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.

basically like bittorrent but the entire network is just one swarm and blocks are deduplicated and everyone keeps the stuff they accessed for a while so peers near to them can fetch it from them

it also has a dht, a pubsub like system for fast message propagation and changeable content and is built to be future proof on the protocol level (everything is modular and self describing and can be swapped out)

oh and also everything can link to everything by its CID (content identifier)