How Filecoin helps make the case for cryptocurrencies in Washington, D.C.
Recent government antitrust action against Google highlights what many in the tech world feel: certain companies have much too much control over how we conduct our business online. Sometimes this concern is mitigated by focusing on the benefits of Big Tech’s growing power: cost, ease of use, and lessening the cognitive burden of consumers. And whereas the U.S. government has recently taken a long-anticipated step towards questioning the power of Google (and perhaps other big companies, in the future), this action may take years to filter down to the lives of the everyday consumer. However, there are projects, particularly in the blockchain economy, that may offer more ready antidotes to some of the power accrued by these tech giants. One such project is Filecoin, a network that aims to be the next-generation marketplace for data storage and retrieval. The project officially launched this month and it’s worth considering how it may play in the broader anti-monopoly and Big Tech-scrutinizing mood that is currently circulating in Washington, D.C.
While the fate of the case against Google will take time to become clear, Amazon has built up dominance in another big market: that of web services and digital storage. Amazon Web Services (AWS) controls, by some estimates, roughly 40 percent of the cloud storage market, running the backend for Netflix, Pinterest, Slack and dozens of other services. When the system crashes, as it has on at least a couple of occasions over the past two years, it can feel as if the entire Internet has stopped working. Filecoin may be able to solve some of this problem by offering a new way to store information online: a decentralized cloud. Powered by a native cryptocurrency, Filecoin is designed to store the world’s most important information, giving network users the choice of thousands of geographically distributed storage providers. This global, decentralized storage market, where storage providers can get rewarded by providing valuable storage space for network users, is a more robust model, and less susceptible to multi-point system failures (as with AWS).
Founder Juan Benet has noted that the demand for online storage is likely to continue to grow at a robust rate over the coming years. Providing proven redundancy, efficiency, and accessibility (as well as competing on price) is key to building a system that can nimbly respond to that global demand. As Benet noted, the Filecoin network is designed to take advantage of a fundamentally inefficient use of digital space: “You can bring online a massive amount of supply, which will bring down the costs of storage.”
So, it’s clear that this network has the potential to solve a market problem and change the way we store our information online. But how does that goal intersect with the way D.C. policymakers think about the power of Big Tech companies? There is certainly bipartisan consensus that Big Tech has too much power, though the two parties disagree about why this is.
At the same time, there’s burgeoning support for companies and projects that operate in what we might call the crypto economy. Many policymakers and regulators have sharpened their understanding of what exactly the future of crypto’s impact may be, though the majority of Senate and House members are not well-informed, or take cues from those that are actively hostile to digital currencies.
This is exactly why a project like Filecoin may grab the attention of the curious but not yet converted members of government. By providing a useful service that is reasonably easy to understand and that may erode the power of Big Tech companies, Filecoin hits the sweet spot in terms of generating showcasing for consumers and policymakers the benefits of the crypto economy. Good policy needs good champions. Cultivating those champions in the U.S. has been caught in an environment of negative impressions about what exactly cryptocurrencies do and do not do. Filecoin is exactly the type of project needed to counter those under-informed suspicions, opening more space to craft regulations and new laws that will allow the industry to grow as it should.