Hunting Filecoin, explaining the 5 major investment methods

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After repeatedly breaking appointments, the Filecoin mainnet is finally going live.

According to previous official announcements, the Filecoin mainnet will be officially launched at epoch 148888. Based on the current block height, the Filecoin mainnet is expected to go live before 11pm on October 15.

Source: Filscout

Although Filecoin has delayed the mainnet launch time many times before, causing many controversies, with the opening of the second phase of the testnet and the launch of the space race, Filecoin’s popularity this year is still high. After all, it has set the highest fundraising record in the blockchain field , Has received support from top institutions such as Sequoia Capital, DCG, a16z, and the IPFS technology behind Filecoin is regarded as a representative of Web3.0.

After the third Bitcoin halving was completed, the Filecoin mainnet was regarded as the biggest hot spot in the second half of the year. Mining machine manufacturers and exchanges waited for opportunities, and the media was also contributing to the flames. From this perspective, Filecoin’s attention is no less than that of Bitcoin.

However, I have to admit that due to the complexity of Filecoin’s mechanism setup, most investors lack sufficient awareness of it and are even more confused about various investment methods. The Filecoin mainnet is coming soon. We will analyze the opportunities and risks behind each of the five main investment methods to help you clear the fog.

Method 1: Purchase physical mining machine

Like Bitcoin, Filecoin tokens can be obtained through mining.

According to the plan, the total number of Filecoin tokens FIL is 2 billion. In the genesis block distribution, 10% is allocated to early investors (7.5% has been sold, 2.5% is retained), and 20% is allocated to the project party (15% is allocated to the protocol laboratory, 5% is allocated to the Filecoin Foundation) , And the remaining 70% is allocated to miners.

围猎Filecoin,详解5大投资方式

It is not difficult to find that Filecoin is more friendly to the miner community and plans to release the largest percentage of block rewards. However, it should be noted that Filecoin’s mining mechanism is different from Bitcoin mining: Bitcoin mining mainly relies on computing power, and the process of mining is the process of computing the hash algorithm and obtaining the result, which mainly relies on CPU, GPU and ASIC. And other high-end chips; Filecoin miners do not actually need to perform a lot of calculations and consume little power, but they need mining tools with high-quality broadband/Internet speed environment and hard disk performance.

In addition, Filecoin miners include two types, one is storage miners and the other is retrieval miners. Retrieval miners have high requirements on the network. Generally, retail investors participate in storage miners, which means they get block rewards by renting out storage space. Different miners participate in ecological operation under complex mechanism settings.

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Public information shows that the current price of Filecoin mining machines ranges from tens of thousands to hundreds of thousands. Although various mining machine manufacturers will promise to continuously and efficiently dig a higher proportion of FIL in the entire network, industry insiders bluntly say that only 10%-20% of the top manufacturers can fulfill it. Some manufacturers are using Filecoin to scam. The “Snail Interstellar” incident involving a total amount of 2 billion yuan is a typical example.

This actually means that if ordinary investors participate in Filecoin mining by purchasing physical mining machines, they will face considerable challenges. One is that they do not know enough about Filecoin’s operating mechanism. Not only do they fail to mine the expected benefits, but because of the penalty mechanism. Existence and suffer a certain amount of pledge loss. The second is due to the opacity of the market, which makes it easy to fall into the trap set by lawbreakers. In addition, due to the existence of many large miners, it is difficult for small miners to get a piece of the pie.

If ordinary investors still want to buy Filecoin mining machines, it is recommended to study IPFS/Filecoin related knowledge carefully, and consult professionals with relevant experience to select the top mining machine manufacturers in terms of effective computing power.

Method 2: Purchase Filecoin cloud computing power

For ordinary investors, the price of Filecoin mining machines is too high, and the risks are not easy to control. In addition, Filecoin has higher requirements for miners. Not only does it require that the machine cannot be powered off or disconnected, but it also has certain requirements for technical operation and maintenance. The admiral turned away these investors.

Many mining machine manufacturers have launched cloud computing power for this purpose. Generally speaking, Filecoin cloud computing power mining has the advantages of building large-scale mining machine clusters, overall management of power supply, professional bandwidth, and mining machine operation and maintenance. It not only reduces the entry barrier for investors, but also diversifies risks to a certain extent. .

However, the biggest disadvantage of Filecoin cloud computing power is its opacity. Public reports show that this opacity is mainly reflected in two aspects:

(1) Effective computing power and currency production efficiency are not equal. The logic of FIL mining machine investment pursues the highest possible coin production efficiency under unit investment. Under this logic, the FIL output per T will be an important reference indicator for cloud computing power vendors. The optimal solution of effective computing power is just a means, not a goal. If investors want to clearly judge the block-producing strength of the mining machine, they must know the number of FIL mined by the effective computing power of a single T, but this is actually a “black box”.

