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Definition: Filecoin

A blockchain-based decentralized storage network that is based on the IPFS file system (see IPFS). Introduced in 2014, Filecoin is a distributed system like Bitcoin but uses unique "proof-of-replication" (PoRep) and "proof-of-spacetime" (PoSt) consensus mechanisms designed for decentralized storage. Users pay storage miners small amounts of Filecoin crypto (FIL) to store and retrieve their files, and validators continuously verify that files are stored correctly.

Filecoin vs. Cloud Storage
Like all public blockchains, anyone willing to commit a computer and storage can participate. Cloud storage services such as Amazon S3 and Google Cloud have their own datacenters and fixed prices for storage and retrieval, whereas global Filecoin providers can be very competitive. See permissionless.

Filecoin vs. Bitcoin
Like Bitcoin, miners with the most storage have the most power. However there are differences. Filecoin mining is performed without incurring huge amounts of electricity, and they are penalized for downtime, whereas Bitcoin miners are not. Filecoin miners can participate with an ordinary computer and GPU rather than the specialized ASIC hardware that Bitcoin requires. See Bitcoin and crypto glossary.