- BitMex’s founder foresaw the convergence of AI and decentralized storage in Filecoin.
- The price of FIL surged, but it failed to establish a trend.
The rising popularity of artificial intelligence (AI) has generated speculation about its potential impacts on the cryptocurrency sector. BitMex’s founder has offered insights into how Filecoin [FIL] stands to gain from the increasing interest in AI.
Realistic or not, here’s FIL’s market cap in BTC’s terms
Filing it in
The coalescence of massive fiat money printing and the rapid adoption of AI is anticipated to form one of the most significant financial bubbles.
According to Arthur Hayes, AI applications require a decentralized storage solution, and Filecoin, with its blockchain-based network, is positioned to fulfill this need.
As the largest decentralized data storage project in terms of storage capacity and total bytes of data stored, Filecoin’s attributes align with AI’s data-hungry nature.
One noteworthy factor in assessing Filecoin’s performance is the stability of its storage capacity. Over the last few months, this metric remained relatively constant, fluctuating between 5.38 and 5.12 PiB (pebibytes).
This stability is essential as it ensures the network can meet large demands for reliable and secure data storage.
Source: Starboard
In the context of network health and functionality, the occurrence of faults is a crucial aspect. Faults emerge when participants within the protocol act incorrectly, necessitating punitive measures.
Various fault types exist within the Filecoin network, including Consensus Faults, Market Faults, and Contract Breaches, all of which contribute to the network’s overall robustness and reliability.
Consensus Faults, for example, can disrupt the agreement mechanism within the network, potentially leading to data inconsistencies or delays. Market Faults might affect the reliability of storage and retrieval deals, hindering users’ experiences.
Contract Breaches can breach the agreed-upon terms, leading to disputes and potential disruptions.
The number of active faults occurring on the network spiked over the last few months. An elevated number of faults can erode trust in the protocol, discouraging users and miners from participating.
It can also increase maintenance and dispute resolution efforts, consuming resources that could be used for network expansion and development.
Source: Starboard
Taking a closer look
Both Web2 and Web3 storage needs are fulfilled by Filecoin, underpinning its demand. A vital indicator of this demand can be discerned by examining the volume of data stored via active storage deals between users and providers on the Filecoin network.
Storage deals, which facilitate data storage and retrieval, provide an avenue for participants like miners and clients to engage with each other, thus sustaining Filecoin’s ecosystem.
Notably, over the past few months, the total number of active deals within the Filecoin protocol experienced substantial growth. At the time of this report, Filecoin had successfully stored more than 1,626.12 PiB through active deals.
This surge underscores Filecoin’s essential role in fulfilling data storage requirements for both centralized and decentralized applications, including AI.
Source: Starboard
Despite all of these positive factors, there were some areas where Filecoin could see improvement. In terms of contract deployment, it was seen that interest in the protocol had started to wane.
According to Starboard’s data, the daily unique contract deployment on the Filecoin protocol fell significantly in the past month.
Only time will tell whether contract deployment on the protocol will rise as a demand for decentralized storage grows.
Source: Starboard
How has FIL reacted?
Filecoin’s price dynamics have also drawn attention to its token. At the time of this report, FIL was trading at $3.1512. This marked a 12.2% increase after testing the $3.127 resistance levels.
However, it’s important to highlight that over the past month, FIL’s price movement was characterized by sideways fluctuations, without any significant trends being firmly established.
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Lastly, the Chaikin Money Flow (CMF) indicated that, despite the price increase, money flows into FIL remained relatively low, with the CMF reading at -0.14.
This suggested that further momentum and investor interest may be needed to propel Filecoin into a more robust position within the cryptocurrency market.
Source: Trading Views