Decentralized Storage – File Storage for the Future?

Blockchain  •  Privacy/Data Security  •  Virtual Currency

Decentralized cloud storage programs, smart contracts, and the shared economy– will they combine to be a mainstream method of storage method of the future? A number of companies are working to make it a reality. One, Sia (sia.tech), a decentralized cloud storage program, released a public version 1.0 of its graphical user interface. Sia’s concept is to “liberate the unused storage space of the world and unite it into a worldwide free market for data” by creating a decentralized network of datacenters that, taken together, comprise the world’s fastest, cheapest, and most secure cloud storage platform.  Effectively, Sia allows anyone to make money by renting out their hard drive, where data integrity is protected using redundancy and cryptography.

In operation, anyone can now download the Sia application and start trading distributed disk space with other Sia users. Downloaders set up a wallet, and then send it money by either mining for SiaCoins (using a separate application), or buying SiaCoins. Once the wallet is funded, renters can pay to store their files by a host (similar to traditional platforms like Dropbox, where Dropbox is the host). Every stored file is sliced into tiny, highly encrypted pieces, and spread between many hosts who cannot see what they are hosting.

Smart contracts govern the relationship between the renter and the host. The contracts enable each host and renter to make an agreement about what to do with an uploaded file, at what price, and for how long. The renter pays up front, and the blockchain acts as ledger. If the host keeps the file and submits a proof of storage at the end, the host will get paid. Otherwise, (depending on the terms of the contract), the payment is returned to the uploader. Hosting is a commitment, requiring 95% uptime, so renters will almost always be able to access their uploaded files.

The current cost for using the Sia platform to store data, then, is set by a free market of users and hosts. While Dropbox currently costs around $12 per terabyte (TB) per month, the most expensive of the beta testers on the Sia forum plans to sell their drive space for around $8 per TB per month.

Other major players in this space are Storj and MaidSafe. Storj is very similar to SIA, but does not feature on-blockchain storage contracts. It offers a pay-as-you-go model where hosts are paid with some frequency by the renters; this method does not allow consistency or security for payment because if a renter goes offline, there is no guarantee of payment. MaidSafe goes in a slightly different direction, focusing on a decentralized, secure and completely private global network. It uses a novel scheme for achieving consensus (not a blockchain), and focuses on securing data rather than securing a server.

It remains to be seen whether decentralized storage catches on as a mainstream form of data storage in the future.

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