What is the InterPlanetary File System (IPFS) in crypto?

• IPFS is a storage system that's not controlled by one company. It makes the internet more effective and resistant to problems than older systems.

• It uses a content-addressed system, where each piece of content is identified by a unique hash, making it harder to censor or manipulate.

• While IPFS and blockchain are both decentralized technologies, they serve different purposes. IPFS is focused on creating a global network for storing and sharing files without a central authority. In contrast, a blockchain is mainly a list of transactions that is not controlled by a central group.

The InterPlanetary File System (IPFS) is a peer-to-peer (P2P) distributed system for storing, accessing, and sharing files, websites, applications, and data. Introduced in 2015 by computer engineer Juan Benet, IPFS is a new way to store and get files, designed to make the internet more reliable.

Unlike the traditional web where data is stored on centralized servers, IPFS tries to create a system that is not controlled by one central group. It uses a content-addressed system, where each piece of content is identified by a unique hash called IPFS Content Identifier (CID). This means that the content is stored and retrieved based on its hash rather than its location, making it much harder to censor or manipulate.

While IPFS and blockchain are both decentralized technologies, they serve different purposes and cater to distinct use cases. IPFS focuses on creating a global, decentralized network for storing and sharing files. It aims to enhance the efficiency and resilience of traditional web protocols by allowing files to be stored in multiple locations, making them resistant to censorship and ensuring availability even if some nodes go offline.

On the other hand, blockchain serves primarily as a decentralized ledger, recording transactions or data in a transparent and tamper-proof manner. Blockchains use special ways to agree on things and secret codes to make sure the information stored on the chain is correct and safe. It is often used for decentralized applications (DApps) and involves cryptocurrencies, smart contracts, and decentralized finance (DeFi).

IPFS serves various purposes, ranging from delivering content globally, storing files securely, and facilitating efficient file sharing. It can act as a complementary file system for public blockchains and other P2P systems. By integrating with Ethereum’s smart contracts, IPFS can provide secure and cost-effective storage capabilities within the crypto ecosystem, aiming to enhance Ethereum’s overall performance.

IPFS, in conjunction with Filecoin, aims to create incentives for data storage. This combination can play a role in the development and storage of digital assets, enhancing the scalability of DApps on platforms like Ethereum.

IPFS offers several advantages over HyperText Transfer Protocol (HTTP) connections. This includes low operational costs, enhanced performance and security, data integrity, and censorship resistance.

IPFS utilizes content identifiers to fetch the exact information users are looking for, while HTTP connection sends users to a specific address or location. This means that IPFS deals with the “what” (content-focused) while HTTP the “where” (location-focused).

As the crypto ecosystem continues to evolve, the role of IPFS may grow. Its ability to provide a decentralized storage and distribution system makes it an integral part of the blockchain infrastructure. With its approach to data storage and retrieval, IPFS is poised to play a role in the future of decentralized applications and the broader crypto ecosystem.