Filecoin is a distributed storage network based on the blockchain mechanism. Filecoin miners can provide network storage capacity and obtain Filecoin cryptocurrency by periodically generating proofs (miners are providing encrypted proofs of specified capacity). In addition, Filecoin enables network participants to exchange FIL currency through transactions recorded in the shared ledger on the Filecoin blockchain.

Filecoin does not use Bitcoin's proof of work (POW) to maintain the consensus of the blockchain, but uses the proof of storage itself: the ability of miners in the consensus protocol is proportional to the amount of storage they provide.

The Filecoin blockchain not only maintains a ledger of FIL transactions and accounts, but also implements the Filecoin VM, a replicated state machine that enforces various encrypted contracts and market rules among network participants. These contracts include storage transactions, where clients pay miners in FIL currency in exchange for storing specific file data requested by clients.

Over time, through the distributed organization of the Filecoin VM, storage transactions and other contractual mechanisms recorded on-chain will continue to be processed without further interaction from clients requesting data storage.

1. Data structures are collections of semantically marked data members (for example, structures, interfaces, or types);

2. Functions are calculation processes that do not depend on external states (mathematical functions or programming language functions that do not refer to global variables)

3. Components are sets of functions intended to be represented as a single software unit in an implementation structure. Depending on language and particular component choices, this might correspond to a single software module, a thread or process running some main loop, a disk-backed database, or a variety of other design choices.

4. API is an interface for passing messages to components. For example, a request to the storage miner component of a miner node to store files in the storage market requires the execution of a series of API requests.

5. Nodes are complete software and hardware systems that interact with the protocol. A node may constantly run several of the above components, participate in multiple subsystems, and expose APIs locally and or over the network, depending on the node configuration.

6. Subsystems (subsystems) are the conceptual division of the entire Filecoin protocol, whether in terms of complete protocols (such as storage market or retrieval market), or in terms of functions (such as VM-virtual machine). They do not necessarily correspond to any particular node or software component.

7. Actors are virtual entities embodied in the Filecoin VM state. Protocol participants are similar to participants in smart contracts. A participant has a FIL currency balance and can interact with other participants through the operation of the VM, but does not necessarily correspond to any specific node or software component.

Most of Filecoin's user-facing functions (payments, storage markets, power tables, etc.) are managed through the Filecoin Virtual Machine (Filecoin VM). The network generates a series of blocks and agrees on the correct blockchain. Each block contains a series of state transition messages, and the current checkpoint messages after applying these transitions to the global state.

In the global state there is a set of actors, each with its own private state.

An actor is Filecoin's equivalent of an Ethereum smart contract, essentially an "object" in the Filecoin network, with a state and a set of methods that can be used to interact with it. Each participant has a Filecoin balance, a state pointer, a code CID (marking participant attributes), and a nonce that tracks the number of messages sent by that participant.

There are two ways to call methods on an actor.

First, to call a method as an external participant of the system (that is, an ordinary user using Filecoin), the user must send a signature to the message network and pay a fee message including the corresponding miner. The signature on the message must match the key associated with the account with enough Filecoin to pay for the execution of the message. The fee here is equivalent to the transaction fee in Bitcoin and Ethereum, where it is proportional to the work to process the message (Bitcoin prices a message per byte, Ethereum uses the concept of "gas". We also use "gas" ).

Second, when an actor calls a method on one actor, it can call a method on another actor. However, the only time this could happen is if an actor is invoked by an external user message (Note: an actor invoked by a user may invoke another actor, which then invokes another actor, which the execution layer can execute levels as much as possible).