Decentralized Storage Project Filecoin Up 25% in Sea of Red

The current price of Filecoin is currently about $90, its highest price since May 18. The coin began rising yesterday afternoon, when it crept up from about $75 to highs of $96, according to data metrics site Nomics

Despite the enticing green numbers and a staggering market cap of $6.9 billion, Filecoin is still down from highs of $237 on April 1, now two months ago.

While Filecoin rose, others dipped. Bitcoin is down 6%, Etherum by 8%, and Dogecoin by 15%. 

Those coins crashed after Elon Musk appeared to indicate on Twitter that he had broken up with Bitcoin and found someone else. 

The Tesla CEO had bought billions of dollars worth of Bitcoin in February but started to trash the currency last month due to concerns about Bitcoin’s environmentally damaging proof-of-work mining mechanism. 

This could explain why Filecoin has risen. Instead of mining coins through brute computational force, Filecoin awards coins to miners that store data on its blockchain. 

That’s because Filecoin operates akin to a decentralized Dropbox—miners can sell spare hard drives as storage space. And because the network’s decentralized, it’s difficult to delete this data from the network.

It’s less energy-intensive than Bitcoin, but the network is designed to churn through hard drives like there’s no tomorrow. Chia, a similar network, has caused massive SSD shortages in Asia.


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Filecoin Launches Decentralized Storage Service for NFTs

In brief

  • Filecoin has introduced a new decentralized storage service to preserve the digital content associated with non-fungible tokens.
  • Dubbed NFT.Storage, the free service allows users to save their NFTs’ metadata and content off-chain.

Decentralized storage protocol Filecoin has announced a new free service called NFT.Storage, touting it as a future-proof method of preserving non-fungible tokens’ (NFTs) metadata and content off-chain.

“NFTs are part of humanity’s cultural legacy—and designing their data for long-term accessibility is crucial,” said Mikeal Rogers, engineering manager at Filecoin developer Protocol Labs. “Content addressing and distributed storage networks ensure that digital artwork, basketball cards, and virtual real estate are guaranteed to stay secure and available long-term.”

Why is storing NFTs important?

NFTs are cryptographically unique tokens that can be used to represent digital content such as artwork and music. Because they are non-interchangeable, scarce and can be minted as one-of-a-kind or in small batches, a thriving market for NFTs has sprung up among collectors, with some fetching outrageous prices. But there is a catch.

While NFTs can nominally represent artworks, music, or videos, the blockchain tokens don’t actually contain the files themselves—or even the name of their author, for that matter. Instead, an NFT is essentially a collection of metadata—links to the files they represent, which need to be hosted by third parties such as auction platforms.

Because of this, there’s a very real risk of multi-million dollar NFTs becoming defunct if the files they represent are no longer available on the Internet—for example, if the company hosting the file goes under. NFTs can even lose their status as a digital certificate of authenticity and ownership, if there is nothing provably connecting them to an actual media file.

Keeping files accessible

To solve this problem, Filecoin developer Protocol Labs and cloud storage service provider Pinata have introduced NFT.Storage, a decentralized protocol that allows users to “back up” their NFTs and the corresponding media via content addressing and decentralized storage.

NFT.Storage is backed by Filecoin and InterPlanetary File System (IPFS) technologies. The latter enables people to create an IPFS hash of their content (called a content identifier, or CID). The CID can be used to find the corresponding files, which are hosted on IPFS nodes all around the world. This method ensures that files—including those attached to NFTs—can always be found as long as at least one host provides access to them.

According to Pinata’s website, the service provides “secure and verifiable files for your NFTs.” Users upload their content via Pinata, and attach the IPFS CID to their NFT before minting it. 

Per Filecoin’s announcement, this method, known as content addressing, could prevent problems such as fragile links and “rug pulls”, since CIDs are generated from the content itself.

