I don't use filecoin's network but I do use a competitor that is basically doing the same thing, storj. Also when I say I use the network I am talking about actually uploading and paying for data storage.
To answer some of your questions, storj's network consists primarily of people who are renting out their unused hard drive space. Economic of scale doesn't really matter because the people renting the space are just trying to make a few extra bucks per month and they have already paid for the hardware.
They have no way of preventing centralization of disks but the whole network is decentralized. The file you upload is being hosted on thousands of different disks.
Like all companies, they will probably comply with FBI/DMCA orders to the best of their abilities. The issue for them and the FBI is that all data uploaded to the network is encrypted at the point of upload so it is impossible for the FBI/DMCA to find it. These decentralized file hosting systems don't allow public sharing of the download links/keys (yet at least).
Also the reason I pay for storj over say google is because storj is cheaper and has higher redundancy requirements. I have files that I absolutely can never risk losing and storj allows you to pay for the service anonymously while other services do not. In the world of data breaches everywhere, the less information the company has about you, the better.
> Economic of scale doesn't really matter because the people renting the space are just trying to make a few extra bucks per month and they have already paid for the hardware.
OK so hypothetically, if this decentralized storage thingie made the sellers a profit, there would be at least 1 rational and greedy seller who would take that profit, invest it in more disks, and save on costs compared to other folks, right? In other words, if I have 100,000 computers in a data center with central cooling system, the total electricity costs will be less than the total cooling costs of 100,000 individuals each with their own 1 computer. Furthermore, the total bandwidth costs of the 100,000-computer data center will be cheaper than the total bandwidth costs of 100,000 individuals with 1 computer each (economies of scale).
How can you say that "there is no way to prevent centralization" and then follow up with "the whole network is decentralized", when the cost structure obviously makes more sense for this distributed storage to all be controlled by a handful of resourceful entities?
Then those 4-5 data centers just become an encrypted Dropbox, right? So like, SpiderOak?
It's Airbnb for disks. Maybe not the perfect analogy, but I think the idea here is to just capture latent inventory that is otherwise being wasted. It's not about competing on margins, but activating latent resources that are sitting out there completely unused.
I haven't made the analysis but maybe Airbnb works because it is actually more profitable for an entity to host 100 airbnbs then to have a regulated hotel with 100 units, in which case the analogy doesn't work because that's the crux of my argument.
In the case of decentralized storage, this is not the case, as we've seemed to have agreed. Which means this:
1- The 4 data centers will host 99% of the available storage because it's so profitable for them
2- Because the supply of storage on the network is so high, the reward given to the hosters goes down (this is how FileCoin works I'm guessing, the reward needs to come down to close to the overall cost of the suppliers, like difficulty adjustments in Bitcoin)
3- Because the costs of the data centers which now have millions of disks all under centralized electricity/infrastructure is so low, the reward becomes lower than the cost of being an individual storage supplier.
4- At this point, the individuals with "latent resources" have no incentive to put these on the network, and actually are incentivized to sell the disks instead, because at least that way they'll make money.
5- Who is incentivized to BUY these disks? See #1
That's how economies of scale work and why they will make FileCoin useless.
Your argument is "maybe not", which isn't adding much. So can we agree that if the reward you would get is actually less than the electricity+bandwidth costs of you leaving your computer on all day, then you're better off keeping the 500GB free?
Just like in Bitcoin, my free CPU cycles are better kept free because if I try to mine Bitcoin I would have to leave my computer on 24/7 and it would cost me more than the BTC rewards I'd very rarely receive?
We've literally just swapped free CPU cycles for free disk space, and we both know PoW is centralized and it's not worth individuals with a laptop to mine, but somehow the free disk space won't suffer the same fate?
Prior to AirBnB property owners left their homes unoccupied while they continued to pay property tax and upkeep on them during those times. Similarly, there are people with computers powered on all day that have disk space unused while they continue to pay for the electricity costs. If you assume these are the people who are going to make up the majority of the FileCoin network, this is effectively "found money" for those folks. (Albeit probably not much money.) This might not be the way it plays out, but if it does, your arguments about margins and electricity bills are moot: these costs are not increasing after the network is connected.
edit: Also even if FileCoin doesn't throw off a ton of ETH, presumably there will eventually be a wide array of services like the FileCoin network that you can transparently trade your liquid crypto assets into. For example, consider a person who happens to have 50TB of disk they don't need for the next month but would like to perform some low latency rendering jobs on the RenderCoin network during that time instead. They could easily just trade one for the other, increasing market efficiency for those resources. This example would be a small transaction in terms of ETH, but multiply that across the entire set of all computing resources, across all services, and it is a potentially tectonic shift in effective allocation of resources.
I leave my computer on all day anyways, I'm pretty lazy. Or rather, the cost of having to wait for it to boot is greater than the electricity. The fact of the matter is that I'm paying a large premium for a small slice of usable time and I'm not in the minority.
To answer some of your questions, storj's network consists primarily of people who are renting out their unused hard drive space. Economic of scale doesn't really matter because the people renting the space are just trying to make a few extra bucks per month and they have already paid for the hardware.
They have no way of preventing centralization of disks but the whole network is decentralized. The file you upload is being hosted on thousands of different disks.
Like all companies, they will probably comply with FBI/DMCA orders to the best of their abilities. The issue for them and the FBI is that all data uploaded to the network is encrypted at the point of upload so it is impossible for the FBI/DMCA to find it. These decentralized file hosting systems don't allow public sharing of the download links/keys (yet at least).
Also the reason I pay for storj over say google is because storj is cheaper and has higher redundancy requirements. I have files that I absolutely can never risk losing and storj allows you to pay for the service anonymously while other services do not. In the world of data breaches everywhere, the less information the company has about you, the better.