Following the recent crypto crash, the hype around cryptocurrencies has understandably died down. However, given the many benefits and adoptions of crypto, investors continue to explore more cryptocurrency avenues. One such digital asset that’s been receiving significant buzz is Filecoin. Launched by Protocol Labs in 2020, Filecoin is a decentralized file hosting service. It’s hosted on the blockchain and allows users to rent drive space, similar to the cloud. The service had a slow start, trading between $20 and $30. But Cryptopolitan predicts that it will reach $47 this year — a proof of its investment potential.
Still, should you be investing in Filecoin this early into its life cycle? Let us look at some factors:
Despite being a newcomer, Filecoin’s overall growth trend looks favorable. As of 2022 reports, Filecoin has over 21 million uploads stored across over 16,000 users. There are many reasons for this, though it is mostly due to new developments. For example, Filecoin was able to provide many NFT developers with storage for their assets. Called Niftysave, this project will guarantee that no NFT data is lost when saving NFT metadata onto Filecoin. To date, Filecoin has already implemented five network upgrades and shipped 12 investment proposals to increase storage capacity, usage, and bandwidth since its launch. This includes the off-chain verification of proofs and a mechanism for the easy inclusion of new data.
Increased interest in online storage
The events of the last two years have forced companies and organizations to move their data online if they want to keep operating (and remotely at that). Surveys on TechJury even reveal that 57% of organizations plan to migrate their workloads onto the cloud within the year. After all, online storage offers a ton of benefits, such as near-infinite data capacity and better security. As a direct competitor to cloud technology, the growth of Filecoin will only continue. In fact, as of August 2022, Filecoin has already increased its storage capacity by 128% in this quarter alone.
Investment in renewable energy
A large amount of energy is needed to run the blockchain. Case in point, Bitcoin’s yearly energy consumption alone is almost equivalent to that of a small country like Sweden. Fortunately, Filecoin aims to be different from its competitors. Reports reveal that Filecoin is planning to invest in solar development with Nelnet to slowly transition its computing processes to renewable energy. Filecoin’s developers are also creating something called “Filecoin Green,” a verifiably sustainable blockchain. In June 2022, Filecoin Green announced the launch of its $1 million Regenerative Finance (ReFi) Green Grants Program. The program aims to support projects that champion carbon-neutral finance structures. Such initiatives have the potential to attract more investors, which will increase its growth and decrease its volatility.
Is Filecoin a good investment?
Filecoin has shown sustained growth despite being a new player in the turbulent crypto market. If you buy Filecoin today and wait a couple of years before selling it, you are likely to make a profit as its profile grows. After all, there is a clear demand for its technology and further developments are on the way. As a matter of fact, analysts at The Defiant believe that Filecoin is poised to play a larger role in the decentralized data storage industry. In the near future, many believe that Filecoin will be dipping into smart contract capabilities, further cementing its relevance and use.
Does Filecoin’s future look secure?
In all honesty, there is no real way to predict how any asset (let alone digital ones) will perform in the coming months. If the crypto dip has proved anything, it is that no digital asset is untouchable. To illustrate, just this August, the mighty Bitcoin dropped in value again. This was following statements from Federal Reserve Chair Jerome Powell about continued hikes in interest rates. That said, Filecoin does have the distinct advantage of offering an actual service. Unlike its fungible peers, Filecoin is not just based on speculative value. As such, experts estimate that Filecoin price may jump from about $6 today to nearly $70 by 2030.
Currently, Filecoin may not the household name that Bitcoin, Ethereum, and even Dogecoin are. However, considering its diverse usage and long-term digital roadmap, it may soon become a market leader worth investing in.