Is Filecoin fork a $500-1000 million business?
On July 17, Bitsha, a cryptocurrency analyst, mentioned on Weibo: “Recently, people who fork Filecoin in the market are undercurrents; as Bitsha knows, there are 4-5 waves of people who want to fork Filecoin. From a strategic point of view, the project team, investors, and miners can successfully fork if two of the three are obtained. One of the three can steal 5-10% of the market value. Therefore, the fork of Filecoin is a 5 -a billion dollar business."
Six days later, when he was talking about his participation in the Filecoin project, he mentioned the Filecoin fork again: "There are more talented people, full of courage, and you can build a team to fork Fliecoin. If you do well, you will be famous all over the world. If you do poorly, tens of thousands of people will Spit at ecological cancer."
Sun Ming, a partner of Fenbushi Capital, mentioned in an interview: "Miners who have invested a lot of hardware resources are promoting the fork of Filecoin."
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Filecoin economic model is not friendly to miners
The core reason why miners want to fork Filecoin is that the Filecoin economic model is very unfavorable to miners.
The pledge and reward and punishment mechanism was proposed at the beginning of the establishment of the Filecoin economic model, which has undergone many adjustments. The last three adjustments have made the mechanism more stringent.
In April of this year, the Filecoin project introduced its thinking on the economic model on its blog, and refined the reward and punishment mechanism. Miners who complete file storage can get corresponding block rewards, and those who fail to store files within the promised period will be punished. This penalty is imposed on the Filecoin collateral pool (locked funds) provided by each Storage Miner. Locked funds include a small amount of upfront FIL, and token rewards from miners.
Miners need to mortgage certain tokens in the early stage. If the mortgage amount meeting causes a shortage of FIL in the early stage, the improvement of the economic model is to transfer some early-stage costs to future block rewards.
The severe punishment mechanism made some miners dissatisfied, and some miners commented that the mechanism was too "rude".
In May, Filecoin made major adjustments to the economic model. According to an article by Li Bai in the currency circle, this adjustment has raised the threshold for miners to leave the market. Filecoin continues to strengthen the miner mortgage mechanism, and a part of the rewards miners dig will be locked. The penalty mechanism has also been changed accordingly. Only when the task of file hosting is completed can the mining reward be unlocked. If miners want to make a profit, they need to have strong computing power and be able to provide stable storage services for a long time.
If this can still be accepted by miners, then the recent concept of "pre-mortgage" has made miners at a loss.
The pre-mortgage is proposed in the latest Calibration version of Filecoin. The pre-mortgage means that for each Sector packaged, a certain amount of FIL needs to be pledged in advance to start mining. The coins mortgaged during encapsulation need to be locked for 180 days, and then released in 180 days.
The consequence of the pre-mortgage is that the liquidity of Filecoin mining is even worse in the early stage.
Li Bai in the currency circle said that a large amount of FIL collateral is required in the early stage, which will force miners to find the official to buy coins, and the long lock-up period will cause most miners to choose to sell coins instead of encapsulation. "The miners have invested money in the hardware, where can they get the money to buy coins?"
Since there is not enough funds to buy coins as collateral, you will lose the qualification for mining. Even if the mortgage funds are saved, it is almost difficult to recover the cost with the small amount of coins issued in the early stage.
Sun Ming said: "The mining output is too small, making it difficult for early miners to obtain enough mining income to maintain operations."
The adjustment of the economic model continues to reduce the income of miners in the early stage, and the voice of miners proposing to fork Filecoin is also getting louder.
Sun Ming believes: "The potential reason for the fork is that the miners protested against Protocol Labs (requiring it to modify the economic model) on the one hand, and on the other hand, the miners were forced to fight to the death."
On the other hand, Li Bai in the currency circle posted a circle of friends to express his attitude. As shown below:
Another very important point is that according to the current reward mechanism, China's Filecoin competition is tantamount to the "college entrance examination".
Taking the Filecoin Big Miner Test Competition as an example, miners can only get rewards if they rank in the top 50 in their region or rank in the top 100 among miners. Looking at the situation of Chinese miners, among the top 10 nodes in the world, 9 are from China. According to people familiar with the matter, about 80% of Filecoin miners are concentrated in China. The fierce competition can be imagined.
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Unaffordable mining cost and threshold
In addition to the economic model of Filecoin, another point that miners complain about is the threshold and cost of Filecoin.
The cost of Filecoin mining investment and the technical threshold of operation make it unaffordable for many miners and mining farms.
Shawn Wang Qingshui, founder of 1475Fund, introduced the high threshold of Filecoin to Beep News.
Filecoin has a severe punishment mechanism, which can ensure the security of the data party, but at the same time, it will bring high thresholds for mining professionalism and operation and maintenance stability.
In order to ensure uninterrupted power supply and network connection, it must be hosted in a high-level IDC computer room. In order to ensure mining efficiency, the network, computing power and storage hardware equipment should not be poor. Therefore, miners need to use a large sum of money to purchase high-end hardware equipment.
Instant window-POST verification submission requires high algorithm and error repair capabilities, and requires a professional algorithm and operation and maintenance team.
In addition, the threshold for Filecoin mining may be above 10T, or even higher.
Entering mining has a threshold of storage capacity, a threshold of technical maintenance, and a large sum of money is required to purchase hardware equipment.
Earlier, a blogger took the Blue Whale Mining Machine as an example to do a cost calculation. Taking 30 mining machines as a cluster calculation, the miners only spent as much as 6 million on the purchase of mining machines. In addition to the cost of computer room construction, operation and maintenance, etc., the cost of Filecoin mining may be more than 10 million yuan.
Wang Qingshui also mentioned the flaws: "Many ordinary mining machines and even servers are unable to participate, which is contrary to the original intention of the project."
Some people in the community expressed their concerns: "I have invested so much, what if there is a problem after Filecoin goes online, it will be a loss."
So some miners are thinking, can the threshold of mining be lowered while ensuring security?
Some miners pointed out that not all mining machines need to be hosted in the IDC computer room. If all the mining machines are placed in the IDC computer room, the cost will be high and it will easily cause waste of resources. If it can be hosted in different computer rooms according to the performance of each mining machine, it can not only ensure safety, but also reduce costs.
Judging from the interview with Beep News, many people in the industry hold a wait-and-see attitude towards the Filecoin fork.
Li Bai in the currency circle said: "There are many people with ideas, but few people can put them into action."
Wang Qingshui believes that any popular big project will be forked. Are BTC and ETH rarely forked? But how many forks can surpass the original version?
Some miners think that the fork is just talk: "Someone will still follow the official game." "Who will write the code for you after the fork? Do you dare to use the code you wrote?"
The Filecoin fork is "undercurrent". As the Filecoin mainnet is approaching, the actions of miners will be more frequent, and we will continue to report. What do you think of the Filecoin fork? Let us know in the comments section.
