Reputation Systems in Filecoin

Reputation is an essential component of any efficient marketplace: people must have a way to evaluate the quality and trustworthiness of a counterparty before entering into a transaction. Filecoin is no different. However, as a decentralized marketplace and ecosystem, Filecoin, as a protocol, is positioned to support different needs and modes of interactions of its users. As such, there can be multiple reputation systems on Filecoin, meeting the diverse needs of network’s participants. In addition to increasing the efficiency of the network and promoting higher quality service, the diverse and decentralized set of reputation systems on Filecoin is well positioned to support the emerging needs of its users.

A decentralized marketplace needs a variety of reputation systems

All reputation systems use various forms of data collection to generate “ratings” for participants. Such systems are important to the functioning of a marketplace. Platforms such as eBay and Uber construct ratings based on user feedback, allowing people to make informed choices about whom to buy from or ride with. Effective reputation systems build trust between parties, promote quality, and foster loyalty between users and service providers.

It is essential for someone to be able to form a basic judgment of a miner in order to be comfortable entering into any transaction, whether they are storing or retrieving data. Specifically, clients need a way to gauge the quality of miners, and lenders and underwriters must be able to make a judgment about their reliability and creditworthiness. For these reasons, miners on Filecoin must build reputations based on the feedback of users they have worked with. However, depending on the use cases and client demand, metrics and reputation can take many forms. A monolithic reputation system will also be subject to gaming by the network’s participants. As such, reputation systems on Filecoin are diverse and designed to empower clients to express their preferences and promote higher service quality from storage providers as a whole.

During Liftoff week in November, Digital M.O.B. Partner Cezar Paraschiv presented the scope of their solution to Filecoin reputation. By gathering on- and off-chain metrics about miners, DM.O.B. is building a scalable, transparent reputation system that will provide relevant reputation metrics via a public API and web dashboard. Everyone is encouraged to build their own reputation systems for specific use cases.

The fundamentals of reputation on Filecoin

Filecoin’s goal is to bring a decentralized data storage model to people everywhere in the world. The Filecoin reputation system functions as an infrastructure layer that can be integrated into other projects and apps. To that end, it will be available via a public API and web application for ease of use, allowing other app developers to integrate it into their projects.

In doing so, the network will facilitate the emergence of a truly decentralized economy that can be more open, transparent, and accessible than prior systems. In accordance with these goals, Filecoin’s reputation system is designed to be as fair, efficient, and decentralized as possible. To that end, it has been designed around four key tenets: trust, flexibility, customization, and transparency.

Trust

In order for clients to have confidence in their decisions, Filecoin’s reputation system must be reliable and trustworthy. Reputation systems are notoriously susceptible to manipulation. This is mitigated by a diversity of reputation systems and multitude of use cases. Metrics and ratings for a particular use case may not apply to another. Multiple reputation systems also provide a layer of social consensus and cross validation that make the overall system more robust.

Flexibility

The intentions behind a miner’s actions are as important as the actions themselves. A miner who cancels a contract over ethical concerns should not, for example, be treated the same as one who carelessly leaves a client in the lurch. Reputation systems should recognize the fact that not everything is black-and-white. It allows for appeal, follow-up, and investigation where appropriate in order to help ensure that any repercussions or penalties are fair and proportional.

Additionally, as the Filecoin protocol evolves and expands, its reputation systems must be able to adjust and evolve with it. For this reason, the system allows real-time adjustments to the way reputation is evaluated based on future updates to the Filecoin protocol.

Customization

A unique element of Filecoin’s reputation systems is the ability of clients to fine-tune their experiences to fit their specific needs, producing ratings that are not only trustworthy, but useful. Each Filecoin user can choose how much weight to assign to a given metric. For instance, a client who only needs to store a small amount of data will probably not be concerned with storage capacity, but may want to ensure that any potential miner has high uptime and bandwidth retrieval ratings. In this way, Filecoin lets people tailor the reputation settings to their particular needs and goals.

Transparency

Finally, a crucial element to the success of any rating systems is the reputation of the system itself. The moment users no longer trust the ratings, they become useless. Therefore, the complete methodology for calculating user ratings will be made available to the public at all times. As the network grows, any tweaks to the rating systems will be publicly visible, letting anyone verify the criteria by which miners are being evaluated at any given time.

Toward a transparent, trustworthy future

Filecoin’s reputation systems will be key to the continued growth of the ecosystem. Interested parties are encouraged to build different systems and develop trust among parties in a decentralized way, with the goal of increasing the overall quality of Filecoin’s decentralized storage market. With a robust, transparent, and trustworthy reputation system, Filecoin can bring decentralized storage, and the growing decentralized economy, to more people than ever before.

Filecoin is an open-source cloud storage marketplace, protocol, and incentive layer.
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