Planning to buy Filecoin? Well, cryptocurrency investment is essential to greater success. We’ve made it easy with our complete guide on how to buy Filecoin in the UK.
Filecoin is a decentralized, peer-to-peer network that allows its users to rent or buy hard drive storage space. This means that if you have extra storage that won’t be used, you can sell it on Filecoin and also use this digital marketplace as an alternative way of buying more space to store your data.
This guide intends to introduce you to Filecoin and how to buy it - we will find out what it is used for, how it works, how to buy Filecoin in the UK, and whether it is the right time for buying or selling it.
QUICK GUIDE: HOW TO BUY FILECOIN IN THE UK
- Open an account with a cryptocurrency exchange.
- Verify your account.
- Go to the deposit section
- Go to the platform and select Filecoin.
- Enter how many Filecoin coins you want to buy.
- Check the details and confirm your purchase.
What's in This Guide?
What is Filecoin and How Does it Work?
Filecoin was first introduced in 2014 by Jean Benet, who released the whitepaper: Filecoin: A Cryptocurrency Operated File Storage Network. Ultimately, the project was launched in August 2017 and raised over $200 million in just 30 minutes. Now, Filecoin is ranked 15 on Coinmarketcap in terms of market capitalization.
This blockchain technology-based platform allows its peers to buy or sell storage, making contracts directly with other people rather than buying it from a company. All the transactions are made using Filecoin (FIL), its native currency and are recorded on the blockchain.
Scheme showing how Filecoin works. Source: filecoin.io
There are some factors making Filecoin better than its centralized competitors. First of all, by buying storage on Filecoin, you don’t trust your important data to be stored on just one company, but it gets split up and stored on different computers around the world. The next great thing is that on Filecoin, the similar item (which is storage, in this case) is sold at different prices, so the users can navigate and find the best deals.
This also boosts competition in the cloud storage market. And, what is most appealing about this platform is that if you have extra storage, you can rent it and be rewarded with FIL tokens.
There are three main groups of peers on Filecoin - clients who buy storage for storing and retrieving their data; storage miners, who store clients' data and get a reward for this and retrieval miners who provide clients with their data if the latter requests for it.
Should You Buy Filecoin?
According to crypto experts, Filecoin is a good investment in terms of both long-term and short-term investment plans.
Looking at its price history, we see a good rise since it started trading. The Filecoin asset was traded at an average price of $4.50 in 2019, but FIL prices started to rise in April 2020, after it was listed on the Gemini exchange. Its price reached over $20 in the last days of 2020.
Another significant rise in Filecoin occurred in March 2021, when a China-based computer hardware company, Xinyuan Technology Co, announced that it had made a huge investment in Filecoin. This resulted in its rise above 250% and being traded above $200. Since then, the coin has lost some of its value and is currently trading at around $165.
Finally, the last important factor to take into account is that Filecoin isn't just a digital currency that you can buy or sell; it has another purpose apart from trading. Filecoin is trying to make a step in the clouding market. The cloud market is already dominated by other great companies, like Microsoft, Amazon, etc., but the problem is that they are centralized. In contrast, Filecoin leverages its blockchain technology to give its users more control over their data.
How to Buy Filecoin online in the UK - A Step by Step Guide
As long as you have decided to buy Filecoin, let’s navigate through the guide and see how to buy Filecoin in the UK.
1. Find a UK Crypto Exchange that Supports Filecoin
So, your first step should be finding a cryptocurrency exchange that allows you to buy Filecoin. There are lots of exchanges that support Filecoin, while the following two are among the largest ones.
eToro: supporting trading over 17 cryptocurrencies, eToro is one of the most well-known exchanges in the world. One of its benefits is that it offers lower exchange fees for its users. It also allows its UK-based users to directly deposit funds into a bank account with a credit or debit card.
2. Open an Online Account and Deposit Funds
Having chosen the exchange platform on which you want to buy Filecoin, your next step is to create an account on it.
The sign-up process also requires you to verify your identity with a copy of your ID. The next thing is to deposit some funds on your account, as the platforms usually require a minimum deposit to allow you to start trading.
3. Buy Filecoin
Once you have deposited money on your account, you are ready to purchase FIL. You can buy it with fiat currency (depending on the exchange platform), but you can also exchange it with other cryptos, including BTC and ETH.
4. Transfer Your Funds to a Cold Storage Wallet
Storing your funds on a wallet is not a necessity, as long as you can keep your coins on the exchange platform. However, wallets allow you to have more control over your coins and provide extra security for them.
So, if you plan to buy and hold lots of coins, it would be the right decision to sign up for a wallet and transfer your funds into it. When it comes to choosing a wallet, eToro wallet can be good choice for storing your funds.
How to Trade Filecoin in the UK - A Step by Step Guide
After successfully completing the Filecoin buying process, you will see your coins on your brokerage wallet. Then it’s time for you to decide whether you want to keep it as a long-term investment or take a short-term approach.
If you think that the Filecoin price will rise and you can make a huge profit, you can take a long-term approach to this investment, so you had better transfer it to your personal wallet. In the case of a short-term approach, you make a profit from its daily or hourly price fluctuations.
