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A Primer on Filecoin – The Utility Token Everyone Will Need

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Cryptocurrencies have blown up so fast that most people haven’t stopped to consider the varying levels of utility in the various protocols. If you speak to people about cryptocurrencies, they usually get focused on the use case as a digital world currency.

Bitcoin is the most well-known cryptocurrency for this reason. Its use case is as a digital currency that allows for borderless commerce, which means there is a massive audience. At the same time, it means there are a lot of people competing in the same space.

But when you get past the conception of cryptocurrencies having the pure utility of buying goods, the idea of utility tokens becomes possible. The same way that euros are good for buying goods in Europe and Canadian dollars are good for buying goods in Canada, each coin has a certain utility it permits access to.

Utility Tokens Are Aimed at Certain Niches

Ethereum is one such example of a utility token (ether) which is then exchanged for computation, rather than goods. Another token that has received a lot of publicity is Filecoin. In short, Filecoin is an opensource cryptocurrency that was designed to facilitate the sharing of computer storage. You pay in Filecoin for the right to store your data on someone else’s computer.

The idea is so simple, as it is essentially an extension of Uber or Airbnb in that users are able to maximize the utilization rate of their storage systems by renting it out. And once you are in possession of Filecoin, it is easily converable into USD, BTC, or ETH.

At the same time, a marketplace for storage space is created, which results in competition pushing the prices down to make them more affordable.

By creating a market for data storage which is scalable enough to bring a lot of vendors and users to the market, Filecoin has a chance to capitalize on a complex problem with an elegant solution.

Background on Filecoin

The company was founded by Protocol Labs and raised $52 million in its Pre-ICO, followed by $200 million during the full ICO. Protocol Labs is a research, development, and deployment lab that creates network protocols like the ones that support Filecoin.

The ICO was executed in early August and raised money from 2,100+ investors. 30% of the tokens went to the genesis group, and the other 70% went to Filecoin miners. The genesis group was split up between Protocol Labs, investors, and the Filecoin Foundation. The first two parties are self-explanatory, but the 5% that went to Filecoin Foundation can be explained as money that is set aside for the long-term governance of the protocol, as well as community building and partner support.

The Filecoin token, FIL, is used to pay for storage, retrieval, and any other transactions on the network. Like many other tokens, the monetary policy is defined by having a limited supply that is set by the token sale. Just like with Bitcoin, you have minting earning block rewards in order to incentivize miners to maintain the network.

Filecoin’s Competitive Advantage

There are obvious security issues that must be faced. Most people have enough issues putting their data in the cloud, let alone on the computer of someone who is looking to make extra cash. This is why a protocol like Filecoin is necessary.

Centralized applications like Evernote and Dropbox have their own vulnerabilities that have come out over the past few years, and Filecoin can hopefully create a solution that transcends these issues.

By using strong end-to-end encryption, Filecoin makes it impossible for your data to ever be read while it is on another user’s computer. Additionally, you can be assured that none of your data is being stored on Filecoin’s servers, lest they be compromised.

When you deal with hosts on Airbnb, they are still a big part of the process. They set things up and make sure you get the keys and the place is clean. Filecoin works differently than that by handling all the file transfer and payment transactions. In this sense, it is not only decentralized away from there being company error, but also from vendor error or malpractice.

Filecoin Solves a Problem

In conclusion, Filecoin is enabling the reliable storage of data at hypercompetitive prices, by creating a scalable market for storage. Unlike mass cryptocurrencies like Bitcoin, utility tokens have specific uses, which is where all their value comes from.

The result is a coin that is scarce and can be used to purchase storage on others’ computers – a valuable resource in its own right. Filecoin has the right backing and seems to be building towards its goal in a sustainable manner, which makes it a token to watch in the near future.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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2 Comments

  1. tray2002

    February 27, 2018 at 2:23 am

    What are the differences between Filecoin and Siacoin?

  2. ebanhataa

    February 27, 2018 at 4:24 pm

    Great article, but why you don’t even mention SiaCoin or Storj? They were there long before Filecoin and nothing you write about is unique for Filecoin. So is Filecoin nothing but a new copy of the firstmovers in decentralized Storage?

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Monero Price Analysis: Wider Adoption Seen as Bity Adds XMR Support to Their ATM Network

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  • Swiss-based cryptocurrency organization, Bity, has added their support for XMR for use at ATM terminals.
  • XMR/USD trading up on Friday, with gains of over 3% at the time of writing. Despite this, weekly chart view still points to the downside.

XMR/USD is trading in positive territory on Friday, having gained over 3% during the session. This leaves some optimism heading into the weekend, which is normally characterized by lower trading volumes. Trading over the past eight sessions now has been very much choppy, signaling a lack of direction in the underlying market. Any short-term bull runs observed have quickly been sold by the bears, consistently.  The price is trading around the lowest levels since August 2017 and is down over 90% from the start of 2018. Despite the minor relief upside Friday, there still appears to be room for downside in the short term. Once again, price action is largely dictated by technical factors as opposed to fundamental.

Wider XMR Adoption Following Bity Support

Bitly, a Swiss-based cryptocurrency organization, has announced their support for Monero (XMR). They are a cryptocurrency exchange, in addition to operating a network of cryptocurrency ATMs. Their users can instantly and securely transact bitcoin in addition to buying ETH and now XMR with Swiss Francs and Euro. This can be done at physical terminals in Switzerland. Bitly has additional kiosks in Zurich, Zug, Winterthur, Basel, and Lausanne. They note that more locations and additional token support are coming soon.

