Filecoin Founder: No Major Miners Have Left the Network, They Are Actually 'Making Big Money'

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Filecoin founder Juan posted more than 40 tweets in response to the numerous controversies following the mainnet launch.

Original title: "Filecoin Categorically Denies Any 'Mining Crisis'"

Original source: Decrypt

Original compilation: 0x26

Full Text Summary

Filecoin denied reports of miner riots after the mainnet went live.

Miners complained about the token’s economic model, which they said was not enough to motivate them to continue mining Filecoin.

Filecoin has denied the accusations and offered a new loan program to help miners in need.

The decentralized storage network Filecoin launched its mainnet last week amidst the uproar. But less than 24 hours later, reports of miner riots surfaced, and Filecoin's token, FIL, has fallen by 25%.

The highly anticipated Filecoin offers an alternative to centralized cloud storage providers like AWS.

But BabbittSaid that since Filecoin launched on Thursday, the five largest mining pools have gone on strike amid rumors that they might fork Filecoin. Critics claim that the project's economic model does not provide enough incentives for miners.

Filecoin official rebuttal

Today, Juan Benet, the founder of Filecoin, strenuously opposed these reports.

The official also stated that as far as they know, no large miners have withdrawn from their Filecoin network. “We believe that miners will be highly incentivized to participate in the Filecoin network,” said Ian Darrow, Filecoin business director. "We don't know which miners have gone on strike."

Earlier today, Filecoin officials also released a detailed report, attempting to refute the criticism and offering a new loan program to help any miners in need of support. Protocol Labs, which oversees Filecoin, is working with partners (TBA) to provide microloans to miners from now until the Filecoin lending business matures. "There will be more on this this week," Bennett tweeted today.

Darrow disputed reports of the miners’ strike, saying that miners are still providing storage capacity, adding 2pebibytes (PiB) in the past three hours alone. (One pebibyte is equivalent to about one million gigabytes.) He said, "No large mining pool has indicated that they are going to strike."

“In fact, the Filecoin network continues to grow rapidly, just over 600 PiB today,” Darrow said. “Some miners who had been working for months or years before the project’s mainnet launch did choose to sell the FIL they had mined, and not make additional investments. We don’t know what kind of cash flow these miners might have — their Loans may be coming due, or investors may be under pressure to pay dividends. At the end of the day, we fully respect miners’ choices in how they manage their funds.”

However, Babbitt quoted Chinese Filecoin community celebrities, technology entrepreneurs Lai Chuhang, chairman of the company Space Cloud, said that the miners are "powerless" and no one has money (coins) to continue digging.

Filecoin’s token economic model has been criticized

The Filecoin economic model ensures that miners are rewarded with tokens every day for 180 days, however, miners must provide FIL as collateral to ensure their rewards are honored. Filecoin has established a locking mechanism that requires investors to hold FIL for at least 6 months after the main network goes live.

An anonymous Twitter user, Nico Deva, posted a lengthy post on Sunday carefully criticizing the model .

Many people in China feel sad about Filecoin's token model. A simple calculation shows that while investing $20,000 in the early stage to purchase hardware, you also need to spend money to purchase more Filecoins as collateral. This simply does not conform to the common sense of the basic token economic model, and it is obvious that this 17-year-old "star" project has screwed up.

In Benet's super-long tweet today, he noted that they've been trying for weeks to Miners are allowed to withdraw 25% of the income immediately after completion, so as to alleviate miners' concerns.

"After the mainnet went live, we saw some miners choose to sell some Filecoin tokens, which is completely understandable, since miners have not been profitable for many years, so it is not surprising that they want to reduce the risk slightly before continuing up."

At the same time, he added that almost no big miners have sold all the FIL they produced, and most of them are adding invest. "The end result is the continued growth of the network," he said.

About Filecoin mainnet launch

"Overall, we are very pleased with this very successful launch," Darrow said. “The transition to the mainnet has been smooth and the software is working well — that’s by far the most important thing. Of course, we’ve seen some crazy situations, but given the environment Filecoin is in and the excitement in the community, that’s not the case. It did not exceed our expectations and the situation is stabilizing.”

But despite the best efforts of the team, The price of the token continues to fall. It opened at $26 on Thursday and peaked at $63 before falling to $31, taking its market capitalization down to $539 million from a peak of $952 million.

There are also concerns that Filecoin's token economic model may require further research.