Source：datacentrenews

Before the mainnet goes live, Filecoin futures and Filecoin mining machines are coming. Suddenly, the market seemed to be full of expectations and discussions about the Filecoin project.

How should we avoid the pits we have stepped on? What issues should be paid attention to when investing in the Filecoin market?

This article analyzes Filecoin mining from a more macro perspective:

• When inspecting a mining machine manufacturer, what should we inspect?

• Which mining machine manufacturer has the largest market share? If everyone chooses him, is that necessarily the best choice?

• Filecoin officials are constantly modifying mining rules and economic models, how should I respond?

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Under the high pre-stake, the amount of coins per 10,000 yuan will become the only standard in the industry

Who is leading the industry rhythm?

Some time ago, a certain media published an article on the explosion of the industry, which clearly stated that "packaging speed per 10,000 yuan" will become the basic indicator for judging a mining machine manufacturer.

Just climbed out of one pit and fell into another pit.

We believe that the most direct indicator should be, how many FILs can be obtained every day for every 10,000 yuan invested should be the only indicator in the industry.

Let me talk about the reason for our inference, because there are many determinants of the amount of FIL that miners will eventually get in addition to the hardware ceiling.

Today, the official preliminary pre-mortgage rules have been confirmed in the latest Calibration version, which means that each sector needs to be pledged in advance with a certain amount of FIL to start mining.

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Currently on the calibration network, the mining formula

Why does the official have to set up a pre-stake? For data security and stability? Then you can take post-mortgage.

The official reason for doing this is to reduce the entry barriers that early miners accumulated effective computing power and quickly erected.

• The official daily distribution of FIL tokens is based on the proportion of effective computing power accumulated by miners in the entire network (it can be understood as the distance traveled by an athlete)

• The effective packaging speed of miners determines the speed of effective computing power growth (it can be understood as the running speed of an athlete)

• Then after the mainnet launch, all the athletes ran forward desperately, and those who wanted to participate in the back saw that they couldn't catch up no matter how they ran, which would cause the problem of insufficient attraction of latecomers.

• Therefore, the official design of the front pledge to slow down the rapid growth of effective computing power of miners.

Conclusion: In this way, the mining manufacturer will not run his mining machine to full capacity unless he has enough coins that can be pledged.

Moreover, the mined coins are likely to continue to be used for subsequent effective computing power growth (expansion), in order to obtain higher effective computing power to mine higher FIL, not necessarily all profits, for continued expansion Still raising profits, this is a strategic issue for mining machine manufacturers.

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Mining machine manufacturers with too high market share will have huge hidden risks

Keeping in mind the point of view that "excessive market share of mining machine manufacturers will cause huge risks", let's first understand a concept, which is the official "upper limit of block production rights" - 20%.

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The small blocks of different colors represent the miner node numbers that get block rewards in each round

Why did the authorities make such a setting?

In fact, in the initial design and last year's development network stage, the official set an average of one block per round. But soon the officials and the miners jointly discovered a problem, that is, there were too many rounds of empty blocks, not only the problem of no block in a single round, but also the time interval between two blocks produced by a single miner was too long.

Therefore, during the second test phase, the official made a very interesting and ingenious design to solve this problem, "Up to 5 miners can get rewards for each round of block generation."

Doing so makes the FIL rewards for miners smoother.

But another problem soon appeared, that is, when your effective computing power is greater than 20%, you can be included in every round of block generation, and your coin production cannot be increased no matter how much you increase the proportion of effective computing power.

This is "20% of the block production rights online", that is to say, if the official reward to miners is 440,000 per day, a miner can only get 88,000 FIL at most, which is the upper limit.

But correspondingly, cloud computing power or mining machine manufacturers did not set their own subscription limit, but instead expanded wildly, with "marketing promotion" and "occupation of the market" everywhere.

Now FIL mining is very high, and most of the mining machines purchased will choose to continue hosting.

In this way, "more computing power or machines sold cannot increase mining efficiency. The only thing that can be done is to dilute the FIL dug out by those previously purchased machines or computing power."

The number of FIL mined per T computing power is diluted (reduced), which is the price of market expansion.

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1T Effective Computing Power Decreases with the Growth of the Whole Network Computing Power (Figure)

In addition to these two reasons, Filecoin's block reward distribution adopts a deflationary economic model. The 1.4 billion coins issued by miners are designed according to the half-life of elements, and continue to decay in units of each round, which means that each round of blocks The rewards are all less than the FIL rewards received in the previous round.

Market expansion and dilution, effective computing power growth squeeze, and block reward attenuation, these three superimposed states together make the effective computing power output per T shrink rapidly.

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Thinking about issues from the perspective of the industry, refusing to focus on mining data

It can be seen from the development history of the project that Filecoin mining and even the Filecoin ecology exist for the IPFS project, so when we think about the progress of the Filecoin project and Filecoin mining, we still have to consider the long-term vision of the IPFS ecological development.

After the Bitcoin system has been in operation for more than five years, a new batch of innovative projects driven by blockchain technology represented by Ethereum began to emerge, and IPFS was also created during this period. "Subverting the HTTP protocol" and "letting human history be recorded forever and never erased", IPFS has a great vision and great ambitions.

A year later, Protocol Labs released Filecoin, an incentive layer blockchain project supporting the IPFS protocol.

The reason why Protocol Labs has set up an incentive mechanism now is to attract enough users to use IPFS to form a powerful IPFS ecosystem. This incentive mechanism can realize the first phase of Filecoin's mission - that is, to make enough miners willing to provide storage space to meet user storage needs. When a large amount of content exists in the IPFS network, a further ecology will be derived, and the second step of demand will be generated, that is, the search demand.

