Filecoin is a decentralised storage platform token. What's next for the coin in 2022?
- Filecoin vs bitcoin
- What is Filecoin?
- Filecoin price analysis
- Filecoin price prediction for 2022 and beyond
The value of the filecoin cryptocurrency (FIL) rose by more than 250% from March to early May 2021, as the coin rode the crest of the crypto wave. Since then, crypto has been banned in China, Omicron worries and increasing activity from regulators has caused investor uncertainty. So is FIL coin a good investment and can we make a FIL coin prediction?
Filecoin broke barriers during its ICO launch in 2017, raising more than $257m. With the launch of its long-awaited testnet and mainnet products, it is attracting interest.
In this article, we will look at whether filecoin’s value will go up and canvass some experts’ opinions as to whether it is a worthwhile investment.
What is Filecoin?
Filecoin is an ambitious project that aims to reduce the dependency of cloud storage on centralised systems. It is a storage pool that permits anyone to rent out their hard drive storage space. Filecoin also allows anyone globally to buy the storage they need from the network.
The project began in 2014 as an incentive layer for the InterPlanetary File System, a peer-to-peer storage network. Filecoin is an open protocol and aims to store data in a decentralised way.
The Filecoin ecosystem, along with the blockchain, uses a native governance token – known as FIL – to pay for services on the platform.
Unlike cloud-storage companies such as Cloudflare or Amazon Web Services (AWS), where centralised companies hold the power over data and act as a gatekeeper, Filecoin uses its decentralised nature to give power back to users, as well as making it easy to retrieve and difficult to censor.
Filecoin price analysis
The price of FIL started surging in April 2020 after the announcement of its listing on the Gemini exchange, with high trading volumes. In April 2019, FIL was trading at an average price of $4.50 and broke barriers in the last days of 2020 to trade above $20.
In March, Xinyuan Technology, a computer hardware giant based in Shenzhen, signed a deal to invest in filecoin miners, drawing more attention to the cryptocurrency. Reporters were quoted as saying the Chinese tech firm had invested CNY580m, or more than $89m, in filecoin.
Within days of the announcement, the filecoin price rose more than 250%, trading above $200, and crypto experts said it was just the beginning for the decentralised token.
However, since then the crypto market has been volatile. A flash crash on 7 September saw the FIL price fall by 30% from $118.70 to $78.18. Then, on 24 September, China declared all cryptocurrency transactions illegal, prompting another FIL slump from $72.63 to $51.81.
On 2 November 2021, Chinese police confiscated crypto assets worth $62.5m in a crackdown on an alleged filecoin miner Ponzi scheme, precipitating another fall in the filecoin price – sliding from $66.42 to $59.91 in just a few days. Like many other cryptocurrencies the coin has suffered over the fourth quarter of 2021, on 17 December, filecoin was trading at $35.97.
However, on 16 December New York City's Open Data office announced that they are working with Protocol Labs to put city information on the Filecoin network. This five-year plan will allow NYC to test decentralised storage technology which could improve government operations – boding well for the coin’s longer-term future. December 2021 was a difficult month across the board for crypto, and filecoin was no exception. By 14 January, the coin was valued at $29.49.
Filecoin price prediction for 2022 and beyond
DigitalCoinPrice’s filecoin price prediction estimates that its value will be $39.61 in December of this year. Its long-term filecoin price prediction suggests that it could be $41.51 by January 2023; $43.10 by January 2024; $65.28 by January 2025; and in seven years' time the coin could be worth as much as $123.45.
WalletInvestor forecasts that the filecoin price will be worth $43.38 in a years' time and $98.92 in five years' time.
Longforecast.com is less optimistic, predicting the value of the coin to close in December at $8.86. The filecoin price prediction for 2022 is a downward trend from January onwards and continues to decrease in the coming years to a closing low of $0.071 in February 2026.
Filecoin vs bitcoin
The cloud computing market is already big and growing at a fast pace. However, the market is dominated by a few major players, such as Amazon and Microsoft. These are all part of the centralised network.
With advancing technology, the cloud storage market will expand hugely in the future, which is likely to boost filecoin. By way of contrast, bitcoin is only a digital currency that you can buy, sell or exchange; its value is tied to trading.
According to crypto experts and the token’s technical analysis, filecoin’s value is capable of surging in the future. But when it comes to making a FIL coin prediction, it’s important to remember that crypto markets are very volatile, making it difficult for analysts to accurately call what a coin’s true price will be in the future.
Always be sure to do your own research and never invest more than you can afford.
Instead of contributing computational power, FIL miners contribute storage capacity, that can then be used in deals with clients who are searching for ways to store data.
There are two types of mining in the Filecoin network: storage and retrieval. In storage mining, users earn FIL by storing data for clients and computing cryptographic proofs to validate the integrity of data over time, making sure the data has not been manipulated by the miner.
The chances of reaping the block reward and transaction fees are proportional to the amount of storage the miner contributes to the filecoin network and uptime.
In retrieval mining, users earn FIL by winning bids and mining fees for a particular file, which are solely determined by the market value of the file’s size.
If you are interested in buying filecoin, there are various exchanges that offer an opportunity to trade it. Visit any of the exchanges that support FIL token trading and sign up. Deposit the funds in your account and obtain a cryptocurrency that is listed in a currency pair with filecoin, such as BTC or ETH. Then buy the filecoin token.
Investing in this cryptocurrency is quite simple and there are online and offline wallets that you can use to store your filecoins.
Before investing in any asset, always do your own research or contact your financial adviser before arriving at a decision. Remember that your decision should be based on your attitude to risk, your expertise in this market, the spread of your portfolio and how comfortable you feel about losing money. Never invest more than you can afford to lose and keep in mind that past performance is no guarantee of future returns.