Admittedly, Filecoin is not the household name that other crypto players like Bitcoin, Ethereum, or even Dogecoin are. Case in point, Bitcoin investors make up 80% of all crypto investments. At the same time, Ethereum already has four times the daily transaction volume of the most popular cryptocurrency. That said, given its unique value proposition, some believe that Filecoin (FIL) may soon become a leading name in the crypto world. Namely, this is because Filecoin is actually connected to a tangible service that adds value to its native token. Unlike Bitcoin which is simply a purely speculative asset, Filecoin is traded in connection to its proprietary decentralized file hosting service. According to the company that created it, Protocol Labs, Filecoin is like Google Cloud or Dropbox except it uses an anonymous network of host computers from around the world. Each computer that hosts pieces of these files is then rewarded with the aforementioned FIL cryptocurrency.
Interestingly, though, the cryptocurrency is simply the cherry on top of Filecoin’s appeal. Recently, there has been a spate of attacks proving the vulnerability of cloud technology. Just last year, a massive Russian cyber espionage campaign resulted in over 100 organizations being compromised through their cloud and local network identity systems. According to reports, hackers targeted the established Microsoft cloud service to steal security certificates that they used to successfully bypass some of the most sophisticated security protocols. Alternatively, since Filecoin stores data on a peer-to-peer blockchain, it can be significantly better for user privacy. Plus, since Filecoin practices end-to-end data encryption, even if one computer is compromised, hackers cannot learn what their fraction of data holds.
Because of this valuable service, Filecoin has already received much support. In 2017, just three years after its launch, Filecoin raised one of the largest initial coin offerings equal to $257 million. More recently, in 2020, over 70 organizations have already collaborated with the Filecoin network. This has also improved the total value of its native crypto, with its most current valuation being on the rise. As an added bonus, Filecoin is especially attractive to crypto enthusiasts because it can now be made somewhat less risky. Although as a token it still remains volatile, investors who buy Filecoin have the advantage of being able to somewhat insure it. And although it is only available in certain countries, Filecoin can also be protected by regulated exchanges that use qualified custodians. Through this, Filecoin can be stored in hack-proof cold storage. Aside from this, such regulated exchanges also protect Filecoin with risk and asset protection insurance providers who can buffer any investor losses. This only further incentivizes the appeal that Filecoin has for both crypto and cloud enthusiasts.
In all honesty, whether investors should take interest in Filecoin or not is dependent on their interest in the cloud. Consider that while Filecoin’s history has been mostly positive, its highest value in the last five years has been a modest $190. Within the last month alone, it has seen values swing from $20 to $6. Having said that, since the cloud is the main selling point of Filecoin, those with no stake in the cloud may be better suited to place their attention elsewhere. However, given that cloud services are becoming more universal, those who can afford to allocate more of their investment budget towards crypto may find Filecoin worthwhile.
This is especially true given the recent leadership initiative that Filecoin has shown. In May, Filecoin held the very first multi-day event for the advancement of the decentralized web. During this event, Filecoin company leaders along with other industry heads like those behind CoinDesk and Blockchain Association discussed and shared insider reports and recommendations to enhance civil liberties and preserve valuable information. If this industry-first is to be a reflection of Filecoin’s intentions to be more aggressive industry leaders, then those who invest in Filecoin may soon find their loyalty paying off.
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