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(2) Most cloud computing power products require users to pay for the filling process of effective storage. If you buy 1T of cloud computing power, how the time of this 1T computing power will directly affect your investment income, the difference is huge. If the seller reaches 1T according to the effective storage of the mining machine, the miners may enjoy a higher mining yield, and the previous filling time is equivalent to doing a cold start.

In addition, after purchasing so-called cloud computing products, investors have to deal with the risk of the platform side running away. After all, such incidents are not uncommon.

In summary, Filecoin cloud computing power products seem to lower the entry threshold for investors, but there are also many risks. It is recommended that investors seek advantages and avoid disadvantages to avoid unnecessary losses. If investors still want to participate, it is recommended to give priority to cooperation with the head cloud computing platform after comprehensive comparison.

Method 3: Invest in FIL futures

Although Filecoin officials have repeatedly stated that FIL will not be circulated on any exchanges before the mainnet launch, investors are not recommended to invest in FIL futures. However, due to the high popularity of Filecoin, many exchanges have launched FIL futures. There are currently three main types of FIL futures online on major trading platforms:

The first is for institutions or individuals that hold the Filecoin SAFT agreement to cooperate with trading platforms. These platforms may obtain FIL tokens through the SAFT agreement in the future and redeem them with investors.

The second is to cooperate with big miners to redeem platform users through FIL tokens expected to be mined in the future.

The third type is “air currency”. Some platforms sell FIL futures accounting for half of the total, and some platforms have not announced any information about the future redemption source of FIL futures. There are greater risks behind this.

At present, the FIL futures sold by major platforms cannot be circulated with each other, and can be regarded as the internal currency issued by the platform, and the prices are also quite different. Some small platforms have insufficient trading depth and are easy to control, and there are greater risks.

围猎Filecoin,详解5大投资方式

The price of FIL futures varies greatly on different platforms. Source: BitUniverse

Investors also need to note that the FIL futures of the trading platform will be distributed linearly in proportion to the block release rules. For example, FIL6 means that after the Filecoin mainnet is launched, SAFT shares will be distributed linearly for 6 months. Can the platform be timely The payment is still full of unknowns. The Filecoin mainnet will be launched soon, and there will be spot circulation in the market. Therefore, it is not recommended to buy FIL futures, especially those futures products on small platforms.

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Method 4: Invest in FIL contract products

At the exchange level, Filecoin’s attention is not limited to futures. Many platforms have launched various contract products.

Among the leading exchanges, OKEx announced the launch of FIL/USDT perpetual contracts as early as July this year, with a leverage ratio of 0.01-10. It is reported that OKEx’s FIL/USDT index is designed based on the 33% weighting of Gate, Poloniex and OKEx. After the mainnet is launched, the FIL/USDT index will be gradually replaced with exchanges with FIL spot trading and good circulation.

Prior to OKEx, the second-tier exchange Gate and some third- and fourth-tier exchanges have also launched FIL contract products, providing investors with more trading options.

However, it should be noted that, like other contract products, investors can increase leverage while buying FIL contracts, which magnifies the risks while magnifying the returns. It is foreseeable that before and after the Filecoin mainnet is launched, under the long-short game, the contract price will also usher in huge fluctuations, so investors are advised to use leverage carefully.

Method 5: Invest in FIL spot

With the approaching time of Filecoin’s mainnet launch, leading exchanges including OKEx have turned their attention to the spot market.

On October 10th, OKEx announced that it will launch FIL transactions as soon as the Filecoin mainnet is launched, and open deposit and withdrawal services. In addition, OKEx also launched the storage project token display area. The first batch of tokens to enter the display area include BTT, SC, STORJ, LAMB, GNX, CVT and other projects.

Immediately afterwards, other second- and third-tier exchanges have also followed up. It has become the biggest consensus at the exchange level to open the FIL spot market as soon as the Filecoin mainnet goes online.

For ordinary investors, if they choose the first four participation methods, they either have a higher entry barrier or face greater risks, and the risk of investing in spot is relatively small. However, it should be noted that, given that the Filecoin mainnet has been used many times before The postponed launch will probably start this time, but before the last moment, any unexpected situation may occur.

If the Filecoin mainnet goes online on time, it is recommended that investors give priority to trading on the top platform. After all, small exchanges have poor depth, and there are risks such as malicious control of orders and inability to withdraw cash.

Reference materials:

1. Filecoin cloud computing power avoidance guide

2. Why it is said that buying a mining machine is the best choice to invest in Filecoin