From this point of view, it is easy to understand the official intention to establish a pre-mortgage.

IPFS allows participants in the network to store, request and transfer verifiable data with each other. The Filecoin project, which is based on the IPFS protocol, is an incentive layer on top of IPFS. The vision is to supplement or replace the centralized storage corresponding to HTTP. It aims to solve the node failure of the Internet, increase the resilience of the Internet, and lay a solid foundation for the web3.0 era. Base.

From the development history of the project, it can be seen that Filecoin mining and even the Filecoin ecology exist for the IPFS project. The official overall consideration for the implementation of the Filecoin project is still based on the long-term vision of the IPFS ecological development.

However, the current mining machine manufacturers, including some industry media reports, pay too much attention to the technology of FIL mining and the details of FIL mining, thus ignoring that Filecoin is the ultimate mission to assist IPFS in creating a storage market, and they are getting more and more in the wrong direction. go further.

We know that Filecoin wants to create a decentralized distributed storage market, so that more idle resources can participate.

Well, the current high threshold for miners to participate is obviously contrary to the concept of IPFS, so after the Filecoin mainnet is launched, the hardware participation standard will be lowered step by step. The official has always claimed that it is a good idea to replace the SDR algorithm with the NSE algorithm. proof of.

Mining machine manufacturers should complement their own scalability in advance not only in terms of mining algorithms, but also in terms of the scalability of mining hardware, the construction of mining systems, and the establishment of cluster mining machine architecture and mining pool architecture. This change in the mining environment should be considered from the perspective of industry development.

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Ecological Interpretation and Future Development of Filecoin Industry

The overheating of Filecoin reflects more of its interest attributes, and it has not yet reached the level of long-term value attributes.

However, "heat dissipation" also requires a process, because in fact, every time a hot spot appeared before, there was a "heat dissipation" process, and the process of "heat dissipation" is the process of highlighting the long-term value, so we still look at Filecoin and distribution from the perspective of long-term value storage market.

As far as the popularity of the Filecoin market is concerned, it is not that IPFS has become a hot spot in the market this year, it is more like the blockchain market needs a hot spot to carry everyone's enthusiasm and sustenance.

In the first half of 2020, the cryptocurrency market has not yet seen any hotspots that can be played—the story needs to be big enough, the background needs to be good enough, and the amount of funds needs to be high enough to detonate the enthusiasm of the entire cryptocurrency market and gather everyone’s consensus , at this time Filecoin appeared.

The sales data of the IPFS mining machine market has exceeded 10 billion RMB. This data is only conservative and checkable data. The real precipitation amount may be much larger than this data, and the number of participants has exceeded 300,000. Heat booster.

In addition to the popularity and the amount of funds, the most important thing about Filecoin is that it has achieved "out of the circle", that is, it has jumped out of the encrypted digital currency circle. Strictly speaking, Bitcoin has not yet entered the mainstream business world. Ethereum is close to simulating and reproducing a mainstream business world, but it has not yet completely "out of the circle", while Filecoin has completely embraced the real business world.

Filecoin and IPFS can go out of the circle, which is also the logic of its future cooperation with traditional enterprises:

• Storage itself is a relatively common need, and we've seen browsers like Chrome and Netflix already support IPFS.

• Filecoin itself is an incentive mechanism, and the official has also been adjusting the incentive mechanism. The official is adjusting the incentive weight of effective storage, how to use incentives to maintain its stable operation, and use grants to encourage the community to develop more friendly clients and other tools. To achieve a more high-quality feasibility of the entire network, and this incentive mechanism is also one of the directions for traditional industries to expand business.

• Filecoin miners have strong industrial attributes. Filecoin miners are not the same as Bitcoin miners. They not only have financial attributes, they are not just mining a coin, they have a lot of demand for data storage, and how to pass incentives Card revitalizing the entire ecology also has a strong reference for traditional fields.

We can use FIL as a means of payment for distributed cloud storage space. According to an industry report in 2019, the current global cloud storage market space is about 50 billion US dollars, and the annual compound growth rate is 20%. However, distributed It is unclear how much the storage market will account for in the cloud storage market, but based on this benchmark, the story that Filecoin can tell is very large.

The future market prospect and ecology of Filecoin can be seen from the horizontal and vertical dimensions of Filecoin's ecology.

Horizontal refers to the layout of Filecoin in mining-related fields. Filecoin’s main participants now include mining machines, mine farms, mining pools, exchanges, and there may be asset custodians in the future. This industry is gradually shifting from early technical barriers to Capital barriers, thus becoming a capital-intensive industry.

From a vertical perspective, it is mainly the distributed cloud storage service architecture. The underlying technology of distributed cloud storage must be the IPFS network itself; the second layer is Filecoin, which is the IPFS incentive layer; the third layer is related to tools, which are some friendly customers end and storage technology services; the fourth layer is the distributed storage application itself, which may be combined with some traditional projects. Currently, distributed storage is generally used by some browsers or streaming media, and their storage requirements are relatively large. Large, it will support the field of distributed storage.

In the post-Filecoin era, when storage + computing is perfectly realized, at this time Filecoin has become a bridge between the blockchain world and traditional business society through "storage", and a more complex decentralized ecology has emerged. Filecoin urgently needs to integrate with other computing At this time, Filecoin will also provide more meanings of decentralized storage