Why Cryptocurrency Filecoin Is Plunging Today

© Provided by The Motley Fool Why Cryptocurrency Filecoin Is Plunging Today

What happened

Filecoin (CRYPTO: FIL) is down 10.23% in the past 24 hours to $99.13 per token as of 10:17 a.m. EDT on Tuesday. Investors are locking in profits after a stellar bull run sent Filecoin soaring 30% in the past seven days.

Filecoin is a decentralized storage token created by Protocol Labs in 2014. Think of it as self-storage for digital assets. Through its novel proof of replication and proof of spacetime consensus protocol, nodes on the network verify that they are pledging their disc space for users to rent for a specific length of time. They then compete with other nodes to ensure customers are getting the best price possible and receive deal fees in the process in the form of Filecoin tokens.

© Getty Images Concept of an artificial intelligence network in cyberspace.

So what 

After a series of delays, Filecoin’s main network finally launched in October of last year. The blockchain platform has scaled monstrously since then. Right now, hundreds of Filecoin nodes are providing 12 exabytes (or 12 billion gigabytes) worth of data storage, which is roughly equivalent to the entire storage space of Alphabet‘s Google Cloud in 2017. So there’s definitely a lot of potential for it to grow.

Load Error

Now what  

Unfortunately, while the supply is there, the demand hasn’t really caught up. Since launch, the network has only seen 2.4 million storage requests, not users, which is pretty small. Meanwhile, the token’s market cap has skyrocketed to $10 billion, so it was long due for a correction. But keep Filecoin on your watch list in case one day it falls low enough for bargain hunting. 

SPONSORED:

10 stocks we like better than Filecoin

When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now… and Filecoin wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of August 9, 2021

 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy.

Continue Reading