“NFT.Storage uses Filecoin for long-term decentralized data storage—brokering storage and retrieval deals to preserve NFT data long-term. Filecoin provides a permanence layer using cryptographic proofs to ensure the durability and persistence of the NFT data over time,” the press release added.

The developers also noted that data stored via IPFS and Filecoin can be retrieved directly in a browser via any public IPFS.

Safe forever—until further notice

There are, however, still some caveats. Although Filecoin states that NFTs will be “guaranteed to stay secure and available long-term” on its service, NFT.Storage is not wholly exempt from the same uncertainty as other third-party hosting service providers.

“Data will continue to be persisted ad infinitum or until Protocol Labs decides to conclude the project,” NFT.Storage’s Terms of Service state, adding that “data will be stored at no cost to the user on IPFS for as long as Protocol Labs, Inc. continues to offer free storage for NFT’s. Protocol Labs, Inc. reserves the right to terminate at its sole discretion.”

Filecoin has promised to notify NFT enthusiasts 90 days before potential termination of the service “to allow users enough time to make arrangements for storing their data by other means.”

So while NFT.Storage offers an additional layer of security for NFT creators and owners, it’s not yet a foolproof solution.


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Filecoin Price Could Double In Next 12-18 Months: Wedbush

In brief

  • Filecoin is a decentralized protocol that allows users to rent out spare storage on their computer.
  • One analyst sees it as the most promising innovation in crypto, because of its potential use cases for huge tech giants.

Dan Ives, managing director at equity research firm Wedbush Securities, is known for covering big tech stocks like Apple, Tesla, and Microsoft. But in a note last week on the day before the Coinbase direct listing, Ives tossed out this comment at the end: “We believe there are a number of business models attacking this new market opportunity, with privately held Filecoin one of the more impressive strategies we have seen in the market.”

Filecoin is a decentralized data storage protocol. Unlike other blockchains, it allows anyone to rent out spare storage on their computer, and anyone can buy storage on the Filecoin network. This makes the Filecoin network a huge data vault—and this is why Ives sees it as crypto’s greatest innovation to date. 

Filecoin network has big potential for big tech companies

Ives elaborated on his take in a phone interview with Decrypt. “Today, the markets are dominated by large software companies. Filecoin offers developer application builders significantly cheaper storage options in a very secure, unique format,” Ives said. “That’s very applicable, especially just given the amount of data that needs to be stored.” 

In other words, Ives believes the Filecoin network has applicability completely outside of crypto. Some of the world’s biggest companies—Amazon, Google and Microsoft to name just three—rely on centralized cloud storage. 

According to Ives, it’s “just not feasible” for these companies to continue storing all their own data, which is where the Filecoin network comes in, an innovation that is already “12 to 18 months ahead” of companies that—according to Ives—are already well-versed in blockchain, like IBM. 

“There is a clear supply demand in terms of what they’re going after as a business model,” he added. 

But that doesn’t mean the Filecoin network will only benefit software companies. Ives suspects that—assuming the Filecoin network does catch on in these industries—there will be a trickle down benefit for crypto too.

Filecoin’s success would be crypto’s success

Filecoin’s token (FIL) is up 98% in the past month, and nearly 3,000% in the past year. But Ives’ bullishness on Filecoin is not just a reaction to its recent price surge. Ives and Wedbush Securities have been beating the Filecoin drum since January, when Filecoin’s price was largely static. On January 19, a Wedbush newsletter described Filecoin as the “Airbnb” of storage. “In our opinion, we will start to see the beginnings of a hybrid environment between traditional cloud and blockchain as early as 2022,” the newsletter read.

Ives describes the Filecoin network as a “golden goose” for the crypto industry: “We can all talk until we’re blue in the face about cryptocurrency and its value and applicability with the emotional bull/bear argument,” he said, adding, “The one thing that’s not even debatable is blockchain becoming a much bigger trend, and having real applicability.” 

Of course, if Filecoin does become the data solution of choice for the world’s biggest companies, that success will translate to a much higher FIL price than we see today. “I believe it’s a currency that could double over the next 12 to 18 months because of the penetration capabilities they’re going after,” Ives forecasts.


