Filecoin miners have protested the unfavorable business model of the Filecoin project from Protocol Labs in what appears to be an industrial action strike.
Per a report from Coindesk, the Filecoin miners proceeded on the industrial action primarily because of the project’s rewarding system which aims to release earned tokens months after the operation. This puts a strain on the Filecoin Miner’s operations as a large amount of FIL tokens are needed to effectively conduct their mining operations.
After more than three years of waiting, the Filecoin mainnet finally got launched on Friday, October 16th. The project’s miners compounded the wave of volatility that swept the coin’s price. About five of Filecoin miners shut down their machines on the grounds that the project’s economic model which requires a huge number of FIL tokens is unfair. Among the miners is Zhihu Cloud, a Chinese-based outfit with over 8,000 InterPlanetary File System (IPFS) of which barely 276 was functional as of the Saturday, a day after the project launched. The other four miners as reported saw a significantly lower amount of storage capacity.
With Filecoin’s model, prospective miners are required to stake a huge amount of Filecoins (FIL) which will serve as the ‘Initial Pledge Collateral’ before any mining operations can be commenced. Aside from the huge number of FIL collateral required, the reward system was also faulted by the miners who would have to wait about 6 months after a block is built before getting the anticipated coin reward.
In a bid to quell any form of tension and to get its operations to proceed with optimal efficiency, Protocol Labs has said that it would release 25% of the token reward in advance once a miner successfully builds a block, a move Xiaoming Zhan, CEO at IPSFMain said would aid about 80% of their operations.
Filecoin Miners Also Fear The Coins’ Overpriced Value
Perhaps because of the enormous hype that surrounded the Filecoin project including the coins listing on Kraken and Gemini exchanges before launch caused the coins price to skyrocket up to a $100 after launch. The coins price was unable to sustain this overpriced momentum and is currently settled at $33.08 according to data pulled from Coinpaprika.
With miners probability of getting the Filecoins to enhance their operations largely bound in two ways; the first being in earning it as a reward and the other by purchasing it from exchanges. The Filecoin miners are unwilling to explore the purchasing option as the price of the coin may see a retracement back to a lower value as analysts and observers in the cryptosphere believe the coin is still overvalued even at its current price. An investment in the Filecoin (FIL) tokens may bring significant loss for the miners in the short term, a risk none of the five miners is willing to take.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.