In the ever-evolving landscape of blockchain technology, Filecoin has emerged as a formidable player in decentralized storage. As we pass the halfway point of 2023, Filecoin’s progress and impact continue to captivate industry insiders, tech enthusiasts – and even the sceptics.
On April 27, the Filecoin network launched the highly-anticipated nv19 Lightning Upgrade, marking a significant leap forward in the realm of decentralized storage. This technical milestone brings a host of enhancements and improvements to the Filecoin ecosystem, enabling greater efficiency, security, and usability.
The Lightning upgrade includes bug fixes that will help to reduce block synchronization times, which is a block-by-block comparison of the Master and Replica files, copying over only those blocks that are different, instead of requiring the transfer of the entire file. This is a new challenge that has emerged as the number of storage deals occurring on the network has grown.
Technical jargon aside, what’s so important about this is that it represents the collective efforts of the Filecoin community, from ideation to implementation. Developers, storage providers, and community engineers have collaborated tirelessly, refining the Filecoin protocol, conducting rigorous testing, and gathering valuable feedback. The complexity of this undertaking necessitated meticulous planning, coordination, and constant communication among various stakeholders within the Filecoin ecosystem.
Adoption and market share
Filecoin’s adoption has surged since its inception, with its decentralized storage network attracting a growing number of users and enterprises.
Figure 1 shows off the impressive stats. As of June 2023, there is now over 1,000 pebibyte (PiB) of data stored on the Filecoin Protocol (up from around 400 PiB in 2022 and just 24 PiB in 2021), from over 1,400 Storage Providers with over 1,100 clients across the globe, including NASA, Lockheed Martin, Berkeley University, and more.
Figure 1: Filecoin’s vital stats
Source: Filecoin Foundation
The platform’s unique combination of blockchain technology and distributed file storage has proven to be a game-changer. Not only does Filecoin offer secure and reliable storage solutions, but it also empowers users to monetize their excess storage capacity. This incentive-based system has attracted a vibrant community of miners, storage providers, and developers.
Filecoin’s market share has expanded significantly, as it captures a larger slice of the decentralized storage market. Its robust infrastructure and seamless integration with various applications and platforms have made it an attractive choice for individuals and organizations seeking scalable and decentralized storage solutions.
Filecoin now accounts for 98% of all stored data in distributed storage, and from 2020 to 2022 total data stored grew 1,800% year on year, with daily storage at approximately 5.8 PiB (Figure 2).
While competition exists, Filecoin’s reputation for security, efficiency, and fair incentivization mechanisms has solidified its position as a market leader.
Figure 2: Filecoin stored data, October 2020 – June 2023
Source: Filecoin network
The Filecoin Virtual Machine (FVM)
One of the most anticipated and noteworthy developments in Filecoin’s journey has been the introduction of the Filecoin Virtual Machine (FVM).
FVM was created to address Protocol Labs’ ambition of creating a truly decentralized internet. To enable web-scale applications, you need both storage and programmability, and FVM was created to bring general programmability to the Filecoin storage network.
This innovation represents a significant milestone, enabling the execution of smart contracts and decentralized applications (dApps) within the Filecoin ecosystem. The FVM opens up new avenues for developers to create a wide range of decentralized storage-related applications, thereby enhancing the overall functionality and versatility of the platform.
June marked 100 days since the debut of the FVM (Figure 3), with the launch solidifying Filecoin as, in their words, “…uniquely positioned to power the open data economy.”
Figure 3: The Filecoin Virtual Machine, June 2023
Source: Filecoin Foundation
The FVM also promises to facilitate the leasing and borrowing of FIL, Filecoin’s native token which is used by Storage Providers to commit to, grow, and secure the network.
The Filecoin Ecosystem, ‘A diverse landscape of applications and projects” according to Filecoin, is currently sitting at 115 members, but arguably the list of potential products and services running on Filecoin is limitless.
Almost as important, Filecoin are doubling down to make sure the FVM is easy to use. “We want it to be painless to upload funds, data and smart contracts onto FVM. We are working with our close partners – wallets, exchanges and explorers – to make sure these onramps make sense for builders.”
The rest of 2023 and beyond
As we look to the future, Filecoin’s trajectory seems promising. The platform’s continued growth and expansion show no signs of slowing down. The development team is focused on further improving performance, scalability, and usability, making Filecoin even more accessible to a broader user base. Increased integration with existing applications and protocols will likely drive adoption to new heights.
“Filecoin now accounts for 98% of all stored data in distributed storage, and from 2020 to 2022 total data stored grew 1,800% year on year.”
In addition, partnerships and collaborations with industry leaders and innovative startups will play a crucial role in Filecoin’s journey ahead. By forging strategic alliances, Filecoin can leverage the expertise and resources of these entities to foster innovation, enhance interoperability, and unlock new use cases.
Furthermore, the ongoing research and development efforts around areas such as privacy, data management, and cross-chain compatibility hold immense potential for Filecoin’s future growth. These advancements will help Filecoin stay at the forefront of decentralized storage, ensuring it remains relevant and competitive in an ever-evolving market.
We’re only in July, but Filecoin has already made impressive strides in 2023, solidifying its position as a leading decentralized storage platform. By year end we expect over 2,000 PiB of data to be stored on the network, and capacity utilisation to approach 20% (Figure 4). We’ll also be keeping our eye on the rapidly growing list of real-world clients featured on the Filecoin Client Explorer.
Figure 4: Filecoin verified data and network capacity, projected to Dec 2023
With its growing adoption, expanding market share, and the introduction of the Filecoin Virtual Machine, the stage is set for Filecoin to continue its upward trajectory throughout 2023, and beyond. As the decentralized storage landscape evolves, Filecoin’s commitment to innovation and collaboration makes it a force to be reckoned with, offering users a secure and efficient solution for their storage needs.
Disclaimer: This Article has been prepared by Holon Global Investments Limited ABN 60 129 237 592. Holon Global Innovations Pty Ltd (“HGI”) is a wholly owned subsidiary of Holon Global Investments Limited (together “Holon”). HGI is a Filecoin (FIL) Storage Provider and is positioned as a major player in the FIL decentralised data storage arena. FIL Storage Providers are rewarded in FIL for the provision of data storage capacity. Holon, its officers, employees and agents believe that the information in this material and the sources on which the information is based (which may be sourced from third parties) are correct as at the date of publication. While every care has been taken in the preparation of this material, no warranty of accuracy or reliability is given and no responsibility for this information is accepted by Holon, its officers, employees or agents. Except where contrary to law, Holon excludes all liability for this information.