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Filebase Raises $2 Million to Make Decentralized Storage as Easy as AWS

In brief

  • Filecoin, Sia, and other decentralized storage networks come with “technical friction.”
  • Filebase aims to be a more user-friendly onramp to decentralized storage.

Though you wouldn’t know it by its tagline as a provider of “S3-compatible object storage powered by blockchain,” Filebase is out to un-complicate things for potential consumers of decentralized storage. 

And several prominent investors think it’s got the right approach. 

The Boston-based startup has raised $2 million in its first seed funding round, led by Multicoin Capital, with additional investments coming from Version One Ventures and Messari founder Ryan Selkis.

According to a press release, “The Filebase platform offers a browser-based dashboard and an S3-compatible API to deploy, access and manage data across several decentralized storage networks.”

As the company’s co-founders told Decrypt in an interview, that essentially means it’s a way for people to easily leave centralized cloud storage like Amazon Web Services behind and get on to Sia or Storj—two decentralized storage networks that allow people to rent out some of their hard drives’ computing power in exchange for cryptocurrency. The company plans to add support for Filecoin and Arweave by the end of this year.

“We wanted to make it easy and scalable for anyone really with a credit card to sign up and try decentralized storage,” said COO Zac Cohen. The user doesn’t need to handle any crypto; Filebase does that for you.

CEO Joshua Noble went on to illustrate the problem most customers would face by using Sia directly. First, they’d have to download the entire blockchain and then index the blocks for 12 to 36 hours, after which they’d need to buy Sia coin to purchase storage. Then, they’d have to make storage contracts with hosts, which are placed on-chain. 

“They kind of serve like cryptographic service-level agreements, if you will, but those are the those that kind of ensure that, okay, this host is not going to go offline, if this host does go offline they will not get paid by me, they will suffer a loss of collateral…”

As Noble put it, there’s a lot of “technical friction involved.”

Think of Filebase like a Roku stick for decentralized storage, or better yet an Amazon Fire stick. With a Fire stick, you can plug it in and start watching Netflix, Hulu, and all the other streaming channels. And if you don’t have HBO but want to watch it, you can buy HBO through the interface. 

It’s the same with Filebase. Only in this case, you’re picking and choosing who to buy storage from, and in what quantities.

But there’s more than technical friction standing in the way of decentralized storage networks. There’s also AWS, which built the standard for object storage–the practice of storing large chunks of unstructured data. It’s called S3, or “simple storage service,” and it’s so dominant that all its cloud competitors, from Oracle to Google Cloud to Microsoft Azure, adopted that standard.

Most blockchain solutions aren’t easily compatible with that standard, so organizations who want to take a chance on far cheaper storage with potentially less downtime can’t do it without a lot of technical knowhow. Filebase does use that standard, creating a bridge for users to Web 3 products.

Cohen and Noble say that their model also has several advantages over AWS—namely the price. They provide a small amount for free, and then charge $5.99 per terabyte for storage and another $5.99 for bandwidth.

“The dirty secret of the cloud, which we’ll happily key you in on,” said Noble, “it’s not the storage pricing, it’s the bandwidth pricing that Amazon makes a killer profit off.” He estimated that the cost of storing three separate copies of 1 TB of data (Filebase makes the data redundant to prevent loss) would cost $170 to $180 with AWS as compared to $5.99 on Filebase.

Moreover, as the two pointed out, if AWS goes down, Netflix goes down. That’s less of a problem with decentralized data, especially as Filebase allows consumers to move between storage providers on different blockchain networks: “If a filebase ever goes down,” said Cohen, “you wouldn’t even know that we were down because… we would be able to route you to the nearest location and you would be none the wiser.”

That doesn’t sound too complicated—exactly how customers want it.


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Grayscale Effect Pumps Filecoin, But for How Long?

