this post was submitted on 20 Aug 2023
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I don't know the details (checked it out once, before crypto integration), but it's like bittorrent. You seed your own files, people who download and keep the files also seed. I think I once tried out a prototype decentralized (crypto) ebay-like app, and all images were "hosted" on IPFS. (So, once the app downloaded the product image, it seeded it to other clients).
I believe all files are hashed, and something like DHT is used to lookup files by hash id.