The FVM: Filecoin's Moment

One of the largest catalysts for Filecoin happened in 2023: the launch of the Filecoin Virtual Machine (FVM). The hype leading up to the launch helped FIL rally nearly 300% in the first half of 2023, but after FVM’s launch, the token slowly drifted back down alongside the broader market. Despite the hype disappearing, the FVM still marks a considerable milestone for the Filecoin ecosystem. Further, the introduction of the FVM has brought up a future need for Interplanetary Consensus, a framework that aims to bring subnet architecture to the network to enhance scalability.

Intro to Filecoin

Launched in October 2020, Filecoin emerged as a peer-to-peer (P2P) network designed to cryptographically store files and economically incentivize data integrity. At a high level, Filecoin users can pay FIL to store their files on storage providers, which are computers tasked with storing files and proving storage. The blockchain opened a market for permissionlessly storing and retrieving files. This can best be explained as a decentralized cloud storage provider. Filecoin relies on the same technology that powers IPFS. IPFS is a P2P distributed storage network that enables permanent and uninterrupted storage of data, abstracting away reliance on external parties, such as AWS.

CCO NFTs, such as Cryptoadz and Punks, rely on IPFS to store the image of their NFTs. The Internet Archive, behind the Wayback Machine, utilizes Filecoin to archive content on the Internet, which enables anybody to see what was displayed on a specific webpage at any stored point in time. The Filecoin network can store everything from text to media, including video and audio files. Users can pay subscription fees in FIL to store and retrieve data, similar to the AWS monthly data storage subscription model.

The Blockchain

Filecoin’s blockchain runs on a chain of tipsets, which are sets of blocks with the same height and parent tipset. This enables multiple storage providers to produce blocks for each epoch, which can enhance network throughput. Every tipset is assigned a weight so that Filecoin’s Expected Consensus (ES) protocol can direct nodes to build on the heaviest chain. ES is a byzantine fault-tolerant consensus protocol that runs secret, fair, and verifiable leader elections at every epoch so that participants can submit a block to the chain. This enhances security for the network by making it infeasible for nodes to purposefully intervene with other nodes to produce blocks. After successful testing, Filecoin will adopt a new Interplanetary Consensus framework, which will enable horizontal scalability through subnets and parallel processing.

Storage providers can mine FIL by providing reliable and persistent storage to the network, which currently has a capacity of 20 exbibytes (EiB), equivalent to 24M terabytes (TB) of data storage. Providers must pledge FIL as collateral for consensus security. Filecoin’s equivalent of an Ethereum smart contract is called an Actor. Actors are objects in the Filecoin network with a state and set of methods that can be used to interact with an Actor.