Bitcoin is the most well-known cryptocurrency on the crypto market. Since its launch, however, many other platforms and tokens have sprouted up.
While it is best to ignore some of these cash-grab projects, there are many others that are worth your time. It can sometimes be difficult to figure out whether a digital asset will be worth your time if you aren’t clued up about the crypto industry.
Thankfully, this is where we come in. We can help you figure out which token or platform you should invest in – this article will compare Bitcoin with Filecoin.
History
When researching which cryptocurrency you should invest in, start with its history. This will help you figure out where and to whom your money will go.
Bitcoin (BTC)
Bitcoin arrived on the scene in 2009 and was the first cryptocurrency to be created. It was founded by an entity formally known as Satoshi Nakamoto, and this could be an individual or multiple people working together.
Unfortunately, there is no way to know for sure, as the creator or creators has/have yet to come to light. The first digital asset was created in response to the global financial crisis that occurred from 2007 to 2009. This is because many people had begun to lose faith in centralized organizations like governments and banks.
Bitcoin was created as an alternative payment system that operates without central control. Token holders can still use it in place of fiat currency.
Filecoin (FIL)
The Filecoin network, on the other hand, is quite newer than Bitcoin, as its whitepaper was only published in 2014 by Juan Benet.
It took a while for the project to get going, though, as Filecoin’s Initial Coin Offering (ICO) would only take place in 2017. However, investors had a lot of faith in the project, as Filecoin raised over $250M with their ICO, which was a record at the time.
The Filecoin blockchain eventually launched in October 2020, so the project has a short history.
What It Does, And Why It Was Created
Understanding what a cryptocurrency does and why it was created can be very beneficial. Not all cryptocurrencies are meant for investment purposes, so it’s good to know their capabilities.
Bitcoin (BTC)
As we mentioned, Bitcoin was created in response to the global recession, as trust in centralized organizations like banks and governments was at an all-time low.
It was initially created to allow people to send money to one another over the internet. It was also supposed to be an alternative to fiat currency that operated independently.
However, this has changed over the years as the value of Bitcoins has increased. Now, people hold on to their Bitcoins in the hope that they will increase in value, so they can sell them later for a profit.
Bitcoin uses a proof-of-work consensus mechanism that requires consumers to lend their hardware to the blockchain to create more blocks. They are rewarded with a percentage of a token, although this was once a number of tokens before the value of Bitcoins increased.
Filecoin (FIL)
The Filecoin network operates differently from Bitcoin. It is a decentralized storage network that lets anyone rent out or buy storage space on the network. It was created as an alternative to other cloud storage providers and used many small, independent storage providers.
It was developed by Protocol Labs and uses a proof-of-replication consensus mechanism. The network operates on top of another protocol that is also involved in storing files in a decentralized manner. This network is called the Interplanetary File System.
In this case, consumers, who are called storage miners, can offer disk space to the Filecoin network in exchange for FIL tokens. Clients also provide storage miners with FIL tokens to store data and retrieve data.
These storage providers don’t have the decryption keys used to access these files. Retrieval miners are another part of the process. They help retrieve data from Filecoin users and are compensated with Filecoin tokens.
To put it simply, the Filecoin protocol provides a decentralized peer-to-peer cloud file storage solution for both businesses and consumers. It also allows those with extra disk space to earn FIL tokens.
Price History
You should always look at the historical data relating to the price of a crypto asset. This can help you determine how the price of a crypto asset has fluctuated in the past and how it may fluctuate in the future.
Bitcoin (BTC)
Bitcoin was the first cryptocurrency on the market, so it wasn’t worth all that much when it first launched. One Bitcoin was only worth a quarter of a cent ($0.0025) back in 2010 as a result.
This price climbed steadily as more people began to learn about the cryptocurrency and its capabilities. This is why by April 2011, one Bitcoin was worth just over $1.
Bitcoin’s price would continue to rise, as it still didn’t have any competition by 2013. This was when one Bitcoin crossed over the $1,000 mark.
After 2013, competitors entered the market, but they did not affect the price of a Bitcoin all that much. 2017 was one of the biggest years for the cryptocurrency, as in November, one Bitcoin would be worth over $10,000, and by December, it increased to $20,000.
Bitcoin tokens would peak in value in November 2021, when a single token was priced at a ridiculous $66,974.77. Unfortunately, 2022 has not been as good of a year for the currency, which is why one Bitcoin is worth $17,129.90 in December 2022.
Filecoin (FIL)
When FIL tokens first went on sale, they had quite a high value as investors were very interested in the project. This is why one FIL token was worth $11.50 during the ICO in 2017.
The price of a FIL token would double in the same month as the ICO, as a FIL token was worth $26.03 by the end of the year. In 2018 the value of FIL tokens would drop to $3, and the price would hover around this point for 2019 as well.
In 2020, the price of a FIL token would increase all the way to $30 by the end of the year. When the crypto industry began to boom in 2021, FIL tokens benefitted hugely. By mid-2021, FIL tokens peaked in value and were worth $186.46 before plummeting in the following months.
Unfortunately, 2022 hasn’t been kind to the crypto industry, and FIL tokens were no exception. This is why one FIL token is worth $4.41 in December 2021.
Market Cap
Market capitalization helps determine the total value of a crypto asset, so it is an important factor to consider.
Bitcoin (BTC)
Bitcoin currently has a market cap of $329.789B. Bitcoin has the highest market cap of any cryptocurrency on the market.
Filecoin (FIL)
Filecoin has a market cap of $1.475B. Filecoin has the 31st highest market cap of any cryptocurrency on the market.
Similarities
- Both Bitcoin and Filecoin are decentralized platforms.
- Both Bitcoin and Filecoin can be bought on crypto exchanges.
Differences
- Filecoin tokens are given as a reward for storage miners offering their disk space to the network. Bitcoin tokens are given to miners who offer their hardware up to the network.
- Filecoin is used to store data, while Bitcoin is used as more of an investment these days.
- Bitcoin uses a proof-of-work consensus mechanism, while Filecoin uses a proof-of-replication consensus mechanism.
Risks
Bitcoin (BTC)
The biggest risk investors face with Bitcoin is the fact that investors can lose their money at a moment’s notice. Bitcoin is, however, the biggest cryptocurrency around, so there is no risk of competitors overtaking it anytime soon.
Filecoin (FIL)
Filecoin offers a unique service, so it is unlikely that its competitors will edge it out. The only risk Filecoin investors face is the fact that the crypto industry is incredibly volatile, so your investment could be lost at a moment’s notice.
Where You Can Buy It
Bitcoin (BTC)
You can easily purchase Bitcoin from:
- PayPal
- eToro
- Kraken
- Robinhood
- Crypto.com
- Coinbase
- Coinmama
- Binance
- Uphold
Filecoin (FIL)
You can purchase FIL tokens from:
How Can You Exchange BTC For FIL
You can exchange Bitcoin tokens for FIL tokens using any crypto exchange that supports both tokens.
Future Plans
Bitcoin (BTC)
While Bitcoin tokens are not worth as much as they were at their peak, many analysts expect this to change. Some analysts predict that 2023 will be big year for the crypto industry, which could see the price of a Bitcoin rise to $60,000 – more or less.
Filecoin (FIL)
While FIL tokens have also decreased in value this year, some analysts have predicted that the value of the coin should steadily increase in 2023. Some analysts have even predicted that a FIL token could be worth up to $50 by 2028.
Sources
https://academy.binance.com/en/articles/what-is-filecoin-fil
https://coinmarketcap.com/currencies/filecoin/markets/
https://capital.com/filecoin-price-prediction-will-fil-go-up
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