Two sources of storage provider revenues are block rewards (minting) and deal fees (paid between storage clients to storage providers). Indeed, there are real fiat hardware costs to providing storage/related services (cost of hardware, computation etc). Given that the network is fairly new, we expect that currently storage provider revenues come primarily from block rewards, and deal fees are minimal (as you noted, storage is cheap). In short, the network is subsidizing capacity onboarding through block rewards; FIL as a utility token has some intrinsic value (storage providers would not incur fiat operational expenses if they did not receive commensurate rewards in FIL). As the network matures and becomes more robust and trusted, rewards from block reward minting will naturally taper, and storage deal fees will constitute a growing share of storage provider revenues.
Regarding the question of a “good equilibrium” and the ability for the network to “compete” with centralized storage/data services, we believe that as the network matures, and quality of service improves, it can certainly be a viable competitive option, with additional unique use cases separate from the current offerings from centralized players. The ability for clients and storage providers to come to market equilibrium prices for customized storage, retrieval, and computational services addresses the inherent inefficiencies in economies dominated by large, centralized players with limited choice.
How the network’s supply evolves over time is subject to many exogenous factors, but, in general as the network matures, we should expect the economy to be more deflationary rather than inflationary, as token vesting schedules end, and block rewards (minting) taper as mentioned earlier. Please see here (https://www.youtube.com/watch?v=mj4QxYKPMmA) for a discussion on Filecoin’s circulating supply, and the sources of inflow/outflow that determine its dynamics.
Regarding the question of a “good equilibrium” and the ability for the network to “compete” with centralized storage/data services, we believe that as the network matures, and quality of service improves, it can certainly be a viable competitive option, with additional unique use cases separate from the current offerings from centralized players. The ability for clients and storage providers to come to market equilibrium prices for customized storage, retrieval, and computational services addresses the inherent inefficiencies in economies dominated by large, centralized players with limited choice.
How the network’s supply evolves over time is subject to many exogenous factors, but, in general as the network matures, we should expect the economy to be more deflationary rather than inflationary, as token vesting schedules end, and block rewards (minting) taper as mentioned earlier. Please see here (https://www.youtube.com/watch?v=mj4QxYKPMmA) for a discussion on Filecoin’s circulating supply, and the sources of inflow/outflow that determine its dynamics.