Invest in Filecoin in 2022
Plenty of alternative cryptocurrency projects has emerged, with each of them looking to solve a range of problems that face online users today. One of the more interesting ones is Filecoin (FIL), which focuses on data storage and more.
Before buying Filecoin, it’s important to do some prior research to ensure that you make a decision that’s right for you. This article will show you all the different ways to invest in Filecoin, along with our view on whether it’s safe to do so right now or not.
Best Way to Invest in Filecoin in 2021
Compared to many altcoins, buying Filecoin is pretty straightforward. You’ll find several places to purchase the currency if you look online. To help you out, we’ve listed the best providers in the table below.
What Is Filecoin - Quick Overview
Name and ticker: Filecoin (FIL)
Date launched: July 2014
Circulating supply | max supply: 156,294,844 | 156,294,844
Blockchain network: Filecoin blockchain
Creators: Juan Benet, Protocol Labs
Use-cases: Data storage, retrieving information, mining, investing, NFT storage
Famous backers: Andreessen Horowitz, Sequoia, Union Square Ventures, Winklevoss Capital
What Is Filecoin – Explained
Filecoin is a cryptocurrency native to the Filecoin blockchain. It was launched in 2014 and was created by Juan Benet and Protocol Labs. The currency hit the headlines in early 2021 for reaching all-time highs, though it has since rescinded back towards its previous levels.
At the time of writing in February 2022, Filecoin is the 40th-largest cryptocurrency on the planet by market capitalization. It takes up 0.19% of the overall share and has a market cap surpassing $3 billion.
As of 3rd February 2022, the price of 1 FIL to USD is $20.14.
What’s the Purpose of Filecoin?
Filecoin’s primary purpose is to store important data, along with making it easy for users to retrieve this at a later date. You can use the protocol to store several kinds of information, including:
Decentralized app (dApp) data
The Filecoin cloud is fully decentralized, offering an alternative to some of the more mainstream versions on the market. It’s designed to provide something that not only has no intermediaries but is also secure to use.
Are There Any Famous Filecoin Backers?
If you look at the largest cryptocurrencies on the globe, many of them have famous backers. Several celebrities own Bitcoin, while some have begun cryptocurrency projects of their own. It’s almost certain that such prominent voices in the field have contributed to the surge in popularity that crypto has enjoyed in recent years.
Looking specifically at Filecoin, the currency is well-backed by several big names. One of these is Andreesen Horowitz, a venture capital firm based in Silicon Valley. Others have also done likewise – including Sequoia, Union Square Ventures, and Winklevoss.
Does Filecoin Have a Large Social Media Following?
For many cryptocurrency projects, the easiest way to build a connection with supporters is through social media. Many have a large presence on Twitter and Facebook, along with large Reddit forums.
Filecoin is active in several places online. You can find the project on Twitter, for example, where it has over 130,000 followers at the time of writing in February 2022. Filecoin also has a subreddit, which is much smaller; 15,000 people have joined here to discuss the cryptocurrency and more with each other.
Away from the typical social media platforms, Filecoin is also present on numerous chat channels. You’ll find an official place to talk about the currency on Slack and WeChat.
Filecoin also has a forum on GitHub with several posts covering a large variety of topics.
How To Buy Filecoin
As we mentioned earlier on this page, you can purchase Filecoin in several places online. One of the most common places to buy Filecoin is through a cryptocurrency exchange; if you pick this option, you’ll own the coins outright after you’ve completed the transaction.
If you buy Filecoin from a cryptocurrency exchange, storing them in a wallet is a good idea. Besides investing, you can use these tokens to pay for products and services in places where it’s allowed to do so.
But cryptocurrency exchanges aren’t the only place you can purchase Filecoin. In some cases, you can choose to trade derivatives instead. To do this, you’ll need to use a cryptocurrency brokerage instead.
If you’re a beginner to cryptocurrencies and investing, buying your coins from a brokerage is arguably easier than doing so from an exchange. You can still make a profit, but you won’t need to deal with the technicalities of using and owning a cryptocurrency wallet.
