- Nothing in these presentations is investment advice.
- Any models shown in presentations are based on many assumptions, and should not be relied upon as the source of truth. Any estimates should not be relied upon and are for illustrative purposes only. You should build your own models based on the code and the Filecoin spec.
On December 11, ETH Global and Filecon hosted the Storage Market Summit (SMS). A portion of the day was dedicated to Investing in the Filecoin Ecosystem. Below are recaps, themes, and conclusions from different talks during this portion of the day.
What Makes Filecoin Special and Where We’re Going Next
The following is a summary of a talk given by Ryan Zurrer, founder of Dialectic, at SMS. Watch the full recording here.
During Devcon II in Shanghai, Juan gave a demo of Filecoin and was able to show the audience a video that was pulled from beyond the Chinese firewall in HD. Chinese attendees of that talk were shown a technology that solved a really fundamental problem for them, and it’s likely the reason why Filecoin and other Protocol Labs projects have enjoyed such great popularity in China and Asia.
Today, Filecoin is the first decentralized network that is offering the same service as a centralized network at objectively a dramatically lower price. It is cheaper to store files on IPFS with Filecoin than on Dropbox or AWS. That’s huge; that’s crossing the rubicon.
As we look at the success and the implications of this cost-effectiveness of Filecoin and where the team is headed with related technologies, I feel confident in the prediction that by the end of the decade, Protocol Labs will be a larger and more important company globally than Google.
Something we don’t talk about enough when we talk about Filecoin is the energy efficiency of this ecosystem. As an industry, we need to think very deeply about the energy we consume. With Filecoin, we are seeing one of the most energy-efficient networks out there, that is also offering a real world use case that matters to people.
We should recognize that it’s going to take a few years to build out all the layers of apps, tools, wallets, and connective tissue necessary to make this really work. For Ethereum and Bitcoin, it took a few years before we started to see use cases that people really wrapped their arms around. I encourage the community to be patient - but not too patient. Go out and build those important infrastructure components, and you’ll unlock great value in the process.
Some businesses I’d love to see and fund that would tackle pragmatic problems within the Filecoin ecosystem today:
- Supply and demand imbalance. There has been wonderful growth on the supply side of storage, led largely by overseas miners. There is now over 1 EiB of storage. On the flip side, we only have a little more than a petabyte of storage being used on the network. Maybe we should be paying people to store files to bootstrap the network and get a level of demand growing. We could see a decentralized group come together to bootstrap demand and pay people to store their files on Filecoin.
- Pinning Services. We should build white glove services that offer retrieval really quickly and ensure redundancy at a certain level. These services would need to look and feel like Google Drive or Dropbox in their ease of use to make them palatable to the non-crypto native.
- Browser plugin that would allow you to quickly click and save things to a specific content hash or a specific set of hashes based on topical interests.
- DeFi applications, a range of which I believe we’ll quickly see emerge and use the Filecoin network.
The following is a summary of a talk given by Olaf Carlson-wee, founder of Polychain Capital, at SMS. Watch the full recording here.
Now that Filecoin is live and operational, we’re asking the question: what types of businesses will be built on top of Filecoin and what types of businesses are we excited to invest in?
For the first time, we have finally found product-market fit for DAOs with all the recent DeFi products and protocols that have taken off in 2020. Natively on-chain, internet-based corporate structures are supporting these DeFi projects and protocols. Rather than being operated by businesses, these protocols are run by DAOs.
There are, however, limitations of the types of projects that DAOs are sponsoring today on Ethereum. Ethereum is limited largely to mathematical logic. Due to the scaling limitation in its design, Ethereum doesn’t offer the ability to serve complicated data to the end user. Because contracts are doing just math, they do very well for trading, lending, escrow, and basic financial primitives.
With the launch of Filecoin we’re asking the question “what types of businesses will emerge?” I think we will see the rise of Data DAOs. Data DAOs would manage and oversee massive datasets from Filecoin and allow them to be applied to other chains like DeFi on Ethereum.
We could, for example, take massive research sets like genomic databases. Those datasets could effectively be held by Filecoin for a long time with lots of redundancy. All that data could be owned and provisioned by a DAO where the business is offering the data for research purposes.
Overseeing these massive, rich datasets is just the tip of the iceberg. People can use Filecoin to build more expressive applications that go beyond the scope of what DeFi is capable of doing today. This isn’t competitive with DeFi, it’s just expanding the universe of what’s possible.
We are in the very early days of reasoning about how Filecoin can be used to build novel business models. But one thing I think we will see is DAOs become some of the fastest-growing things in the world.
Storage Market Summit wrapped up on December 11, 2020. Watch the full recording on YouTube.