Filecoin is a decentralized storage and retrieval system is built on top of the IPFS (InterPlanetaryFile System). Compared to other storage solutions such as Dropbox, AWS or iCloud, Filecoin is not a centralized authority –users who wish to store data can bid on available storage offered by other participants in the Filecoin network. Filecoin is backed by a blockchain that records commitments made by the participants for storing data.
Participants who store data must submit regular proofs to the network that they are delivering on the terms of their storage deal (so called Proof of Replication and Proof of Spacetime demonstrating that the participant has spent an amount of time keeping the reserved space unaltered).
To ensure that the data being stored in the Filecoin’s network cannot be accessed by malicious actors, Filecoin breaks down the data before storing it. Storage and retrieval of data on the network is paid for with the native token Filecoin (FIL).
Filecoin is often referred to as the Airbnb for cloud storage.