Key Takeaways

  • Filecoin recently reached a new all-time high of $238.50.
  • Upward momentum skyrocketed after Grayscale added 29,550 FIL to its holdings in the past 24 hours.
  • While emotions run high, multiple technical indicators warn of a brief correction before higher highs.

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Filecoin has been on a roll lately, surging more than 550% since the beginning of March. While institutional capital continues to flow in, the technicals point to a brief correction before further gains.

Institutional Demand Picks Up

Institutional capital seems to be flowing en masse into Filecoin. Data from Bybt shows that Grayscale has gone into a buying spree, adding more upward pressure to the decentralized storage network token. 

The world’s largest cryptocurrency asset management firm started increasing its holdings in mid-March and raked another 29,550 FIL in the past 24 hours.

Grayscale Filecoin Holdings by Bybt
Grayscale Filecoin Holdings by Bybt

Grayscale’s latest purchase comes only a few days after online game operator The9 signed a $2 million deal to purchase Filecoin mining machines. 

The Shanghai-based company now owns an independent node on the FIL blockchain, and it is expected to have more than 80 Pebibytes of effective storage mining power in the network. 

Filecoin in Extreme Overbought Conditions

As institutional demand picks up, Filecoin has done nothing but shoot up. Since the beginning of March, FIL’s market value has risen by nearly 550%, gaining more than 200 points. 

Filecoin went from a low of $36.90 to recently hit a new all-time high of $238.50. 

While market participants grow overwhelmingly bullish, this altcoin is trading at extremely overbought conditions. Not only is the daily Relative Strength Index (RSI) hovering at a value of 88, but the Tom DeMark (TD) Sequential indicator has flashed multiple sell signals. 

The bearish formations developed in the form of a green nine candlestick and an aggressive 13 candle. These sell signals are indicative of a one to four daily candlesticks correction before the uptrend resumes. 

A spike in profit-taking around the current price levels could be significant enough to validate the pessimistic outlook. Filecoin could then drop towards the 50% or 38.2% Fibonacci retracement levels to look for support.

SIMETRI Research

These interest areas sit at $156 and $136, respectively. 

Filecoin US dollar price chart
FIL/USD on TradingView

Given the significant bullish momentum that Filecoin is going through, the optimistic scenario cannot be disregarded. A green two candlestick trading above the current green one candle would invalidate the sell signals and lead to higher highs. 

By slicing through the recent peak of $238.50, the odds will substantially increase for an upswing towards $300. 

Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.

This news was brought to you by Phemex, our preferred Derivatives Partner.


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Filecoin (FIL) Sells Off After Delivering Grayscale-Driven Bumper Rally

Filecoin dropped ahead of hitting its previous record high, near $273.57, prompted by profit-taking among traders.

FIL Market Outlook

The FIL/USD exchange rate slipped closed Thursday down 2.82 percent despite logging its second-best historic level of $239.94 in the same session. Traders started securing their profits at the local top amid falling bids, leading to a 22.65 percent decline ahead of the session’s end.

Filecoin stabilizes near $180 after its recent rally. Source: FILUSD on

Friday was slightly better as Filecoin attempted a brief rebound. The coin managed to float above its newfound support area near $180 while pursuing a retest of its recent high of $239.94. Its revival following the overnight sell-off appeared as a part of a broader uptrend across the altcoin market.

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Read further: TA: Ethereum Revisits $2K, Why The Bulls Are Not Done Yet.

The price action showed investors’ continued trust in the Filecoin ecosystem. In general, it is a platform that allows users to sell their excess digital space on an open platform. Storage providers and users conduct traders over its blockchain using FIL token.

Meanwhile, FIL has a limited supply cap of 2 billion tokens. About 600 million of those FILs stay with Filecoin’s parent company Protocol Labs (with 6-year linear vesting) and its team and investors (again, with a 6-month to 6-year linear vesting). Meanwhile, Filecoin has allocated about 2.5 percent of the total 600 million FIL to fund its fundraising or ecosystem development.

