Filecoin [Futures] Whitepaper

Abstract

The internet is in the middle of a revolution: centralized proprietary services are being replaced with
decentralized open ones; trusted parties replaced with verifiable computation; brittle location addresses
replaced with resilient content addresses; inefficient monolithic services replaced with peer-to-peer algorithmic
markets. Bitcoin, Ethereum, and other blockchain networks have proven the utility of decentralized
transaction ledgers. These public ledgers process sophisticated smart contract applications and
transact crypto-assets worth tens of billions of dollars. These systems are the first instances of internetwide
Open Services, where participants form a decentralized network providing useful services for pay,
with no central management or trusted parties. IPFS has proven the utility of content-addressing by
decentralizing the web itself, serving billions of files used across a global peer-to-peer network. It liberates
data from silos, survives network partitions, works offline, routes around censorship, and gives
permanence to digital information.

Filecoin is a decentralized storage network that turns cloud storage into an algorithmic market. The
market runs on a blockchain with a native protocol token (also called “Filecoin”), which miners earn
by providing storage to clients. Conversely, clients spend Filecoin hiring miners to store or distribute
data. As with Bitcoin, Filecoin miners compete to mine blocks with sizable rewards, but Filecoin mining
power is proportional to active storage, which directly provides a useful service to clients (unlike Bitcoin
mining, whose usefulness is limited to maintaining blockchain consensus). This creates a powerful incentive
for miners to amass as much storage as they can, and rent it out to clients. The protocol weaves
these amassed resources into a self-healing storage network that anybody in the world can rely on. The
network achieves robustness by replicating and dispersing content, while automatically detecting and
repairing replica failures. Clients can select replication parameters to protect against different threat
models. The protocol’s cloud storage network also provides security, as content is encrypted end-to-end
at the client, while storage providers do not have access to decryption keys. Filecoin works as an incentive
layer on top of IPFS [1], which can provide storage infrastructure for any data. It is especially useful
for decentralizing data, building and running distributed applications, and implementing smart contracts.

This work:
(a) Introduces the Filecoin Network, gives an overview of the protocol, and walks through several
components in detail.
(b) Formalizes decentralized storage network (DSN) schemes and their properties, then constructs Filecoin
as a DSN.
(c) Introduces a novel class of proof-of-storage schemes called proof-of-replication, which allows proving
that any replica of data is stored in physically independent storage.
(d) Introduces a novel useful-work consensus based on sequential proofs-of-replication and storage as a
measure of power.
(e) Formalizes verifiable markets and constructs two markets, a Storage Market and a Retrieval Market,
which govern how data is written to and read from Filecoin, respectively.
(f) Discusses use cases, connections to other systems, and how to use the protocol.
Note: Filecoin is a work in progress. Active research is under way, and new versions of this paper will
appear at https://filecoin.io. For comments and suggestions, contact us at research@filecoin.io.

Filecoin [Futures] Website
Filecoin [Futures] Whitepaper

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