How to Mine Filecoin and Is Mining Filecoin Worth It?

We’ll provide you with several useful resources that will show you how to mine Filecoin. We didn’t attempt to provide a comprehensive guide to mining Filecoin, as the topic is very complex and the official Filecoin documentation is a better place if you’re looking for more specific information.

Before we get you started on the topic of Filecoin mining, let’s first learn the very basics of what Filecoin is and how it operates.

Key highlights:

• Filecoin mining is difficult to access for the average person, as it requires signifcant capital and technical knowledge.
• Even smaller Filecoin mining setups are significantly more complex than what’s required to mine coins such as Monero and Litecoin
• If you’re an everyday user with regular computer hardware, you can contribute to the Filecoin network and earn some extra FIL by installing the Filecoin Station application.

What is Filecoin and what’s the purpose of Filecoin mining?

Filecoin is an open source peer-to-peer file storage network. It implements an incentive system backed by cryptography to help ensure that files on the network are stored reliably and are always available to users.

The price of storing files on Filecoin depends on supply and demand. The storage fees on Filecoin can be quite a bit lower than what’s charged by centralized alternative, as Filecoin provides a truly open market for storing data.

Users who want to store files have to pay storage providers (sometimes called storage miners), which store files and provide proofs that they are available and being stored correctly. Storage providers earn fees both by storing and retrieving data for users, and also by helping secure the Filecoin network in exchange for block rewards. Providers earn more FIL if they provide more storage to the Filecoin network.

In addition to storage providers, there’s also retrieval providers, sometimes referred to as retrieval miners. These retrieval providers ensure that users can retrieve data from the Filecoin network as quickly as possible.

Filecoin can be used for a variety of purposes, for example to store media related to NFTs, long-term storage for archival purposes, or as a cheaper alternative to cloud data storage.

To avoid confusion, we should clarify that the Filecoin project has generally stopped using the term “Filecoin mining” and now refers to Filecoin miners as storage providers, or SPs. So, when you’re looking at Filecoin’s official documentation, you will usually see it refer to “storage providers” instead of “miners”.

However, many users still refer to the process as Filecoin mining. In this article, we refer to the concepts interchangeably.

How to mine Filecoin?

Mining Filecoin is not simple, as you’ll need substantial infrastructure and technical expertise to mine Filecoin profitably. The hardware requirements for becoming a Filecoin storage provider typically can’t be matched by consumer-grade computer hardware.

Here are the hardware requirements for Filecoin storage providers:

• CPU: 8-core processor (Intel SHA Extensions support recommended)
• RAM: 256 GiB
• GPU: Nvidia GPU (at least 11GB VRAM)
• Disk: 2 TB NVMe

In order to function as a storage provider on the Filecoin network, you need to commit at least 10 TiB in storage capacity.

You will of course also need a Filecoin wallet to store the FIL you earn securely. You can use a software wallet such as Trust Wallet, but we recommend using a hardware cryptocurrency wallet such as the Ledger Nano S for much better security.

You don’t need an enterprise-grade Filecoin mining setup to participate in the network, as Filecoin can also accomodate smaller setups. Still, even smaller Filecoin mining setups are significantly more complex than what’s required to mine other cryptocurrencies, for example Litecoin or Monero.

If you are interested in running a solo Filecoin storage provider, the following presentation provides a lot of useful information.

A complete explanation of how to mine Filecoin is beyond the scope of this article. For more details, please consult the official Filecoin documentation, which covers all the necessary steps to becoming a Filecoin storage provider.

If you are serious about becoming a Filecoin storage provider, the official Filecoin website provides a form that you can fill out in order to receive expert advice. You will receive advice based on your internet bandwidth, location, storage capacity and other factors that will influence how your Filecoin mining operation should be set up.

Filecoin mining alternative – Use Filecoin Station to provide your computer’s idle resources and earn FIL

Being a Filecoin storage provider requires a significant amount of capital and technical knowledge. For the everyday user who wants to participate in the Filecoin network, we recommend the Filecoin Station application. In order to participate, simply install Filecoin Station on your computer and set up a Filecoin wallet where you’ll be receiving your rewards.

The Filecoin Station app uses your computer’s underutilized resources, including storage, computational power and bandwidth, to perform tasks that are useful for the Filecoin network (for example, testing retrievals from Filecoin SPs).

You shouldn’t expect to strike it rich by running Filstation on your computer. However, it can be a good option if you’d like to earn some extra FIL and do something useful for the Filecoin network.

Is Filecoin mining worth it?

You have to consider several factors before launching a Filecoin mining operation. It’s important to evaluate how much the hardware and FIL collateral will cost. In many cases, launching a Filecoin storage provider business requires outside investment.

Since the price of FIL fluctuates significantly, it’s difficult to anticipate how much you’ll be earning from Filecoin rewards. You should account for the volatility of FIL when calculating the profitability of Filecoin mining.

There is a helpful Filecoin ROI calculator available online that will make it easier for you to estimate whether Filecoin mining is worth it.

The bottom line – Filecoin mining is not suitable for the average user

Due to its complexity and high requirements, we generally don’t recommend Filecoin mining unless you have strong technical knowledge and access to significant amounts of capital. If you’re looking to mine cryptocurrency by yourself, consider mining a cryptocurrency such as Monero or Litecoin instead.

Just because it might not make sense for you to mine Filecoin, that doesn’t mean you can’t invest in Filecoin in other ways. The simplest way to bet on the success of Filecoin is simply by buying some FIL coins, as they are likely to increase value if the Filecoin network grows in adoption. We’ve even featured Filecoin as one of the best picks for long-term crypto investors.

Source