The rest of the FIL supply powers the supply storage trades atop the Filecoin protocol, thereby ensuring that the token has a concrete utility and long-term value.

Institutional Accumulation Brings Retailers

New York investment firm Grayscale Investments introduced a Filecoin trust in March to its range of similar crypto-enabled services. In retrospect, the firm enabled institutional investors to gain exposure in the FIL markets without purchasing or managing the token. That prompted Grayscale to increase its FIL reserves, reflecting that institutions showed interest in the Filecoin project.

Grayscale Filecoin Trust increases FIL holdings. Source:

Two weeks after its introduction, Grayscale Filecoin Trust added 45,550 FIL to its reserves. The firm continued to hold it, showing no concrete selling pressure from institutions. That shows that the latest FIL plunge surfaced from the retail market.

Wu Blockchain, a fintech journalist, based in China, said the demand for FIL tokens is coming from the mainland.

“China is crazy for Filecoin, with a 24h increase of more than 30%, reaching a maximum of $236. The 24h trading volume of FIL in Huobi, China’s largest exchange, reached $24.2b, nearly three times the volume of the second ETH $8.8b, Bitcoin was $7.8b. FILDOWN, a short-selling leveraged token in Binance FIL, plummeted by 53%, with a turnover of US$3.4 billion, indicating a large number of short FIL liquidation in Binance.”

Photo by kaleb tapp on Unsplash 


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Our Man in Shanghai: Filecoin the talk of the town, Polkadot and NFTs gain attention

Distributed storage network project Filecoin is the talk of the town as FIL was the most highly traded token on Huobi, OKEx and Gate on Thursday. These three exchanges have a predominantly Chinese user base and represent a large part of the Tier One trading volume for major pairs. On Thursday afternoon, Huobi trading volumes of FIL were more than three times that of BTC as the price reached a 7-day increase of 170%.

Filecoin has had strong success in capturing the attention of Chinese investors, including large investment groups such as Fenbushi Capital, SNZ Capital and Neo’s EcoFund. These three were part of a group that backed the $23 million Filecoin Ecosystem Fund, announced on March 25. The Filecoin Ecosystem Fund is intended to support projects and help development on the network. It could also give backers early access to new projects, which is a lucrative model for VCs in an increasingly crowded investment space. It remains to be seen which of these two consequences are a bigger priority for the funds involved.

On March 28, OKEx produced a video explaining the concepts behind Filecoin, which received around 600 shares and 3400 likes on Weibo. This shows a high level of attention from the Chinese retail audience, a demographic that is tough to obtain and hard to preserve over longer time-frames.

NFTs in Beijing, Polkadot in Hangzhou

Beijing-based BlockCreateArt hosted a major NFT art exhibition on March 26 supported by auction house Christie’s, Digital Finance Group and mining rig producer Bitmain. Interest in digital art has increased on some levels in China, but cultural and artistic differences have led to a more pragmatic approach towards leading digital artists such as Beeple. The exhibition will be stopping in Shanghai early in April.

Hangzhou was home to the Open Days blockchain exhibition sponsored by Candaq Fintech Group. The event had one hall dedicated to Polkadot projects, with speakers from Rarelink, Litenty and Phala, among others. The upcoming parachain auctions have become a topic of interest with so many local projects and projects with ties to the region being built on Polkadot.

Central bank head says digital yuan playing catch-up

The head of the Digital Currency Research Institute at the People’s Bank of China has recognized that private payment processors Alipay and WeChat Pay are in a dominant position in the Chinese payment space. During a panel appearance, Wang Changchun noted that the government-backed digital currency would be needed to maintain stability should something happen to the existing solutions. For the moment, WeChat Pay and Alipay don’t seem to be in any imminent danger of losing their market share, but that could change quickly if government-led incentives were put in place for those willing to convert.

