Filecoin: A Decentralized Storage Network

1 filecoin : A Decentralized Storage NetworkProtocol LabsJanuary 2, 2018 AbstractThe internet is in the middle of a revolution: centralized proprietary services are being replaced withdecentralized open ones; trusted parties replaced with verifiable computation; brittle location addressesreplaced with resilient content addresses; inefficient monolithic services replaced with peer-to-peer algo-rithmic markets. Bitcoin, Ethereum, and other blockchain networks have proven the utility of decen-tralized transaction ledgers. These public ledgers process sophisticated smart contract applications andtransact crypto-assets worth tens of billions of dollars. These systems are the first instances of internet-wide Open Services, where participants form a Decentralized Network providing useful services for pay,with no central management or trusted parties.

2 IPFS has proven the utility of content-addressing bydecentralizing the web itself, serving billions of files used across a global peer-to-peer Network . It lib-erates data from silos, survives Network partitions, works offline, routes around censorship, and givespermanence to digital is adecentralized Storage networkthat turns cloud Storage into an algorithmic market. Themarket runs on a blockchain with a native protocol token (also called filecoin ), which miners earnby providing Storage to clients. Conversely, clients spend filecoin hiring miners to store or distributedata. As with Bitcoin, filecoin miners compete to mine blocks with sizable rewards, but filecoin miningpower is proportional to active Storage , which directly provides a useful service to clients (unlike Bitcoinmining, whose usefulness is limited to maintaining blockchain consensus).

3 This creates a powerful incen-tive for miners to amass as much Storage as they can, and rent it out to clients. The protocol weavesthese amassed resources into a self-healing Storage Network that anybody in the world can rely on. Thenetwork achieves robustness by replicating and dispersing content, while automatically detecting andrepairing replica failures. Clients can select replication parameters to protect against different threatmodels. The protocol s cloud Storage Network also provides security, as content is encrypted end-to-endat the client, while Storage providers do not have access to decryption keys. filecoin works as an incentivelayer on top of IPFS [1], which can provide Storage infrastructure for any data. It is especially usefulfor decentralizing data, building and running distributed applications, and implementing smart work:(a) Introduces the filecoin Network , gives an overview of the protocol, and walks through severalcomponents in detail.

4 (b) Formalizesdecentralized Storage Network (DSN) schemes and their properties, then constructs File-coin as aDSN.(c) Introduces a novel class ofproof-of-storageschemes calledproof-of-replication, which allows provingthat any replica of data is stored in physically independent Storage .(d) Introduces a novel useful-work consensus based on sequentialproofs-of-replicationand Storage as ameasure of power.(e) Formalizes verifiable markets and constructs two markets, a Storage Market and a Retrieval Market,which govern how data is written to and read from filecoin , respectively.(f) Discusses use cases, connections to other systems, and how to use the : filecoin is a work in progress. Active research is under way, and new versions of this paper willappear at For comments and suggestions, contact us at Elementary Components.

5 Protocol Overview .. Paper organization ..42 Definition of a Decentralized Storage Fault tolerance .. Properties .. Motivation .. Proof-of-Replication .. Proof-of-Spacetime .. PracticalPoRepandPoSt.. Usage in filecoin ..144 filecoin : Setting .. Data Structures .. Protocol .. Guarantees and Requirements ..215 filecoin Storage and Retrieval Verifiable Markets .. Storage Market .. Retrieval Market ..276 Useful Work Motivation .. filecoin Consensus ..307 Smart Contracts in filecoin .. Integration with other systems ..338 Future On-going Work .. Open Questions .. Proofs and Formal Verification ..352 List of Figures1 Sketch of the filecoin Protocol..62 Illustration of the filecoin Protocol.

