchain developers is the smart contract data functionality provided by Filecoin. According to Filecoin, web3 developers can improve their speed and reduce gas fees by storing smart contract data on Filecoin. While data on Filecoin is stored off-chain, developers can generate verifiable identifiers and storage proofs to be included in their smart contracts.Cross-Chain InteractionsCross-chain bridges are critical blockchain infrastructure that enable isolated blockchain networks to interact with each other. These bridges support the trading of cryptocurrencies across multiple chains and enable access to dApp on foreign networks.Filecoin has integrated its network with two blockchain interoperability protocols – Axelar and Celer. The two cross-chain bridges enable the use of wrapped versions of non-native tokens such as ETH, BTC, USDC and USDT on Filecoin.Top 5 Filecoin Use CasesHere are the top use case of the Filecoin network:Decentralized Cloud Storage: Filecoin relies on an open and P2P network of participants that provide data storage services in exchange for token rewards. This decentralized structure makes Filecoin immune to single points of failure and strengthens its censorship-resistant properties.Data Retrieval Market: Filecoin network participants known as retrieval miners supply customers with the required data set in exchange for FIL tokens. Crypto incentives ensure that data is delivered swiftly by miners.Data Archiving and Backup: Filecoin can be used to backup and archive important public data, scientific works, historical contents and more.NFT and Blockchain Data Storage: Filecoin is a leading choice for storing metadata and large files associated with NFTs. It complements other blockchain ecosystems by offering decentralized storage.Content Delivery and Hosting: Filecoin’s data storage and retrieval capabilities makes it an ideal solution to provide content distribution and hosting services for the internet.How Filecoin Works?Filecoin is powered by
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