In enterprise news, electric vehicles brand IM Motors, working with SAIC Motor and Alibaba, announced a blockchain powered service network that would incentivize customers to share data with the company. In order to achieve some level of traceability and resistance to tampering, on-chain points would be given to customers using the vehicle and related apps.

The blockchain network was announced as exclusive and private, so while it represents a slight normalization of blockchain technology, it will likely have much in common with more centralized storage networks.

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.


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Up 138% in one week, is Filecoin bound for a crash?

After a rough start, Filecoin has managed to break into the top 10 leading cryptocurrencies by market capitalization. After overtaking Chainlink (LINK) and Theta Network (THETA), with a rally of 138% in one week and 418% in one month, FIL took over the tenth position.

Founded by Juan Benet, creator of the InterPlanetary Files System (IPFS), and developed by Protocol Labs after receiving $257 million in its Initial Coin Offering, the platform has managed to attract a lot of attention in China, as journalist Colin Wu reports.

Data shared by Wu indicates that FIL has seen a 30% increase in its trading volume for the last 24 hours on Huobi’s platform. The cryptocurrency has managed to reach a new all-time high based on increased buying pressure and demand for the cryptocurrency.

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The daily trading volume stood at $24.2 billion. In contrast, the daily trading volume for Ethereum stood at $8.8 billion and $7.8 billion for Bitcoin. The rapid increase in price has had negative consequences for investors with short positions, as Wu notes:

FILDOWN, a short-selling leveraged token in Binance FIL, plummeted by 53%, with a turnover of US$3.4 billion, indicating a large number of short FIL liquidation in Binance.

Increase in institutional demand for Filecoin

Additionally, Wu recorded an increase in transactions for the FIL/USD pair on Coinbase’s Pro trading service. After FIL’s price surpassed the $180 barrier, “transactions with high credibility were recorded on Coinbase,” according to the journalist. Wu added:

Distributed storage has become popular. Filecoin continues to climb to 136U, HOT has risen by nearly 40% and 2500% year-to-date, its market value is close to that of HT, the token of China’s largest exchange.

FIL’s price appears to have increased following the launch of Grayscale’s Trust based on this and other cryptocurrencies to expand its product suite. In addition, the teams behind platforms Filecoin and Livepeer have announced a “co-mining” program. According to an official release:

Livepeer is launching a co-mining pilot with Filecoin to enable Filecoin miners to become Livepeer video miners while continuing to mine on the Filecoin network by storing transcoded video data.

Thus, miners of these cryptocurrencies will be able to obtain higher profits and “additional economic opportunities”. Filecoin’s mining mechanism requires miners to obtain token FIL to make a “bid/initial response”. The latter has contributed to the increase in buying pressure for the token.

Demand from companies and start-ups to use Filecoin’s platform also seems to be accelerating, as indicated by a recent report from its team.

Trader Fiskantes believes the coin is “massively overvalued” and could see a 90% drop. This is mainly based on FIL’s increase supply that will double in the next 3.5 years. However, the high number of partnerships and interest from China could contribute to the prolongation of this token’s rally. At the time of writing, FIL is trading $190 with gains of 3.8% in the last 24 hours.

Filecoin FIL


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Filecoin Foundation Donates $10 million in FIL to Internet Archive

In brief

  • The Filecoin Foundation, an independent organization orbiting the cryptocurrency Filecoin (FIL), is donating nearly $10 million to Internet Archive.
  • Internet Archive is a nonprofit that preserves e-books, TV, old website caches, and other forms of digital ephemera.

The Filecoin Foundation, an independent organization orbiting the cryptocurrency Filecoin, is donating 50,000 FIL tokens (worth nearly $10 million at today’s prices) to Internet Archive.

It’s the single largest outside donation in the nonprofit’s history, according to press materials.

Internet Archive is responsible for the Wayback Machine, a free library of cached websites, and preserves TV shows, books, audio recordings, and other forms of digital ephemera on its site.

It’s a little like Ubuweb, the online archive founded by the poet Kenneth Goldsmith, but significantly more ambitious.

