Filecoin creator denies strike allegations

Juan Benet, the creator of blockchain-based data storage platform Filecoin, has called allegations that miners of its token have been on strike since last week "Nonsense."

According to a report by 8btc.com, five of the largest Filecoin miners turned off thousands of rigs to protest the platform's economic model.

Under this system, miners are required to stake Filecoin tokens as collateral when producing a block.

Crypto Twitter user Nico Deva was one of the first to claim that "a majority of miners" were on strike following allegations that they needed to buy Filecoin tokens to take advantage of mining capacity.

This allegedly did not sit well with some of the top miners in China, leading to reports of a possible strike.

"A napkin calculation shows you early on that your mining system that requires $20K hardware also forces you to buy more coins," said Deva, referring to Filecoin's 2017 initial coin offering which raised over $200 million in less than an hour.

"What is happening is that miners are growing slower than before launch. This is in great part because the network is no longer subsidizing their pledge and fee costs - fees cost real money now, and miners need to match growth rate to token flow."

The Filecoin founder claimed the project recommended that many miners "Slow down growth rate to match their token flow, or pause until they can afford to grow steadily."

"Some of miners' growth decrease is from following our advice," said Benet.

"There are some miners that no doubt want to push things and try to get more. If they could guilt the community into giving them a lot more money, it may be worth a shot. A thing you learn quickly when there's lots of money at stake is people will come out of the woodwork to take it, and they will try all kinds of manipulative tactics."