Cryptocurrency

The Filecoin Controversy: A Detailed Analysis

Working as a leading decentralized storage network, Filecoin is garnering attention from the crypto world for its one-of-a-kind mining pedagogies. The platform is getting a mixed response from the market with big capital groups giving a green signal to the project while others are addressing it as a scam designed for tricking retail investors.

The current situation has created a confusing state for the new entrants in the investment market as they are finding it difficult to decide if they should participate in the Filecoin ecosystem or avoid it for the safety of their funds.

What makes Filecoin Mining Different from Others?

Filecoin mining focuses on a different methodology and adopts a unique work of operation, which is not similar to the general mining paradigm. The system emphasizes to build data centers rather than mining hubs in a legitimate matter to acquire subsidies and preferential status from local governments. It becomes significant for mining centers to get a subsidy from the local governments as this helps in running the project at limited operational costs.

Recently, a local government in China shut stopped the subsidies of a mining hub in Xinjiang, stating it to be a data center. This led to a drastic surge in the prices of electricity, and soon the mine was closed as disputes appeared.

Acquiring loans from banks and utilizing it for the expansion of the business is another drawback hovering the industry. Big companies find it easy to get loans from banks at low-interest rates, but when it comes to small businesses, the scenarios are entirely different. Investing the loaned funds in business is also a challenge for many projects. The domestic demand is low, which poses an urgency for a potential project like Filecoin. All these factors pave the way for the success of Filecoin mining as the natives of China sees a great caliber in it.

One prominent limitation of Filecoin mining is the requirement of costly hardware, including hard disk, CPU, GPU, RAM, high-speed broadband, etc. The retail investors find themselves excluded from the network as it is impossible for them to arrange for the costly hardware amounting to a minimum of $1500. This shifts the obligation to control the price of tokens in the hands of the major players involved, thereby benefitting Filecoin tremendously.

Providers of cloud computing power to retail investors on an urgent basis would relieve the former group from risk-bearing. They would be allowed to control the currency in the long-run while facilitating them to build data centers and sell computing power like present situations.

Filecoin mining can boost the business of hard disk manufacturers as well by popularizing hard disk mining in the realm. The competition in the domain will aggravate as the price of the tokens will shoot upwards. For instance, ETH mining triggered the price of graphic cards when mining became a hotshot money source for many.

The factors mentioned above show how Filecoin mining is a reliable project and is here to stay despite the difficulties imposed. Though it is a relatively small project in the present global economic parameters, it promises to offer profits for the key players. The big enterprises are seeing great potential in Filecoin, and so are supporting it. They are getting large-scale benefits with limited investment. The team is adamant about bringing positive outcomes for retail investors too. It will be interesting to watch how Filecoin builds trust for its system in a larger section of investors and enterprises.

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Scott Cook

Scott Cook got into crypto world since 2010. He has worked as a news writer for three years in some of the foremost publications. He recently joined our team as a crypto news writer. He regularly contributes latest happenings of crypto industry. In addition to that, he is very good at technical analysis.

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