Several cryptocurrency brokerages allow you to buy Filecoin, with one of the largest being eToro. If you want to use this platform to purchase FIL, all you need to do is follow the steps we’ve listed below:
Step 1: Go to the eToro website and create an account. You’ll need to pass a know your customer (KYC) check before you can purchase FIL derivatives. KYCs are important for legislative compliance and anti-money laundering procedures. Documents you’ll need to pass over include: a copy of your photographic ID, such as a passport or driving license and proof of residence, such as a utility bill or bank statement.
Step 2: Go to the FIL page on eToro and select the ‘BUY’ option. Then, choose how much you’d like to purchase.
Step 3: Enter your payment details and finalize the transaction.
How To Sell Filecoin
If you’re investing in Filecoin, you’ll probably want to sell the currency at some point in the future. When the time comes for this, you don’t need to try too hard or look too far – it’s pretty straightforward to do.
If you bought your Filecoin tokens on a cryptocurrency exchange, you could use the same platform as before to sell them on. First and foremost, you’ll need to transfer the money from your wallet to your account.
Once you’ve completed the step listed above, you’ll need to sign in to your account on the cryptocurrency exchange. From there, you can submit a selling order and choose how many FIL you’d like to shift.
The final step is to confirm the transaction.
If you bought FIL derivatives on a brokerage instead, the steps to sell are somewhat different. You’ll need to log into your account and – in the case of eToro – go to the FIL page before selecting ‘SELL’. Choose how much you’d like to sell, along with the fiat currency you want to receive your money in – before confirming everything.
Alternative Ways To Invest in Filecoin
The most common ways to invest in Filecoin are through cryptocurrency exchanges and brokerages. However, these aren’t your only two options. It’s possible to make a profit on the coin in several ways.
Below, we’ve listed some of your alternative options for investing in Filecoin.
Cryptocurrency Wallets and Apps: In some cases, you might not even need to use a cryptocurrency exchange for buying and selling Filecoin. Instead, many wallets will have in-built platforms that enable you to exchange one cryptocurrency for FIL – and vice versa.
The Filecoin Grayscale Fund: Grayscale is a fund that you contribute to and is managed by someone else. The fund manager’s aim is to help those involved make a profit; it’s less hands-on than standard stock investing. At the time of writing, the Filecoin Grayscale fund has over $2 million in assets under management.
Buying From a Friend: Another alternative for investing in cryptocurrencies, including Filecoin, is to buy from a friend. If they have this token available, they might be willing to send some over; all you need to do is negotiate a price and send them the money in return. Make sure that you have the right wallet details because transactions are irreversible.
Is It Safe To Invest in Filecoin Right Now?
Before we continue, it’s worth pointing out that cryptocurrency markets are extremely volatile. Buying any coin carries significant risks, and you could lose a lot of money if you aren’t careful and don’t know what you’re doing.
Never invest more than you can afford to lose, and stay away from advanced tools until you’ve gained a significant level of experience investing in cryptocurrencies. As Filecoin’s market crash in 2021 showed, cryptocurrency prices are unpredictable, and the value can change drastically overnight.
In terms of safety from a profiting perspective, Filecoin has had a relatively low value compared to the USD for much of its existence. Having said that, the project solves a useful problem that others will likely buy into in the future. So, you might find it worth investing in over the long run.
If we talk about safety from an online security perspective, the best way to look after yourself is by using one of the platforms we’ve listed in this guide. All of them are reputable and picked by a team of experts with deep experience in the cryptocurrency space.
It’s worth noting, though, that even the best cryptocurrency exchanges and brokerages are not 100% foolproof. To protect yourself further, you should consider implementing some of the tips we’ve listed below.
Always enable two-factor authentication (2FA) on your cryptocurrency wallets and exchange/brokerage accounts. Doing so will add an extra layer of security.
Never pass more documents than you need to during the KYC checks.
Only ask for help on official forums and websites.
Be careful when clicking on links; report any that you find suspicious, and do the same for emails that you think are dubious.
Check whether the platform you use has buyer protection, as this can add some peace of mind if something goes wrong.
If you’re investing for the long term, consider buying a cold wallet. You’ll need to verify transactions offline, making them more secure than hot wallets.