The recent Bitcoin’s bull market performance has reactivated the market demand for BTC mining in which the total amount of computing power has reached the highest level in history.
According to data from BTC.com, the latest average net computing power and the average net computing power for seven days is 65EH/s and 58 EH/s.
Since the end of last year, due to the fall in bitcoin prices, the 14-day average bitcoin mining power has fallen to 36EH/s, and the current level of computing power has risen by nearly 80%.
Line Chart Statistical Analysis
War of Computational Power
The bitcoin mining process refers to a random hash collision until a correct nonce value is found. How many hash collisions a mine can make per second is its “power” value.
The total network computing power is the sum of the computing power of all mining machines participating in competitive mining in the Bitcoin network. The calculation power is directly proportional to the difficulty of mining. When the calculation power increases, the difficulty of mining increases, and the output of unit calculation power decreases within a given time.
Calculating power does not require advanced technology, it can be done by using cheap electricity prices, building of a mine, and finding few people to do mining machine maintenance. Therefore, leading to bitcoin mining been ridiculed as the war of computational power.
However, with the intensification of competition in large-scale mines and the continuous development of new mining machines, the current unit profit of Bitcoin mining machines is getting lower and lower, and small miners have little room for survival.
The Storage Mining of New Blue Ocean
As blockchain technology is rapidly evolving in the world. Juan Benet, the graduand from Stanford University founded the Protocol Labs in May 2014 and released the IPFS project in January 2015 whereby a P2P file transfer protocol is conducted.
IPFS has changed the way searching is done whereby content is used and dispersed into several smaller pieces, that is stored in many servers, to achieve the multi-server synchronous cache, improve download efficiency, and save overall bandwidth
Meanwhile, the primary incentive layer for IPFS is Filecoin, miners will need to go through a series of processes such as bidding, grabbing, and storage to complete mining thus getting the Filecoin reward. At the moment when bitcoin mining has no competitive advantage, Filecoin mining is known as the “New Blue Ocean” for the digital golden age.
Mining Schematic of Filecoin
The Advantages of Storage Mining
➤ In the Filecoin system, after the miner finishes storing, the user will confirm whether the miner has completed its storing. Here, the Filecoin’s consensus mechanism (PoSt) is used to confirm that the miner had completed the storing.
PoSt is generated by Filecoin when verifying that miners store user data. Filecoin converts the miner’s current storage data relative to the entire network to the miner’s voting rights. The network chooses the possibility of a miner creating a new block whereby the storage is directly proportional to the cost of the rest of the network.
By using storage certification (PoSt) to generate consensus without the need of wasting computing resources and energy like Bitcoin, it can encourage miners to invest more storage space (hard disk) resources in a very environmentally efficient way.
Schematic of Filecoin
➤ The essence of Filecoin mining is data storage. The performance of the CPU is not too high. Therefore, the mining machine does not need to be periodically updated. Under normal trials, the life of a product can last for four to five years. It accidentally helps miners to save huge costs!
➤ Filecoin mining requires a large amount of storage space, and another requirement is the highest possible bandwidth channel. Therefore, the mining pool should be built in places with high population density, such as first and second-tier cities and provincial capital cities.
Large scale mining, IDC data rooms in large cities are preferred; Small scale mining, it is a good choice to be placed inside a residential area, even the mining machine in individual houses are equally useful
Bitcoin mines are stationed in remote mountainous areas and border areas all year round while Filecoin mines are in large and medium-sized cities. Here, the working environment and transportation modes are much better. After work, you can still invite your friends to have a drink together, making sure that there is no delay in your career and daily life!
Popular Science | What is the relationship between IPFS and Filecoin?
IPFS is sort of an addressable content, node to node hypermedia distributed storage, transmission protocol, known as “http protocol terminator”.
While the “Filecoin” here can refer to 1. Network, 2. Protocol, 3. Network Token, 4. Project. So, what is the relationship between IPFS and Filecoin?
IPFS and Filecoin
IPFS and Filecoin are complementary protocols, both were created by Protocol Labs.
IPFS allows participants on the network to store, request and transmit verifiable data to each other. IPFS is an open-source that can be downloaded and used for free and has been used by many teams.
With IPFS, each node can store data that they think is important, but there is no easy way to motivate others to join the network or store specific data. In order to solve this critical problem, Filecoin came into being.
Inspired by Filecoin, customers pay to store data, and miners will receive rewards by constantly storing data and encrypting data storage.
As a summary: IPFS addresses and moves based on its content; Filecoin is the missing incentive mechanism here.
Protocol Lab Team
Filecoin also uses many of the IPFS features, such as:
- Filecoin uses IPLD for blockchain data structures
- Filecoin nodes are using libp2p to ensure secure connections
- The transfer of message between nodes and Filecoin block propagation uses libp2p to publish subscriptions
The compatibility between IPFS and Filecoin will be as seamless as possible
❖First question: Is it suitable to use Filecoin or IPFS, and what is the basis for the judgment?
First, Filecoin and IPFS complement each other and have significant cross-compatibility
When using IPFS, users can provide hardware directly or purchase storage from a third party to take responsibility for their storage nodes. On IPFS, individual nodes can store what they think is important; there is no easy way to motivate others to ensure that your data is stored in their system.
If users wish to maintain the storage nodes by itself or collaborate with the store data outside, IPFS will probably be your preferred solution.
If users wish to pay for a competitive price and manage the information store by themselves with a specific redundancy and availability, Filecoin may be your first choice.
❖Second Question: Why use IPFS instead of the existing data storage solution when choosing decentralized storage on Filecoin?
Currently, when we enter a URL to get online information in a web browser, the URL resolves to an IP address. This IP address will find the server where the information sought is stored. Almost every publisher, provider, and service on the web put information in a data center server they control, which makes our network today central.
Filecoin is a decentralized storage network that uses encrypted hash functions to locate and transfer data stored on the network. This network protocol itself ensure that your files are stored. Miners are motivated to use their hard drive space to make money on Filecoin’s verifiable storage market, and they will get the same amount of reward. Here, the more the miner’s store, the more Filecoin token earn.
These new decentralized storage offerings will allow customers to reduce network storage costs and enjoy better storage services. As a decentralized protocol, the data stored on the network and the links to the data are not controlled by a central point. This setting improves security and stability.
Compared to today’s single centralized servers and large content distribution networks. On Filecoin, large-scale information is transferred and stored closer to users, making it faster for information search. On Filecoin, the retrieved data is encrypted by an encryption algorithm, enabling customers to manage and update large amounts of data more efficiently.
Finally, as an open source project, unlike most cloud storage and distribution platforms today, Filecoin software itself is open source, whereby everyone can participate in its verification and promotion. With its continuous upgrade and new features, Filecoin Network can become a network information storage and distribution platform for the public.