The Internet Archive has been using the storage network behind Filecoin (the coin, not the foundation) for its “Filecoin Archives” initiative, which preserves pieces of internet history via decentralized nodes.

Meanwhile, the price of Filecoin’s FIL tokens has shot up over the past week, thanks in large part to demand from China. It’s now a top ten cryptocurrency, by market capitalization.

“The Filecoin Foundation and the Internet Archive have missions that are extremely aligned—to preserve humanity’s most important information,” said Marta Belcher, a lawyer at Ropes & Gray and the chair of Filecoin Foundation’s board.

“I am so excited that the Filecoin Foundation can support the incredible work that the Internet Archive is doing to advance the decentralized web.”

Disclosure: Protocol Labs, the company that sustains Filecoin, is sponsoring the first season of Decrypt’s reader token. And Joe Lubin, the founder of Decrypt’s parent company ConsenSys, is an advisor to the board of Filecoin Foundation.


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Why Filecoin Price Is Surging: Look to China

In brief

  • FIL is up 530% in the past month and has leapfrogged LINK and LTC by market cap.
  • There’s been lots of embrace of Filecoin in the U.S.
  • For another source of the surge, look to China, which has gone wild for Filecoin mining.

Filecoin (FIL), the token associated with the decentralized file-sharing protocol of the same name from Protocol Labs, is surging. Its price has shot up 165% in the past week, and 530% in the past month.

Now Filecoin has leapfrogged Chainlink (LINK) and Litecoin (LTC) as the No. 9 coin by market cap.

So, what’s driving the spike?

Yes, the larger crypto market is in the midst of a sustained bull run. And yes, there has been a lot of news about Filecoin recently that has brought the “decentralized Dropbox” to the attention of crypto speculators, including Coinbase listing Filecoin in December, and Grayscale Investments adding a Filecoin Investment Trust to its roster of crypto investment vehicles.

But for another source of the Filecoin surge, look to China.

Filecoin mining is booming in China, especially on crypto exchange Huobi, where Filecoin trading activity using the Chinese yuan is higher over the past few days than yuan trades into Ethereum or Bitcoin.

For more insights, Decrypt spoke to two people closely familiar with the Filecoin scene in China, who didn’t want to be named since they work at major cryptocurrency companies. They said that Chinese officials have all-but-officially encouraged Filecoin mining because its decentralized cloud storage purpose fits into China’s agenda to build out its own internet infrastructure as a defense mechanism in the ongoing tech Cold War.

Major Chinese companies have been getting into Filecoin mining, including Xinyuan, which invested nearly $100 million in Filecoin miners, and Ninth City, which is publicly traded on the Nasdaq (NCTY) and has spent $12 million since February on Filecoin mining partnerships.

And Chinese retail investors are gobbling up FIL too, pumping it on social media apps like WeChat. There are even Filecoin mining ads running in the Chinese subway; it has gone fully mainstream there.

Unlike with Bitcoin mining, Filecoin miners must buy FIL in order to mine more of it, which means new miners are always buying FIL to get starting capital. Decrypt‘s sources said that Huobi is no longer letting miners borrow FIL, which means miners must buy FIL on the open market, which is driving up the price further. (Decrypt has reached out to Huobi for comment.) Thus, there’s a self-fulfilling cycle where early FIL miners are eagerly selling FIL to the latecomers. 

And early Filecoin miners are making huge money by converting testnet FIL to mainnet FIL. 

But for how long is this all sustainable? According to Filfox, a Filecoin blockchain explorer, an average 370,000 FIL tokens are being mined every day (about $82 million at the current FIL price), and unsurprisingly, gas prices (on the Filecoin blockchain, gas is nanoFIL) are ticking up. That could mean a FIL market correction is coming. (Decrypt has reached out to Protocol Labs for comment on Filecoin’s price action.)

For now, early miners, new investors, and Chinese tech companies eager to diversify are all playing a part in fueling the Filecoin frenzy.


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