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https://www.filminer.co/blog/mining-structure-interpretation-distribution-and-storage-of-filecoin

Filecoin is an open-source, cloud-based decentralized storage network (DSN) designed to maximize data storage and retrieval. Filecoin network uses a mining, storage and retrieval mechanism to connect storage miners (providers) and retrieval miners (servers) with customers who pay for storage and retrieval data. Network participants receive and send token rewards in the form of Filecoin token (FIL) to provide services on the network.

In order to complete this data exchange and make the network transparent and fair to all users, Filecoin's system uses special encryption certificates to verify the number and type of files on the network. This is intended to help prevent inadvertent changes to files.

Ⅰ. Mining Structure Interpretation of Filecoin

Similar to bitcoin, Filecoin miners compete with each other to mine and create blocks. Compared with bitcoin, Filecoin's mining ability is directly related to active storage. The system aims to create an incentive structure for miners to accumulate as much storage space as possible so that they in turn rent the storage space to customers.

The storage and retrieval of data on Filecoin protocol are directly related to the mining mechanism of the whole system. Filecoin aims to adapt to a decentralized and verifiable market structure, which has two main components: the retrieval market and the storage market. The retrieval market exists under the chain, while the storage market is based on the chain.

Filecoin protocol acts as the nerve center for running order book, allocation table and transaction broadcasting system. The center provides services for the upper and lower parts of the system by sending and receiving order matching and settlement information. Miners and customers can then set their own prices for their services and submit orders to the market. In the whole process, Filecoin network benefits three main types of users:

1. The storage miner that receives tokens by providing storage;

2. Miner receives the token by providing data;

3. Customers who pay for the data storage and retrieval.

Ⅱ. Filecoin Distribution and Storage

Filecoin builds a highly complex cloud-based solution for data storage and retrieval. The balance created by the Filecoin protocol operating on either side of the data storage market (by retrieving and storing data) is critical to ensure transparent and equal access. At the same time, the protocol provides users with incentives to receive FIL tokens based on the provider's mining capacity in proportion to the miner's active storage space.

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