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That is actually the intent of filecoin. In perfect competition, which is the ideal state for a commodity, there is no economic profit. The reason Amazon and ot

That is actually the intent of filecoin. In perfect competition, which is the ideal state for a commodity, there is no economic profit. The reason Amazon and other companies are able to make a profit selling cloud storage is because there is not yet perfect competition. Right now if I wanted to compete with Amazon, I could buy 2 or 3 petabytes of storage space and some bandwidth. But nobody would trust me not to lose their data. This is the differentiation that makes cloud storage less of a commodity than it could be. The goal with filecoin is to make it so you don't have to trust me, just some general guarantees about the filecoin network. If amazon for some reason was selling storage on this network, I could compete with them on equal footing (and whoever sold it more cheaply would win). Many commodities are in close-to-perfect competition. For instance, I don't care if grain comes from England or France, just that it's cheap. While it is very hard to make an economic profit selling grain, many people do farm grain and make enough money to support themselves (The money you pay your workers to survive is one of the costs of producing grain. That's true even if the only worker is you) If you could make a profit by running a filecoin node on a VPS, everyone would do that. By competing with each other you'd all bring the price down and down until it was no longer more profitable than selling any other commodity (and maybe even lower). So you're right to not expect to be able to do that.

rglullis 6y ago
Your arguments do not follow: > which is the ideal state for a commodity, there is no economic profit. No. A commodity is simply any kind of good that is considered equivalent no matter who made it. Oil is a commodity, there is plenty of competition and there is still plenty of profit to be made (current crisis excluded) > While it is very hard to make an economic profit selling grain, many people do farm grain and many enough money. The analogy here would be to get people to (a) "farm" disks (and electricity/internet) and (b) with some profit to justify their work. (a) is impossible (except for freeloaders) and you agree with me that (b) seems to be unlikely. So the question is: who would be interested in taking the supply side of the filecoin network, when there is no profit to be made?
- scoopertrooper 6y ago
  > No. A commodity is simply any kind of good that is considered equivalent no matter who made it. Oil is a commodity, there is plenty of competition and there is still plenty of profit to be made (current crisis excluded) You could hardly say a market dominated by a giant state-sanctioned cartel was a good example of a commodity market in the state of perfect competition. > So the question is: who would be interested in taking the supply side of the filecoin network, when there is no profit to be made? There would likely be some short term economic profits at the beginning, which would attract market entrants. The economic profit would tend to zero over time, but keep in mind economic profit as a concept incorporates the notion of the entrepreneur paying themselves a competitive wage for their time.
  - rglullis 6y ago
    > giant state-sanctioned cartel... Point still stands. All else being equal, oil from Saudi Arabia is the same as the oil from Canada or Denmark. If you don't want to use oil as an example, use coffee, milk, chicken meat, soy, cotton, oranges, electricity, potable water... > There would likely be some short term economic profits at the beginning, which would attract market entrants. The first market entrants are the ones selling extra capacity they have. For those that already have sunk costs of the disks, sure, they can make a profit on this. My point is that once that capacity is gone and there is more demand for data, people will have to actually go and buy disks and let them run 24/7, and this would cost more per GB stored than they will be able to sell.
- jhoechtl 6y ago
  The point is perfect competition, highlight on perfect. In oil business there are profits because competition is not perfect. Note that perfect here is rather a theoretical, economic term. In reality, market regulations and peoples socio-economic attitutes prevent a perfect competition. The mentioned missing trust could be alleviated by IPFS becoming a widely trusted, distributed, unstoppable service.
  - rglullis 6y ago
Nursie 6y ago
That's the economic flaw in all of this - Amazon have economies of scale and access to cheap power and network connectivity and that means smaller competitors will be locked out of the market. You're not going to be running a node on your spare capacity that brings in more than your costs, in fact unless you're a datacentre operator, you're going to be making a loss. In the end it favours big centralised services, and IPFS (if it ever takes off) just becomes a rival API to S3.
- zozbot234 6y ago
  Cryptocoin miners' profit is largely based on "access to cheap power and network connectivity", and many of them run fairly large-scale operations but nowhere near the same scale as Amazon. No reason why a "file coin" should be any different.
  - rglullis 6y ago
    That is missing the point. No one doubts that it is possible to bring down the costs of storage and its infrastructure. The point is that no matter how low these costs are all nodes are driven to undercut each other until their profitability is zero.
    - ric2b 6y ago
      There's a lot of spare capacity in personal devices, getting _anything_ out of that capacity is nice and means you'll have people gladly undercutting Amazon and friends. Maybe limited and not at the same level of availability but still competition.
      - rglullis 6y ago
        > getting _anything_ out of that capacity is nice Ok, now go tell that to the ones that put 257 million USD on the Filecoin ICO and are expecting profits on a growing network! > undercutting Amazon and friends. That is so short-sighted. Amazon storage is not priced only due to the cost of storage. If it were, Wasabi would be stealing all of their customers given they charge "only" $6/TB-month, and I could go steal all of their customers because I have a cluster of Minio Servers that cost me $3.50/TB-month. People are paying Amazon and the other major players a premium is not due to lack of competition or collusion between them or because they are price-sensitive. If they are (like I am), they would figure out how to setup Minio/Ceph and run their own servers.

