Why Become a Filecoin Storage Provider?
Over the course of 30 years, the evolution of storage has gone from the direct attached storage provided by hard disk drives to the public cloud services that serve most enterprises today. The next generation of storage will likely continue the trend towards outsourcing these capabilities. However, the business model will change fundamentally as decentralized storage becomes one of the foundational components of Web3 infrastructure.
This is for a good reason. Decentralized storage presents significant advantages when compared to the server-based structures of today, both for clients and for independent service providers. Cloud storage services suffer from a number of pain points that are solvable by the new model.
- Server-based storage is not always verifiable and provides no guarantees of the immutability or preservation of data.
- Pricing for these services is not competitive since the market is cornered.
For service providers:
- Market consolidation has left little room for independent providers’ margins.
- Monopolistic practices such as lock-ins result in barriers to entry for independent contenders as clients have trouble migrating to better options.
Innovations like IPFS’ Content Identifiers (CIDs) and the guarantees in redundancy and persistence provided by Filecoin’s Proof of Storage mechanisms represent important improvements in security, retrievability, and cost-effectiveness. For service providers, Filecoin also presents a new system of incentives that is able to reward them according to their contributions.
Meanwhile, the production of data is not slowing down. IDC projections predicted a 3x increase in data generation from 2020 to 2025, for a total of 125 zettabytes. Eighty percent of this data will be produced by enterprises who currently rely on cloud services for 82% of their needs. The assumption that most of this data will migrate to decentralized operators over time is not far-fetched given their benefits. A lot of it might even be generated in Web3-native environments.
The Advantages of Joining the Filecoin Community
As the need for storage continues to grow and enterprises warm up to the advantages of decentralized Web3-native solutions, the addressable market for the independent service providers who choose the decentralized route is becoming increasingly fertile. There are concrete advantages for service providers who join Filecoin and embrace the transition from cloud storage to decentralized storage:
- Preserving humanity’s most important information. Filecoin’s capability for persistent storage gives providers an opportunity to participate in a meaningful service. The network preserves information for institutions like the Shoah Foundation, Wikipedia, and the Internet Archive.
- Becoming a part of the Web3 wave. The rise of Web3 applications and the adoption of new datasets in the form of NFTs and metaverse assets is creating markets for specific forms of data storage. These needs are met exclusively by decentralized services like Filecoin and are already creating a path-dependency.
- Participating in an open network. The Filecoin Network is designed to be permissionless, with no barriers to entry. Any participant who meets the minimum hardware requirements can be an active contributor and benefit from its economy.
- Receiving incentives for bootstrapping. The community supports new participants with different programs. Some of these include SnapDeals, Filecoin+ and the Filecoin MinerX Fellowship.
- Having greater control over operations. Storage Providers and clients alike have better ways to take charge of their datasets on the Filecoin Network. This ranges from having control over how and where information is stored to how it’s used and monetized.
- Leveraging opportunities for innovation. As a fundamentally new technology, decentralized storage still has a lot of room for experimentation and growth. Storage providers have the chance to explore new cost structures and other differentiators.
- Earning passive income. There are multiple strategies for ROIs when becoming a Storage Provider on the Filecoin Network. Some of these include ways to earn income with your own datasets as explained by Stefaan Vervaet at ESPA’s Filecoin Storage Provider Bootcamp.
On top of these advantages is the fact that Filecoin is expanding beyond storage use cases. Developments like the Filecoin Virtual Machine introduce smart contract capabilities to the network. As the network evolves, Storage Providers will continue to be the bedrock on which it’s built.
How to Become a Storage Provider
If you’re interested in becoming a Filecoin Storage Provider, learn more by exploring these resources:
- Check out the virtual bootcamp with 20+ hours of new video content on how to become a storage provider and earn FIL tokens
- Filecoin documentation on Storage Providers
- Lotus documentation
- Filecoin SP workshop with Magik6k
- A playlist dedicated to Filecoin Storage Providers
- ProtoSchool’s Verifying Storage on Filecoin course
Be sure to also get in touch with the community: