Could this mirror the functionality of IPFS in some way, where the content would be in multiple servers/nodes, and would get provided from the one with the best connection based on a content ID? Could even use sats to pay for file storage like FIL pays for storage on the IPFS network.
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Yes and no. Blossom uses a SHA256 content hash, so content has a unique ID across the network.
Users can publish which servers they use, so you know where to look for a users content alternatively.
It does not magically solve the storage of the content "somewhere on the internet" though. A user must actively publish his content to multiple servers to get censorship resistance and might need to pay for it.
That being said there are links between servers, so if a piece of content is missing it could be automatically fetched from an upstream server.