Technical Review – XMR/USD

XMR/USD 4-hour chart

Price action over the past seven sessions now has been forming a range-block, moving within consolidation mode. This has come after some stabilization, following the chunky sell-off from November through to early December. The current price behavior can also be perceived when looking technically, as a potential bearish flag pattern formation. If playing out to the textbook, another extended move to the downside will be seen.

Downside Targets

XMR/USD weekly chart

The near-term bottom can be eyed at $41.00, which is the floor of the most recent range. A failure of this holding will likely see another wave of selling pressure. Looking further to the downside, the next eyed support is seen at $38.45, which was a key weekly level in July 2017. Lastly, any breach here would invite a drop below the $30.00 mark toward the weekly support at $29.00. This would be the lowest level hit since July 2017, when XMR/USD was in the early stages of the big bull run.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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IOTA Price Analysis: Audi and IOTA Partnership Moving Strong; Price Behaviour Not Reflecting That

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  • IOTA and Audi partnership is said to be progressing forward, according to Audi representative.
  • Price action for IOTA remains tilted to the downside, and a bearish technical set up eyed.

IOTA (MIOTA) price remains very much depressed, in line with current stubborn market conditions. It continues to trade around the lowest levels seen since July 2017, with a lack of slowdown signs for now. Since the start of the year, the price is down a chunky 95%. The bears have the opportunity to run this further south, as there isn’t much in the way of support seen. This is all despite the strong growth fundamental prospects for IOTA.

Audi and IOTA Partnership Moving Strong

Earlier this year, IOTA announced a partnership with Audi Think Tank as the foundation was moving with the development of a permission-less mobility ecosystem. IOTA believes this structure of working is a strong route to understand how automakers are approaching innovation and development. The foundation previously noted that they see it as a great opportunity to incorporate into a new mobility solution, backed by strong suite of skills that Audi associates possess.

An update hit the wires this week, suggesting the Audi and IOTA partnership is progressing forward. The venture development manager at Audi Denkwerkstatt Berlin, Malte Schönfeld, provided some commentary via his LinkedIn account:

“What an awesome experience! The last five months we had a great time at the Audi Denkwerkstatt Berlin. Working in cross functional teams with IOTA on a new project. With the focus on enabling trust for the user in emobility, we pushed a new use case to reality. Stay tuned for further Information.” Matt Schönfeld also sent many thanks to all that are involved with the project, including IOTA founder Dominik Schiener and Alisa Maas, Head of Mobility and Automotive at the IOTA Foundation among others for “putting so much energy & passion into this project.”

Technical Review – IOT/USD

IOTA/USD 4-hour chart

Keeping in mind the decline discussed at the start of this piece, the most recent price behavior remains worrying. As seen via the 4-hour chart view, IOT/USD is moving within a range-block formation. The price is very much within consolidation mode. As a result, it remains at risk of another extended move to the south. It can also be perceived as a potential bearish pennant formation, which technically is subject to a breakout tot the downside.

Downside Targets

IOT/USD weekly chart

Looking at downside levels of potential support, the next area to note would likely be $0.1750. This is a weekly support seen since July 2017, week of 17th. Should this fail to provide any comfort, the next level is eyed at $0.1425, the weekly support for week of 10th July 2017. These moves would be similar to other cryptocurrencies in terms of finding that bottom area. For now, all remains tilted in favor of the market bears.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Binance Coin Price Analysis: BNB Still in Trouble Despite Recent Strong Fundamental Prospects

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  • BNB/USDT moving within an ascending channel formation, subject to a breakout to the downside.
  • There is much anticipation ahead of Binance’s DEX launch, expected in early 2019.

Binance Coin (BNB) has made a decent recovery since being slammed in November and into the early part of December. The price had initially dropped a whopping 58%, before then being able to stabilize most recently on 7th December. Since, BNB has jumped as much as 20% to the upside, moving within an ascending channel formation. However, despite the gains of late, a similar bounce was initially seen on 25th November to 5th December, before another dump. BNB/USDT had tanked a chunky 35%, after this brief period of stabilization.

Strong Fundamental News Flow

The world’s largest exchange by traded volume will some be launching their own decentralized exchange (DEX), expected for early 2019. There is much excitement and buzz across the social media space for this to go live. The development team have already noted that their BNB will be moving from its ERC-20 token status, which is currently on the Ethereum blockchain. As a result, this will be transferred to their own proprietary blockchain, which is set to be called Binance Chain.

In terms of a decentralized exchange, this technology can facilitate a new type of pair matching, allowing users to be able to place orders in addition to trading cryptocurrencies. This can be done without the need of an intermediary institution, managing the ledger or even controlling the user’s funds.

Elsewhere, Binance recently announced that they will be adding a new feature for the benefit and to attract more institutional investors. They will have the facility to create sub-accounts on the Binance exchange. Finally, the company have also exercised further use of their token, BNB, as these can now be used via Tripio to secure bookings.

Technical Review – BNB

BNB/USDT 4-hour chart

Price action over the past six sessions now is moving within an ascending channel formation. This comes after the decent bounce from the low on 7th December, having dropped to a low of $4.1200. At the time BNB/USDT was very much oversold, dropping to 26 via the RSI on the 4-hour time frame. Technically, such moves are subject to a potential breakout to the downside.

Support Levels

BNB/USDT weekly chart

Near-term support should be noted at $4.8000, which is the lower part of the observed ascending channel. Further south, eyes would be on the 7th December low at $4.1200. BNB/USDT is already trading around the lower levels seen since December 2017. Lastly, should the above-mentioned be breached, then a fall to $3.2500 could be on the cards. This is a weekly support seen for 17th December 2017 week commencing.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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