First Distinguish IPFS from Filecoin
IPFS is a peer-to-peer distributed file storage protocol designed to address how files are stored, retrieved, and transmitted in a decentralized manner; Filecoin, on the other hand, is an incentive layer designed around storage supply and retrieval demand. The two are related, but they are not the same thing. So-called "IPFS mining" in most marketing contexts does not mean the IPFS protocol itself directly issues rewards; rather, it uses the IPFS concept to refer to Filecoin storage mining or related hashrate sales.
During the stage when the Filecoin mainnet was not yet running stably and token issuance and reward rules were unclear, a large number of mining machine sales, hashrate leasing, and hosting services emerged in the market under the name of "IPFS mining." Filecoin later went live, but the mining machines sold early on around the IPFS concept did not equate to stable rights to yields.
Why Miner Vendors' Profit Narratives Are Unreliable
Public reports show that around 2018 to 2019, some vendors claimed that purchasing mining machines would allow participation in IPFS/Filecoin mining, attracting buyers with pitches like "zero risk" and "break-even in two months." In related cases, a mining machine was priced at about 5,875 RMB, while industry insiders stated that the actual manufacturing cost of similar hardware might be only one-tenth of the selling price. The key here is not whether the hardware itself is valuable, but whether the yield promises are supported by real network rules, storage demand, and operating costs.
Genuine Filecoin mining yields are typically related to factors such as storage capacity, network competition, block rewards, token prices, equipment depreciation, electricity, and O&M, and they are volatile. Miner vendors simplifying complex variables into fixed returns inherently deviates from open-market mechanisms.
Characteristics of Ponzi Schemes and Capital Pools Must Be Examined Separately
Judging by their models, some "IPFS mining machine" sales possess two high-risk characteristics simultaneously: first, promising static returns, fixed break-even periods, or low-risk, high-return profiles; second, collecting funds through mining machine packages, hashrate leasing, and hosting services. Multiple media outlets and industry figures have previously pointed out that many mining machine projects in the market under the guise of IPFS were suspected of being capital pools or Ponzi schemes. Such models often rely on subsequent capital inflows to sustain payouts rather than relying on sustainable business revenue.
Historical Cases Have Already Illustrated the Risks
The "Zhongyuan Silicon Valley" case involving Henan Lianxin Technology Co., Ltd., exposed in 2019, is a typical example. Public reports show that the company sold over 300,000 "Snail Star servers" to thousands of people within five months, with total involved funds reaching approximately 2 billion RMB. The case demonstrates that so-called "servers" or "mining machines" do not automatically equate to compliant investments, nor do they guarantee returns; if a sales model is characterized by exaggerated returns, false propaganda, or unfulfillable payouts, it may touch upon legal risks.
How General Readers Should Understand This
For global readers, as IPFS/Filecoin is part of the decentralized storage track, its technological value and token economic mechanisms are open to discussion; however, the "huge profits claimed by miner vendors" are not a reliable conclusion. When evaluating such projects, the focus should be on whether the sources of returns are transparent, whether the rules are verifiable, whether funds are backed by real businesses, and whether there are promises of fixed break-even periods. If the promotion only emphasizes short-term break-evens, low risk, or high returns without a verifiable yield model and cost structure, the risks are typically significantly higher than general technical popularization.
- Whether yields come from verifiable on-chain rules rather than verbal promises from vendors.
- Whether the cost structure is public, including hardware, electricity, bandwidth, O&M, and depreciation.
- Whether typical capital pool pitches—such as fixed break-evens, low risk, or short-term high returns—are present.
- Whether the project possesses genuine storage demand and sustainable business, rather than relying on newly injected funds for payouts.
