Filecoin needs to generate $25.7M/yr over and above what it pays the providers. But it can't charge the customers more than S3, or $0.276/GB/yr. If it didn't pay the providers anything it would need to be storing over 93PB right away to generate a 10% return. That's a lot of storage to expect providers to donate to the system.On my bike ride this morning I thought of another way of looking at FileCoin's optimistic economics.
FileCoin won't be able, as S3 does, to claim 11 nines of durability and triple redundancy across data centers. So the real competition is S3's Reduced Redundancy Storage, which currently costs $23K/PB/month. Assuming that Amazon continues its historic 15%/year Kryder rate, storing a Petabyte in RRS for a decade is $1.48M. So, if you believe cryptocurrency "prices", FileCoin's "investors" pre-paid $257M for data storage at some undefined time in the future. They could instead have, starting now, stored 174PB in S3's RRS for 10 years. So FileCoin needs to store at least 174PB for 10 years before breaking even.
It gets worse. S3 is by no means the low-cost provider in the storage market. If we assume that the competition is Backblaze's B2 service at $0.06/GB/yr and that their Kryder rate is zero, FileCoin would need to store 428PB for 10 years before breaking even. Nearly half an Exabyte for a decade!