6 73 Illustration of the underlying mechanism ..144 Proof-of-ReplicationandProof-of-Spacetim eprotocol sketches ..155 Data Structures in aDSNscheme ..176 Example execution of the FilecoinDSN..217 Description of thePutandGetProtocols in the FilecoinDSN..228 Description of theManageProtocol in the FilecoinDSN..239 Generic protocol forVerifiable Markets..2410 Orders data structures for the Retrieval and Storage Markets ..2611 Detailed Storage Market protocol ..2812 Detailed Retrieval Market protocol ..2913 Leader Election in the Expected Consensus protocol ..3231 IntroductionFilecoin is a protocol token whose blockchain runs on a novel proof, calledProof-of-Spacetime, where blocksare created by miners that are storing data. filecoin protocol provides a data Storage and retrieval servicevia a Network of independent Storage providers that does not rely on a single coordinator, where: (1) clientspay to store and retrieve data, (2) Storage Miners earn tokens by offering Storage (3) Retrieval Miners earntokens by serving Elementary ComponentsThe filecoin protocol builds upon four novel Storage Network (DSN): We provide an abstraction for Network of independentstorage providers to offer Storage and retrieval services (in Section 2).

7 Later, we present the Filecoinprotocol as an incentivized, auditable and verifiableDSNconstruction (in Section 4). : We present two novelProofs-of- Storage (in Section 3): (1)Proof-of-Replicationallows Storage providers to prove that data has beenreplicatedto its own uniquely dedicatedphysical Storage . Enforcing unique physical copies enables a verifier to check that a prover is notdeduplicating multiple copies of the data into the same Storage space; (2)Proof-of-Spacetimeallowsstorage providers to prove they have stored some data throughout a specified amount of Markets: We model Storage requests and retrieval requests as orders in two decentralizedverifiable markets operated by the filecoin Network (in Section 5). Verifiable markets ensure thatpayments are performed when a service has been correctly provided.

8 We present the Storage Marketand the Retrieval Market where miners and clients can respectively submit Storage and retrieval : We show how to construct a usefulProof-of-Workbased onProof-of-Spacetimethat can be used in consensus protocols. Miners do not need to spend wasteful computationto mine blocks, but instead must store data in the Protocol Overview The filecoin protocol is aDecentralized Storage Networkconstruction built on a blockchain and witha native token. Clients spend tokens for storing and retrieving data and miners earn tokens by storingand serving data. The FilecoinDSNhandle Storage and retrieval requests respectively via twoverifiable markets: theStorage Market and the Retrieval Market. Clients and miners set the prices for the services requestedand offered and submit their orders to the markets.

9 The markets are operated by the filecoin Network which employsProof-of-SpacetimeandProof-of-Rep licationto guarantee that miners have correctly stored the data they committed to store. Finally, miners can participate in the creations of new blocks for the underlining blockchain. Theinfluence of a miner over the next block is proportional to the amount of their Storage currently in usein the sketch of the filecoin protocol, using nomenclature defined later within the paper, is shown in Figure 1accompanied with an illustration in Figure Paper organizationThe remainder of this paper is organized as follows. We present our definition of and requirements for atheoreticalDSNscheme in Section 2. In Section 3 we motivate, define, and present ourProof-of-ReplicationandProof-of-Space timeprotocols, used within filecoin to cryptographically verify that data is continuously4stored in accordance with deals made.

10 Section 4 describes the concrete instantiation of the FilecoinDSN,describing data structures, protocols, and the interactions between participants. Section 5 defines and de-scribes the concept of Verifiable Markets, as well as their implementations, the Storage Market and RetrievalMarket. Section 6 motivates and describes the use of theProof-of-Spacetimeprotocol for demonstrating andevaluating a miner s contribution to the Network , which is necessary to extend the blockchain and assignthe block reward. Section 7 provides a brief description of Smart Contracts within the filecoin We concludewith a discussion of future work in Section Protocol SketchNetworkat each epochtin the ledgerL:1. for each new block:(a) check if the block is in the valid format(b) check if all transactions are valid(c) check if all orders are valid(d) check if all proofs are valid(e) check if all pledges are valid(f) discard block, if any of the above fails2.