About the author: Tianyi Dong, IPFS/Filecoin Technology evangelist in China, “IPFS Guide” author graduated from The School of Software and Microelectronics of Peking University, senior blockchain technology developer, now dedicated to IPFS/Filecoin technology promotion in China. This article was posted on wechat official account: IPFS guide (ipfs_guide)

Filecoin’s economy:

Filecoin miners are known to fall into two categories:

  • Retrieve the miners
  • Store the miners

Prerequisite: Miners can participate individually in both retrieving miners and storing miners. But xiaobian thinks that participation is the right way.

Today we’re going to talk about how two types of miners get FIL, which is mining. In A Filecoin system, miners contribute two kinds of resources: storage space and traffic (in a BTC system, miners contribute the ability to compute hashes). Compared to BTC, Filecoin’s economy and resource system are slightly more complex:

  • Filecoin miners contribute two types of resources, storage and traffic, that make up the value exchange market
  • The consensus protocol of the Filecoin blockchain has formed the new coin distribution market

System participants: Users: users with storage needs, or data download needs, or holders of Filecoin tokens

  • Miners: Filecoin miners, who contribute storage and flow resources
  • Exchange: An exchange between Filecoin tokens and fiat coins

The Filecoin economy is a value exchange and new currency distribution. Here’s a diagram to illustrate how value and tokens are transferred within the Filecoin system (please ignore the long ugly words).

Value exchange market:

  • Users and exchanges: Users purchase FIL for use
  • Miners and exchanges: Miners sell FIL in exchange for fiat money
  • User and miner: Exchange traffic, user pays to download data, miner sends data and gets user paid FIL
  • User and miner: Exchange storage space, user pays to store data, miner saves data for user and obtains user FIL

Note: In this process, there is no distribution of new coins (new FIL), only the exchange of value between existing tokens, called the exchange of value market.

Consensus Agreement Market:

  • Storage miners and Filecoin protocols: Storage miners use stored data, participate in consensus protocols, and receive distribution of new coins. This process is the same as BTC mining process
  • Storage miner and FIlecoin agreement: Storage miners sell their storage space by pledging a certain amount of FIL tokens

Miners do not participate in the distribution of new currency, i.e. do not participate in the consensus agreement

Store miner earnings:

  • Storage revenue: Helps users store data and receives storage fees paid by users (value exchange)
  • New coin Distribution: Participate in the consensus agreement to receive new coin distribution (God coin distribution)
  • Transaction fees: Participate in the consensus agreement and obtain transaction fees

Search miner earnings:

  • Retrieval revenue: the user downloads the data and obtains the data download fee (FIL) paid by the user.

Data source for storing miners:

  • Users pay to store data.

Data sources for mining:

  • As storage miners themselves, store user data
  • Buy downloaded data from other miners themselves
  • I found some data on my own

Note: As a storage miner, stored data can only be distributed one way by the Filecoin blockchain. As a search miner, you can have a variety of data sources. You can store data as a storage miner, find some data by yourself, and download some data from other miners for a fee.

Revenue impact for storage miners: Try to get more users to store data with you

  • Network speed
  • The price of storing data can even be zero, but if it’s zero, there’s no storage revenue

Tuning required to store miners:

  • Dynamically adjust the price of storage to obtain more revenue

Search miner revenue impact factors: Efforts to provide data to more users

  • Network bandwidth
  • The network time delay
  • The amount of stored data required by users
  • Retrieves pricing of data

To retrieve the tuning required by miners:

  • Dynamically adjust the price of retrieval data to obtain more revenue
  • Try to find more data that users are interested in
  • Improve network bandwidth and reduce network latency

Both the retrieval market and the storage market conform to the supply-demand curve in economics. In order to obtain the maximum benefit, it is necessary to find the price point with the maximum benefit, as shown below:

Xiaobian also received a more asked question: do I have to pay for the data I save to download? The answer is: yes!! The following figure is a screenshot of ali Cloud OSS cloud storage. It shows that the storage amount of data is 79.28G and the data download of this month is 1.6TB. You have to pay for storage, you have to pay for data. Doesn’t that sound like how we feel? I don’t have to pay for any apps on my phone? Virtually all of the data on the web is paid for, but most of the time it is invisible to the end user.

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Filecoin Protocol (Mining)

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