Filecoin is built on blockchain technology and utilizes smart contracts to facilitate transactions between users. It incentivizes network participants to provide storage and retrieval services. The network was developed by Protocol Labs and launched after a successful Initial Coin Offering (ICO) in 2017, raising over $250 million. Users supply storage by allocating disk space on their machines (miners), and in return, they earn Filecoin tokens (FIL). Filecoin's objective is to create a marketplace where users can buy and sell storage resources in a decentralized manner, ensuring reliability and availability of data without the central control of traditional cloud storage providers.