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https://www.filminer.co/blog/ipfs-and-filecoin-analysis

Filecoin and IPFS are complementary protocols for storing and sharing data in a distributed network. Both systems are free, open source, and share many building blocks, including a data representation format (IPLD) and a network communication protocol (libp2p). While interacting with IPFS does not require the use of Filecoin, all Filecoin nodes are IPFS nodes under the hood and (with some manual configuration) can use libp2p to connect to and fetch data in IPLD format from other IPFS nodes. However, Filecoin nodes do not join or participate in the public IPFS DHT.

This article aims to explain the relationship between IPFS and Filecoin and help users decide which approach is best for their use case.

I. IPFS and Filecoin data storage incentives

IPFS (opens a new window) allows users to store and transmit verifiable content-addressable data in a peer-to-peer network. IPFS users typically persist the data they want on their own IPFS nodes. This is called pinning(opens in new window), and data may sometimes be pinned(opens in new window) using a third-party pinning service or through individual IPFS user groups (like the IPFS Collaborative Cluster). Data exists on the network as long as one user stores it and can be made available to other users when requested by other users.

IPFS alone does not contain a built-in mechanism to incentivize others to store data. This is the challenge Filecoin aims to solve. Built on IPFS, Filecoin aims to create a distributed storage marketplace for long-term storage. Nodes with large storage capacity can rent their storage to users and get paid.

The Filecoin network ensures safe storage of data. However, the processes of storage, verification, and unsealing (referred to as sealing, attestation, and retrieval, respectively) are computationally expensive and can take time. This is especially important for data retrieval, which should be as fast as possible. For this reason, Filecoin enables an additional retrieval market where dedicated nodes can help quickly deliver content from the network for payment by keeping unsealed cached copies. This delivery mechanism may use IPFS, but is still being designed.

Filecoin is designed to increase long-term durability to securely store large batches of data, while IPFS is optimized for fast retrieval and distribution of content.

II. Using IPFS and Filecoin

(1) Content addressing with IPFS

IPFS is great for starting to use content addressing for various distributed web applications. In most instances:

1. The data is provided by the user's own node. Otherwise, one must rely on other peers to store data voluntarily/altruistically or rely on a centralized pinning service.

A centralized IPFS pinning service must be trusted to do its job. IPFS has no built-in provisions to verify that data is stored and served correctly by fixed services.

2. Popular content is easier to access. Popular content (there are many providers) will naturally become faster and easier to retrieve in IPFS, which is useful when there is an external incentive to sync and store data across multiple nodes, and where a strong social contract can be used to ensure that the content remains hosted and long-term.

(2) Use Filecoin for data persistence

Filecoin builds on IPFS' content addressing to increase long-term data persistence using cryptoeconomic incentives. Using Filecoin:

1. Clients make storage transactions with miners to store data. The network verifies that miners are storing the data correctly. Periodic micropayments are made during storage transactions.

2. Miners who do not comply with the storage protocol will be penalized.

3. Content retrieval may be provided by storage miners directly or by specialized retrieval miners. Users requesting data pay for this service.

4. Filecoin is good at storing large amounts of data for long periods of time.

Many solutions combine these two networks to achieve the best of both worlds: IPFS for content addressing and data discovery, and Filecoin for long-term persistence. To achieve this, services such as Powergate back up data on the Filecoin network while ensuring content is discoverable in the IPFS public DHT. Data is always available and quickly retrieved, while also ensuring secure and verifiable backups on the Filecoin network over time.

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