A Retrospective on Filecoin's Launch

Introduction

After three years of development,Filecoin finally launched its mainnet on October 15, 2020. Filecoin raised $52 million in a pre-sale and a further $205 million in their ICO. They had a dream list of investors from funds like Sequoia Capital, Y Combinator, Digital Currency Group, and Andreessen Horowitz, who shared the vision for a decentralized data storage network and envisioned how the technology could benefit multiple blockchain projects.

The Storage Market

Filecoin is entering a market where Storj and Sia have a working product. According toFilstats.com, which takes a sample of the last 2,500 deals for the average deal time in days, $FIL paid and quantity stored, storage cost is currently $0.018 per GB per year. AWS’ Amazon S3 Standard (a general-purpose storage typically used for frequently accessed data) is 15x more expensive than Filecoin. However, Filecoin’s rates are still highly volatile and two days before the time of writing, storage was 8x more expensive than current rates. Even in existing markets, storage fees vary widely depending on the services required. Amazon’s own S3 Standard is 23x more expensive than its S3 Glacier Deep Archive service for data archiving that is accessed 1-2x a year.

Compared to other decentralized storage solutions, Filecoin’s storage price is between incumbents Sia and Storj (inclusive of upload and download costs). Uploads and downloads are a major additional cost component as data is encrypted, erasure-coded, and spread across uncorrelated nodes.

Below is a comparison of cost across different operators: