The economic model adopted by the Filecoin network caused the miners to go on strike one day after the start of the blockchain in the mainnet
Miners in the Filecoin network are on strike after an economic model that the developers call unfair. According to 8btc.comFive of the biggest miners in the Filecoin network have shut down their machines in protest against the economic model put in place by the developers.
The new economic model requires miners to have a significant amount of FIL coins (native tokens of the Filecoin network) before they can start mining. The report revealed that Zhihu Cloud, one of the top five filecoin miners, had also joined the strike. It operates over 8,000 InterPlanetary File System (IPFS) mining machines. However, due to the protests, the miner only kept 276 mining machines in operation on Saturday. The other four major miners were also generating less electricity on the network, the report added.
The miners’ strike began the day after Mainnet start of the network. According to the developers, the Filecoin network represents an entirely new way of storing and retrieving peer-to-peer data – backed up by cryptographic evidence to ensure that data is uniquely stored and replicated over time. With the help of the network, anyone can participate as a storage provider to monetize their open hard drive space and store valuable information.
Filecoin requires miners to put a significant amount of FIL coins in as “initial pledge collateral” before they can begin mining the network. Filecoin uses the coins staked as leverage to ensure that the miners are providing the required services. However, a situation also arises where the miners do not have enough FIL tokens to start mining.
Miners could receive the FIL tokens as a reward and use them or buy them on cryptocurrency exchanges. However, the developers publish the rewards within six months of creating a block. Also, buying from crypto exchanges for miners can be expensive and defeat the purpose of mining on the network.
Filecoin releases reward early
After the strike of the leading miners The price of Filecoin fell after a 120% increase to $ 60 after the mainnet launched. FIL is down more than 50% and is now trading at $ 30 per coin.
The miners’ strike resulted in developers releasing 25% of token rewards in advance. The miner receives this reward as soon as he has created a block on the blockchain. Miners were pleased with this latest development when Xiaoming Zhan, CEO of IPSFMain, stated that the overhaul would allow them to reach 80% of their mining capacity.
Filecoin’s economic model was criticized even before the mainnet was launched. Some miners suggested sharing the network.