rglullis 6y ago

Your arguments do not follow: > which is the ideal state for a commodity, there is no economic profit. No. A commodity is simply any kind of good that is considered equivalent no matter who made it. Oil is a commodity, there is plenty of competition and there is still plenty of profit to be made (current crisis excluded) > While it is very hard to make an economic profit selling grain, many people do farm grain and many enough money. The analogy here would be to get people to (a) "farm" disks (and electricity/internet) and (b) with some profit to justify their work. (a) is impossible (except for freeloaders) and you agree with me that (b) seems to be unlikely. So the question is: who would be interested in taking the supply side of the filecoin network, when there is no profit to be made?

scoopertrooper 6y ago
> No. A commodity is simply any kind of good that is considered equivalent no matter who made it. Oil is a commodity, there is plenty of competition and there is still plenty of profit to be made (current crisis excluded) You could hardly say a market dominated by a giant state-sanctioned cartel was a good example of a commodity market in the state of perfect competition. > So the question is: who would be interested in taking the supply side of the filecoin network, when there is no profit to be made? There would likely be some short term economic profits at the beginning, which would attract market entrants. The economic profit would tend to zero over time, but keep in mind economic profit as a concept incorporates the notion of the entrepreneur paying themselves a competitive wage for their time.
- rglullis 6y ago
  > giant state-sanctioned cartel... Point still stands. All else being equal, oil from Saudi Arabia is the same as the oil from Canada or Denmark. If you don't want to use oil as an example, use coffee, milk, chicken meat, soy, cotton, oranges, electricity, potable water... > There would likely be some short term economic profits at the beginning, which would attract market entrants. The first market entrants are the ones selling extra capacity they have. For those that already have sunk costs of the disks, sure, they can make a profit on this. My point is that once that capacity is gone and there is more demand for data, people will have to actually go and buy disks and let them run 24/7, and this would cost more per GB stored than they will be able to sell.
jhoechtl 6y ago
The point is perfect competition, highlight on perfect. In oil business there are profits because competition is not perfect. Note that perfect here is rather a theoretical, economic term. In reality, market regulations and peoples socio-economic attitutes prevent a perfect competition. The mentioned missing trust could be alleviated by IPFS becoming a widely trusted, distributed, unstoppable service.
- rglullis 6y ago

Nursie 6y ago

That's the economic flaw in all of this - Amazon have economies of scale and access to cheap power and network connectivity and that means smaller competitors will be locked out of the market. You're not going to be running a node on your spare capacity that brings in more than your costs, in fact unless you're a datacentre operator, you're going to be making a loss. In the end it favours big centralised services, and IPFS (if it ever takes off) just becomes a rival API to S3.

zozbot234 6y ago
Cryptocoin miners' profit is largely based on "access to cheap power and network connectivity", and many of them run fairly large-scale operations but nowhere near the same scale as Amazon. No reason why a "file coin" should be any different.
- rglullis 6y ago
  That is missing the point. No one doubts that it is possible to bring down the costs of storage and its infrastructure. The point is that no matter how low these costs are all nodes are driven to undercut each other until their profitability is zero.
  - ric2b 6y ago
    There's a lot of spare capacity in personal devices, getting _anything_ out of that capacity is nice and means you'll have people gladly undercutting Amazon and friends. Maybe limited and not at the same level of availability but still competition.
    - rglullis 6y ago
      > getting _anything_ out of that capacity is nice Ok, now go tell that to the ones that put 257 million USD on the Filecoin ICO and are expecting profits on a growing network! > undercutting Amazon and friends. That is so short-sighted. Amazon storage is not priced only due to the cost of storage. If it were, Wasabi would be stealing all of their customers given they charge "only" $6/TB-month, and I could go steal all of their customers because I have a cluster of Minio Servers that cost me $3.50/TB-month. People are paying Amazon and the other major players a premium is not due to lack of competition or collusion between them or because they are price-sensitive. If they are (like I am), they would figure out how to setup Minio/Ceph and run their own servers.