The recent rise in Filecoin prices has brought the attention of many investment enthusiasts back to the Filecoin project itself. What is the reason for the rise, especially with the general depression of the crypto market environment as the background?
There are numerous new cryptocurrency projects that can be discovered every day. Filecoin is a Protocol Labs initiative that acts as the decentralized storage provider, storing data on a distributed network of thousands of nodes worldwide. With its decentralized file storage system and growing functionality, the network has progressively taken a leading position in the industry.
Fundamental Overview
The FIL price increased perpendicularly in late July, rising over 110% to its recent record high of $11.39.
The Filecoin Foundation revealed the specifics of its support for the Harvard Library Innovation Lab in late July (LIL); The first unlisted retail funds in Australia were introduced by the digital asset venture capital company Holon Global Investments with the launch of three new cryptocurrency funds: Bitcoin (BTC), Ethereum (ETH), and Filecoin (FIL).
While it is not certain that the positive news directly leads to this rise, they clarify some signals for the storage market for sure. Large institutions continue to seek risk diversification and flexible investment aims and are bullish on high-performing assets like BTCÐ. Moreover, the development of Web3 applications cannot be implemented without large data storage. The fact is that IPFS/Filecoin has been recognized by the market and various organizations, which is why it has led to more cooperation and investments.
There are always market factors that can affect the fluctuation of the coin price. It's not just every rise or good news that gives confidence to investors holding Filecoin, but what keeps Filecoin in bullish shape is the continued development of its underlying fundamentals as follows.
The launch of FVM opens a new chapter for Filecoin
FVM can bring a whole new story to FIL with the basic model of distributed ledger + smart contract computing + IPFS data storage, and web 3.0 ecology building. The Filecoin protocol was initially developed as an incentive layer for the Interplanetary File System (IPFS), a peer-to-peer storage network. Filecoin is an open protocol that builds on the properties of IPFS, while FVM is a virtual machine introduced by Filecoin that is compatible with EtherChannel EVM. Simply put, FIL will make an Ethereum-like public chain, similar to BSC, and many Ethereum applications can be directly panned to the FIL ecosystem.
The FVM adds programmability and compatibility to Filecoin, enabling users to implement their smart contracts on the Filecoin blockchain. We believe that Filecoin with FVM will continue to boost the entire ecosystem.
Useful data storage is the focus of Filecoin
The key efforts at the early stage of the Filecoin ecosystem's development are to get storage operators involved, set up more storage nodes, expand the available capacity, and lay the groundwork for commercial operations. At this point, there are no particular requirements for the data stored, and the goal of storing all forms of data is to identify and fix faults, enhance supervision, and create a structure with rules.
There is no doubt that the value of the data stored on Filecoin determines the value of the Filecoin network. To accelerate the realization of Filecoin's goal of becoming the most important decentralized storage network for humanity, the Filecoin Plus program was launched. Storage ecosystem participants (Root key-holders, notaries, clients, and storage providers) interact with each other through DataCap allocations and spending. It allows participants to earn 10x block rewards through Filecoin Plus. This establishes a mechanism that encourages all participants to increase the usefulness of Filecoin.
In addition, Filecoin Plus has enabled two services---NFT Storage and Web3 Storage, and both are essentially free on Filecoin at no additional charge to users. These initiatives have significantly increased the storage capacity and utilization of the Filecoin network.
According to the latest official update, the Filecoin ecosystem is in healthy growth, with over 18 EiB of network storage capacity and over 1,835 new projects currently added to build on Filecoin. Filecoin is also widely used in various aspects, including NFT, Web3, gaming, metaverse, and audio/video.
The popularity of decentralized storage solutions and the addition of smart contracts developed on top of them may pave the way for future cutting-edge web3 applications. Open data and decentralized computing may enable the next generation of applications. If the development of web3 is incremental in its demand for fast, affordable and secure storage, it will bring even more value to FIL. We believe that in such a virtuous cycle, the value of Filecoin will soar.