Filecoin Miners Go On Strike One Day After Mainnet Launch, Prompting Early Reward Release – CoinDesk

CoinDesk

Filecoin, a decentralized storage network launched by Protocol Labs, is off to a rocky start after a strike by miners just one day after its highly anticipated miannet launch on Oct. 15. 

Five of its largest miners turned off their machines to protest the project’s “unfair” economic model that requires a significant amount of FIL tokens to start mining operations, according to a report by 8btc.com. 

How To Get Free Crypto  

Zhihu Cloud, one of top five Filecoin miners, has more than 8,000 InterPlanetary File System (IPFS) mining machines yet only 276 mining machines were running on Saturday, while the other four, including mining company 1475, generated even less storage mining power, the report said. 

The project aims to provide its users with decentralized data storage and transmission services through servers offered by its miners with commodity hardware. However, the miners are required to stake a large amount of FIL tokens as “Initial Pledge Collateral” to start their mining operations. 

While Filecoin uses the collateral as a leverage to ensure miners fully deliver their services according to users’ contracts, it creates a situation where the miners don’t have enough FIL tokens to begin with. 

There are two ways to get more tokens but neither of them are desirable. Miners could earn token rewards and put them down as collateral but Filecoin releases the rewards over the course of six months after building a block. As a result, the miners receive very few tokens at the beginning. 

Coinbase Banner  

Miners could also buy FIL tokens from exchanges. However, that could be a very costly and risky move since many believe FIL is currently overvalued and there might be a hefty transaction fee. 

FIL token’s price fluctuated wildly on its opening day, soaring to $100 before settling down to almost $40 with many investors arguing it was still grossly overpriced. 

“All the miners have been off since the mainnet went live, this is not some sort of protest but we have to shut them down because we really don’t have the tokens as collateral to mine,” ST Cloud CEO Chuhang Lai said in the report. 

In response to miner’s concerns, Filecoin has decided to release 25% token rewards in advance once a miner builds a block on the blockchain. “The revision could enable 80% of our mining capacity,” Xiaoming Zhan, CEO at IPSFMain said. 

FreeBitcoin Banner  

Miners have been complaining about Filecoin’s mining economic model long before the mainnet launch and suggested that they should fork the project. 

China has been one of the hottest markets for Filecoin in part due to its unique mining mechanism since the project raised over $200 million in its ICO three years ago. 

Chinese crypto mining companies have purchased tens of millions of dollars of IPFS mining machines that are designed to provide large data storage and computing  power to “seal” and transmit the data. 

Disclosure

Go to Source
Author: David Pan


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.