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Winklevoss-led Gemini Custody to add Filecoin, trading may be next

decrypt.co 25 February 2020 18:35, UTC
Reading time: ~3 m

Gemini Custody announced today that it would allow customers to store Filecoin when the network is ready. Further, it is working to gain approval from the New York State Department of Financial Services (NYSDFS) to offer Filecoin trading. This represents a win for Filecoin in an ongoing battle of blockchain-based storage providers.

Filecoin is a decentralized storage system that splits up data users want to store and stashes it in different places across the network, thereby guarding against data breaches. Don't worry, though: Through the magic of cryptography, the network can piece it all back together. Everyday users who make storage space available on their computer receive the Filecoin token (FIL) as a reward. Conversely, those who need to buy storage space brandish the token to use the service.

We are thrilled to announce upcoming support for the #custody of Filecoin $FIL. Filecoin is the reward and incentive token of the InterPlanetary File System (“IPFS”), a decentralized cloud storage network ☁️

Learn more about Filecoin here ⬇️https://t.co/cGJUxgYe0i

— Gemini (@Gemini) February 25, 2020

Protocol Labs, which created Filecoin, is also behind the InterPlanetary File System (IPFS). Whereas IPFS is a voluntary open-source system for data storage, Filecoin is meant to incentivize storage. The two protocols are different but work in tandem.

While IPFS has been up and running for a while—it was just integrated into Unstoppable Domains' new decentralized web browser this month, for instance—Filecoin's debut has long been anticipated. It raised $257 million in an initial coin offering from August to September 2017. The mainnet, initially scheduled for the end of 2019, was later pushed to March 2020. It has since been pushed again, this time to between June and July 2020, though worried investors have been able to comfort themselves with a December testnet launch.

What is Filecoin (FIL)?

Apparently, testing has gone well enough to appease Gemini. Its custody solution—a place to store and manage digital assets—currently handles 23 different assets, including the old standards: Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Zcash. Filecoin will be its 24th, though not its first token for decentralized cloud storage—that would be STORJ. The custodian added the Filecoin competitor in November 2019.

It's unclear how much of a market there is for blockchain-based data storage. On February 19, Storj Labs, which raised $30 million across three days in a 2017 ICO, reported that it had paid out $2 million in tokens thus far to community members storing data and that it had 5,500 active "storage node operators." Yet after selling at 50 cents, it's trading at $0.16 as of today, according to CoinMarketCap. By comparison, FIL sold for $5 at the time of its August 2017 ICO. Filecoin Futures are currently selling at $5.05.

A third company is far more troubled. The parent company of Sia settled with the SEC in September 2019 over an unregistered securities offering in 2014. While that's separate from Siacoin, which did not have an ICO, the going price of the latter sits at below $.01; it reports 352 storage providers.

As part of Gemini's announcement, it said Filecoin ICO participants could get their FIL straight into their Gemini custody account as soon as the network goes live.

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