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Miners are running from the Filecoin network ...

Miners are fleeing the Filecoin network due to an unfair economic model
CONTENT

  • Filecoin miners find themselves in a stalemate due to FIL token dump

  • The number of mining farms has decreased from 8 thousand to 276 units

  • Cryptocurrency community is in no rush to buy FIL due to possible price manipulation

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Cryptocurrency miners reduced the number of mining farms on the Filecoin network due to the unfair economic model of the project

Miners are running from the Filecoin network ...

Filecoin decentralized storage network faced a strike from cryptocurrency miners just a day after the highly anticipated mainnet launch. The first to notice the strike was the Chinese edition of 8btc.com.

One of the largest miners of the Filecoin network, Zhihu Cloud, has reduced the number of operating mining farms from 8 thousand to 276 due to the project’s “unfair” economic model, which requires a significant number of FIL tokens to start mining. A Twitter user under the pseudonym Niko Deva said that miners are already discussing a possible forkIn the cryptocurrency world, a fork is, in fact, a change in the blockchain protocol. Since cryptocurrencies operate on decentralized networks, all parties … More of the Filecoin network.

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The miners were particularly concerned about the release of 1.5 million FIL tokens to cryptocurrency exchanges almost immediately after launch. Miners who spent a large amount of funds on expensive equipment (from $ 20 thousand to enter the FIL mining market) are worried about the FIL price dump.

Source: coinmarketcap.com

At the peak of its popularity, the price of the FIL cryptocurrency was more than $ 100, but at the time of writing, it had fallen to $ 31.8.

Miners are running from the Filecoin network ...

Stalemate

Filecoin uses what’s called Interplanetary File System (IPFS) technology, which allows users to rent unused hard drive space for storage and offer their own for hosting content..

“All miners have been disconnected since the launch of the mainnet network. This is not some kind of protest, but we have to stop [mining], because we really do not have tokens as collateral, ”said Chuhan Lai, CEO of one of the ST Cloud mining centers..

However, miners providing their expensive storage must first provide a large number of FIL tokens as “initial collateral”.

The deposit is required to guarantee the provision of the service in accordance with the users’ requests.

Revalued asset

The catch is that so far there are only two ways to get FIL tokens: through mining (a reward every six months), but the amount of reward is too small at the moment, or buying FIL tokens on a cryptocurrency exchange. The latter option is also not suitable, as the community believes that FIL may now be overrated.

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At the start, Filecoin made such a splash in the decentralized finance segment (DeFiDecentralized finance (DeFi) is financial services built on the basis of blockchain technology that offer users access to an open, efficient and … More) that many experts in the cryptocurrency market doubted the naturalness of the market capitalization of the project. At the same time, the head of the Messari research group, Eric Turner, said that the fair price of the FIL token hovers around $ 19.

Miners are running from the Filecoin network ...

Recall that in 2017 Filecoin attracted investments of $ 200 million through an initial coin offering (ICO).

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