Nico Deva Profile picture
18 Oct, 22 tweets, 7 min read
@filecoin has transitioned from calibration net to mainnet at block 148,888 after a 200M ICO and 3 years of dev.

Within 24h of launch a majority of miners are already on strike and talk about a failed wedding and forks.

Why? (1/n)
Filecoin is very complex and requires high-end hardware, including min 128GB mem.

Example of 1 miner, that is 3 servers with 2 computing and 1 storing, from @6block2
Price is a very high retail $40k (includes hosting and maintenance ), regular prices min. $20k, 350TB (2/n)
Sealing speed is the bottleneck, you can provide a lot of space but with 2 computing servers you can still only seal about 1TB/day for your 336TB of storage, and it can take from 210 to 350 days to use and mine with the actual full space. (3/n)
Meanwhile, you need to stake $FIL as collateral for the space provided, this is a guarantee and is slashed if space commitment not honoured (the goal being to insure that data isn’t lost). But that’s a chicken and egg pb, as nobody has $FIL to start mining and get $FIL. (4/n)
The calibration net solved that by being a final test net, and included a “space race”, aimed at rewarding early miners who invested in expensive hardware for testing, and basically took all the risks, with 1.5M $FIL distributed but vested 540 days (5/n)
Calibration net also allowed miners to start sealing witout having to provide $FIL

Sounds good so far, let's see some numbers. (6/n)
One miner, sealing 1TB/day since 8/27 calibration start, who has sealed about 50TB at mainnet launch on 10/15 (about 1/7 of total capacity), needs 5 FIL/TB =5FIL/day as collateral to keep increasing until reaching full capacity. (7/n)
Current mining returns hovers around 0.25-0.27 FIL/day (

This mining reward is vested for 180d (as per the SAFT agreement) (8/n)
So our 50TB miner is on ramp up to mining capacity but also on ramp to full returns. While on ramp, as of 50/180 days, he gets 50/180 of the reward or 0.075/TB/d, 3.75 $FIL for 50TB.

Wait is that below the 5$FIL/day to keep sealing? (9/n)
Right, miners need to *buy* $FIL to keep ramping up to full capacity, or just stay at 1/7 capacity. (10/n)
Here in China people are disgusted, 恶心, this is the word repeated. A napkin calculation shows you early on that your mining system that requires $20k hardware also forces you to *buy* more coins. In a country where ponzinomics is an art, the 2017 poster boy just ble it (11/n)
Take the largest miner, with 40 PiB of storage, who is around the 1/7 sealed ratio, that means they have 280 PiB of storage space ready, at a total price of $16M. (12/n)
Total network capacity is currently around 600 PiB, for 4200PiB installed, or $240M worth of hardware.
Stop, read it again. $240M worth of hardware, ready at mainnet launch. Not including all the one waiting to be installed. Not some market valuation, real money changed hands, real servers. This is a conservative estimate.
Miners invested early on in that much hardware, but can’t keep ramping up capacity because they are forced to buy $FIL. At $250B fully diluted valuation. (15/n)
Calculations may be off somehow but sure thing is many miners have stopped adding more capacity and drives are idly waiting, as you can see the daily power growth of 0 for many top miners (16/n)
Meanwhile, while all the coins are supposedly vested for periods ranging from 6months minimum to 6y for the team tokens, 1.5M $FIL where sent to Huobi and OkEx, issue ironically raised by Justin Sun. (17/n)
Miners provided huge support to the Filecoin team during the dev years, and now are rekt.

The much anticipated Filecoin launch has turned to a shit show and disappointment. Mood is gloomy around here (18/n)
The liftoff 1-week Zoom event that Filecoin has prepared may look a bit grim. A talk like “how I won the space race” may turn to “how I came to invest $16M in useless servers”. (19/n)
The FIL004 Filecoin improvement proposal aims at changing the vesting for miners from 100% to 75%. You’d get (50/180*75% + 25%)*0.25-0.27 ~= 0.12 FIL/T/d.…
The proposal was accepted (20/n)
After the update your 50TB-filled miner will get you 6$FIL/day, out of which you can either lock 5 and keep ramping capacity and splurge with your 1 FIL/day from your $20k hardware, or just sell everything at the current dumb fully diluted market cap. (21/n)
Anyway, looks like miners got quite rekt. This is doing the news in China, but nobody’s talking about it in the West. Rekt connoisseurs @bneiluj @RektHQ, but also others like @CoinDesk @decryptmedia @MessariCrypto @TheBlock__ could investigate a bit. (22/end)

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Nico Deva

Nico Deva Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!