Is Filecoin a $257 million Ponzi scheme? [pdf]

There’s a difference between scolding energy usage and pointing out that the design itself, even if efficiency of that design is increased, is what leads to this spiraling energy expenditure that powers massive computational hashing power only to support that currency and nothing else (no other social or technical goals). There are better ways to design such a system to do more than perform endless hashing that is merely self-serving. Furthermore, there could be innovations related to a trustless system that will make bitcoin itself obsolete; the future of bitcoin as leader isn’t guaranteed.

This isn’t related to heating or driving efficiency.

> If that is true for your security model, then encryption is always pointless for you

I don't think that is true.

If your first line of defense is physical security that doesn't mean you don't use crypto. The person who can break your physical security can't necessarily break your crypto. Even if the crypto isn't perfect it may be good enough.

The point is that no one in the real world relies on crypto only. Everyone has a physical security layer and then crypto. That is just a fact of how corp, gov, and concerned individuals manage their data.

A distributed network with untrusted peers would radically change the accepted security model and in a way that I don't think any qualified decision maker would accept.

So maybe you can get consumers to use the network for the same thing they use Backblaze for, but Backblaze is already hella cheap, and I am pretty sure the distributed network will be more expensive, so where is the value prop to the people who don't care or aren't knowledgable about security?

The problem is how do you get the private key engraved without sharing it with the jeweler or whoever?

Hey, great question! (i am filecoin/ipfs/etc employee)

I am going to give some definitions (please chip in case of my misunderstanding) - “nobody likes you”: reputation is not central to Filecoin, so I guess you cannot be “not liked”. Whether you are trusted or not, the clients will pay you only if you have provided a proof of having offered a service. Note: Filecoin has pseudonyms, if for some reasons your address is not liked, you can create a new Filecoin address. So every “not liked” case eventually reduces to being a new user. TL;DR I will assume you mean “a new user”. - “low-performance node”: Filecoin does not require special hardware, but off-the-shelf CPUs, and whether you have 1 or 1000, it should not matter in practice (all the operations are sequential). I wouldn’t consider the amount of storage as “performance”, your node can always participate as a small miner. If by low performance you mean faulty hardware, then you are really not contributing to the network. So I am going to consider “low-performance” to mean slow network connection.

Now, if you are a new node without much track record and with a bad internet connection, you could: - participate as a Storage Miner in the Storage Market (your job will be mainly storing the file and generate proofs offline that you have stored the file, you will need just enough internet connection to be updated with the head of the chain) and every now and then (even with a bad network connection), submit the proofs to the chain. In addition, if you are happy listening to new transactions and have enough storage (unless you consider yourself REALLY lucky), then you can participate to mining Filecoin and earn tokens from transaction fees and mining rewards. My strategy would be to start with lower prices than the rest of the network, if you are also mining, block reward could cover for your lower prices - participate as a Retrieval Miner, you might not be that successful in comparison to fast speed super connected nodes that have incredible amount of storage, BUT you could try to store and serve “rare” files or serve to nodes that are closer to you (since you could become their node of preference)

I took advantage to explain my reasoning so that others could find this helpful too :) I will take a look at the paper, thanks for sharing, there is a lot the community can learn from the first wave of p2p file sharing.

I met Juan back in 2014, where us (Feross, Substack, Max Ogden, Mafintosh, and others) all showed off our P2P projects. How times have changed since then!

I can attest to the usefulness of Filecoin. But I do think you are right in that IPFS is for immutable file/asset storage, and not as efficient for mutable data. David, one of the core teams at IPFS, reached out to me the other week about how CRDTs on top of IPFS can fix that. That is what we have solved, mutable graph data that can update in realtime or offline, across a ad-hoc mesh network.

IPFS is still critical here though, because using our Radix Storage Engine (just released) adapter, we can batch high volume mutable data to disk (aka IPFS) for storage and retrieval, which once fetched gun kicks back into gear and does sync.

Ethereum is just not at this scale yet, last I heard it was doing about 7 transactions per second (and Bitcoin doing 4). We're doing 2K end-to-end (across a 4 peer network hop) table inserts/second! I demo this on stage here: https://youtu.be/nTbUCTgLmkY

In that talk, I also explain how to do load testing across a distributed system in order to verify its correctness, aka do simulations on failures like with Kyle Kingsbury's (Aphyr) Jepsen Tests.

So while Filecoin isn't ready yet, its market cap represents a massive emerging opportunity. If Uber unicorn-ed crowdsourced transportation, imagine what a truly P2P incentivized crowdsourced storage system could do. Remember, all machines need electricity (Bitcoin), computation (Ethereum), storage (filecoin), and bandwidth (what we're tackling, with data sync, and incentives).

If you look at it in that context, it makes sense. Hopefully the crypto-P2P community will deliver :) to keep up with the demand. Cheers!