If you wish to actively trade Filecoin, you might want to consider another platform that is more cost-effective and easy to use for professional day trading purposes.
1. Find an Online Trading Platform that Supports Filecoin
If you make a short-term investment in Filecoin and want to trade it, first of all, you need to find a broker platform that supports Filecoin. There are two factors to take into account while choosing a trading platform - you must be sure that it's quick and easy to operate, and the second factor is the fees it charges.
For now, there are not too many broker platforms supporting Filecoin in the UK; however, this might change later. You can start trading on eToro, on Gemini, or any other platform from our top UK crypto exchanges list above.
2. Fund Your Account
After deciding which platform you want to trade your Filecoin, you must sign up and fund your account. On eToro for example, you can now fund your account with a fiat currency (only USD) as well, but it also accepts digital currencies like BTC, LTC, ETH, etc.
3. Develop a Trading Strategy
4. Start Trading Filecoin
After having an account on a trading platform, and funding it, what you need to do is just start buying and selling the coin based on the trading strategy you have chosen beforehand.
Filecoin Pros and Cons
If you still are unsure whether you want to buy Filecoin or not and want to take a closer look before you make your final decision, here is some more information about this crypto and its benefits and disadvantages.
- Crypto experts predict a considerable rise in Filecoin prices
- Filecoin is considered a good investment for both long-term and short-term investment
- You can use your FIL to buy extra storage with unique benefits that are not offered by its centralized competitors
- Such a big company, as Chinese Xinyuan Technology, shows a great interest in it
- It is not as fast and reliable as its centralized competitors
- Filecoin is quite transparent about who is storing what, so the only thing that remains hidden is the content of your files
Is Filecoin a Good Long-Term Investment?
If we take into account crypto analysts' recommendations, Filecoin seems to be a profitable long-term investment. Digital Coin Price forecasts that the price of Filecoin will reach $293 by the end of 2021, while the lowest price for FIL is predicted $258 for this year.
Filecoin price predictions according to Digical Coin Price
What Will be Filecoin Worth in 2025?
Experts and analysts predict a potential rise in Filecoin prices in the next 5 years. DigitalCoinPrice forecasts that Filecoin (FIL) will reach up to $596 in 2025, while LongForecast's predictions are almost twice more than that of Digital Coin Price. According to their forecast, the value of Filecoin will reach up to $1,032 at the beginning of May 2025. WalletInvestor also predicts the price of Filecoin to reach the $1,000 mark by the end of 2025.
What’s the Purpose of Filecoin?
Generally, Filecoin aims to provide its users with a blockchain-based alternative for storing information in contrast to the traditional companies that offer only centralized data storage services. As such, if you have extra storage on your electronic devices, you can sell it on this platform.
The problem with traditional companies like Amazon and Microsoft Azure is that there is only one point for failure. So, if its servers are hacked or go down, you will lose control over your data. What does Filecoin do to solve this problem? It splits up the information and stores it on different computers around the world, making it more secure and harder to hack.
While you may think it's not that promising to keep your data on someone else's computer, Filecoin thought about this problem too. It splits up it in a way that nobody can rearrange it.
However, Filecoin can collect all the pieces together when the owner requests its data. One problem in the Filecoin technology right now, though, is the speed that it needs to give access to the data, which depends on several factors, including whether the servers are online or not, etc.
Is Filecoin Mining Profitable?
Presently, Filecoin is not high up in the list of the best cryptocurrencies in the market to mine. However, Fileoin is considered by many crypto investors as one of the most interesting mining tokens out there, particularly due to the huge interest from Chinese miners and as it was recently added to many large crypto mining applications.
For now, there are two types of miners at Filecoin - storage miners and retrieval miners. Storage miners mine Filecoin by storing the clients' data, and, across time, they conduct cryptographic proof that they are still holding the data correctly. Apart from being rewarded by clients, they can also get Block rewards, a large sum that a miner receives for a new block.
All its active miners have a chance to get a block reward that depends on the amount of storage they are contributing to the network. The second type of miners, known as retrieval miners, is rewarded for helping the clients get their data when they request it. This group receives FIL by winning bids and mining fees for a particular file which are determined by the market value of the file's size.
Buying or Trading Filecoin: Things to Take into Consideration
Considerations for a long term investment strategy
If you want to buy Filecoin, you can do it for long-term investment or for short-term investment. There are some factors to take into account in both cases.
After buying Filecoin on the platform for long-term investment, you had better keep it on your personal wallet so that your coins are more secure. But before making the final decision, take a look at its price predictions for a couple of years and what crypto analysts "gossip" about this cryptocurrency. It would also be good if you follow the news about this market after buying it, in case there will be more competitors, or you may find other alternatives.
Considerations for a short term investment strategy
You can also make a short-term investment if you are sure there will be Filecoin price fluctuations and that you can profit from it. The crucial factor to consider, in this case, is finding an easy-to-operate and quick platform that also offers the lowest fees. Then, you must also think about a trading strategy that you want to develop and start your trade.
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