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The use of decentralized technology is making its way into industries from gaming to banking. Filecoin (FIL) aims to bring decentralization to the world of data storage by enabling users to sell storage space to others using blockchain technology. The goal of Filecoin is to provide users on the network with a more secure and anonymous way to transmit, store and publish information without the use of a centralized server.
Ready to learn more about how to buy Filecoin? Our guide can help you learn more about Filecoin, including how it works, how to purchase FIL and how to best store your coins.
Brief History of Filecoin
Filecoin (FIL) is a cryptocurrency that powers the Filecoin network, a decentralized peer-to-peer exchange that allows users to store and send information. The goal of the Filecoin network is to provide a blockchain-based alternative to traditional centralized data storage services that use a single point of entry. This limits the possibility of a hack or unauthorized access by splitting entrance points between multiple users on the network.
If you’re like most users online, you probably use a cloud storage service to store some form of data. While these services might be convenient, they rely on a single point of failure, which is the cloud storage provider itself. If the cloud storage provider’s servers go down or are hacked, you won’t be able to access your data. These services are also often located around the world, which can create problems with content and data delivery.
Filecoin attempts to solve these problems by offering a decentralized marketplace where users can rent storage space using a distributed number of individual providers. Without a single point of entry, data is more secure and less susceptible to downtime.
Filecoin’s token is currently the 25th most popular cryptocurrency when measured by total market capitalization. It was launched in 2017 and generated over $200 million with its initial coin offering.
Step 1: Open an Online Account
If you’re looking to add Filecoin to your portfolio, the 1st step is to choose a broker. A cryptocurrency broker is similar to a stockbroker because your broker will provide you with a platform that you can use to submit orders to buy and sell cryptocurrencies.
After placing an order through your broker’s trading platform, the broker will execute the order on your behalf.
Though Filecoin isn’t as popular as Bitcoin or Ethereum, there are still plenty of exchanges that will allow you to buy and sell Filecoin directly. Some of the characteristics you might want to look for when you select an exchange may include:
- Trading platform. Each broker offers its own individual trading platform. If you’re a new investor, you might want to prioritize brokers that offer a simple and intuitive platform and order placement system. If you’ve traded cryptocurrency before, you might want to prioritize brokers that offer a wider range of screening and analysis tools.
- Available cryptocurrencies. There are thousands of cryptocurrencies available to trade — but no cryptocurrency broker will provide you access to every currency on the market. Create a list of all the cryptocurrencies you want to invest in to be sure that your broker offers a single stop for all of your investing needs.
- Fees and commissions. Most cryptocurrency brokers charge a fee or commission in exchange for executing your orders. Depending on the broker you choose, you might pay a flat-rate fee or a variable fee depending on the amount of cryptocurrency that you trade each month. Maker-taker fee schedules are usually more affordable for frequent investors.
- Local availability. Each individual country and state has its own regulations regarding cryptocurrencies and their usage, and not every exchange is available for residents of all states. Be sure to check local limitations and availability before you open an account with a broker.
Not sure where to start your search? Consider a few of our favorite options that currently support Filecoin trading below.
Step 2: Buy a Wallet
In addition to a brokerage account, you should also consider opening a private cryptocurrency wallet to store your coins off the exchange. Using a private key ensures that only you have access to your coins and prevents you from losing your investment if your exchange is compromised.
There are 2 types of cryptocurrency wallets: hardware wallets and software wallets. Hardware wallets are USB-like devices that store your coins offline, while software wallets are online programs that store your coins using a computer or mobile phone application.
Below you can begin your search with our favorite hardware and software wallet options for storing Filecoin.
Best Hardware Wallet: Ledger Nano X
Most hardware wallets don’t currently support Filecoin as a standard feature. Thankfully, the Ledger Nano X is an easily-customizable wallet that allows you to expand your storage capabilities with just a few clicks. Featuring top-of-the-line security and the ability to install up to 100 applications on a single device, the Ledger Nano X is a comprehensive option you can use to store all of your cryptocurrencies.
In order to use your Ledger wallet to store your Filecoin offline, you’ll need to install the Lotus application, which you can add directly to your Ledger Nano X. Learn more about Lotus node installation here.
Best Software Wallet: imToken
imToken is a comprehensive mobile wallet option that supports 11 blockchains and over 200,000 tokens. The imToken wallet application even has a built-in exchange that enables you to buy and sell tokens and coins before depositing them directly into your private wallet.
For offline protection, you can purchase optional imKey protection that adds another layer of cold storage security. imKey is compatible with the imToken app and uses Bluetooth to connect directly to your software wallet. The imToken wallet is available as a free download for iPhone and Android platforms.
Step 3: Make Your Purchase
When your wallet is open and you’ve opened your brokerage account, it’s time to place an order to buy Filecoin. The types of orders that you’ll have access to will vary depending on the broker that you’ve chosen.
After entering your order, your broker will fill the order on your behalf and deposit the coins into your exchange wallet. From here, you can withdraw your crypto to your private wallet if you choose.
Filecoin’s team of developers are constantly encouraging users to create new projects that utilize the coin’s unique network infrastructure. Filecoin’s 4th and 5th wave of developer grants have recently closed, while wave 6 grants are currently under consideration. Funding waves may increase the usability of the token, especially after submissions are completed.
Trade or Sell Your Cryptocurrency
If your broker is able to complete your order, you’ll see your coins in your brokerage wallet shortly afterwards. From here, you need to decide if you want to take a short-term or long-term approach to investing.
If you think that the price of Filecoin will rise in weeks or months, you’ll want to transfer your coins to your private wallet for long-term storage. If you think that Filecoin will fluctuate in value on an hourly or daily basis, you might want to capitalize on these value differentiations by selling your coins and buying them back when it’s most advantageous to you.
Short-term investors need a responsive and easy-to-operate platform to execute their trades quickly. If you aren’t sure which trading platform is right for you, consider a few of our favorite options below.
Current Crypto Prices
Cryptocurrency markets are notoriously volatile. It’s normal to see price fluctuations of 5% or more on a daily basis — and price changes for smaller cryptocurrencies can be even more extreme.
Tracking how the cryptocurrency market is moving on a day-to-day basis can help you decide when you want to buy in or sell. View a summary of today’s market movements using the chart below.
Add Cryptocurrency to Your Portfolio
The world of cryptocurrency and blockchain technology represents the forefront of online innovation and potential. While these developments can be exciting, it’s important to remember that the cryptocurrency market is still largely unregulated.
If you do decide to invest in Filecoin or any other cryptocurrency project, be sure that your investment in this sphere makes up only a small percentage of your overall portfolio. Get started today with a Filecoin purchase through 1 of our recommended brokers.
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