Siacoin: the Future of Data Storage?

Think about all the unused hard drive space sitting on computers around the world. Now just imagine you could rent that out. This is what the team Siacoin is currently doing. If you wanted to right now, you could go store your files on Sia's decentralized private cloud for a tenth of the cost of Amazon Web Services (AWS or Amazons S3), Microsoft Azure, Google Cloud, or Dropbox. Not only that your files are encrypted and secure, your files are broken up into pieces and stored on dozens of nodes across the globe. No one can tamper with them and they won't be accidentally leaked onto the internet, which just happened with Verizon. In this case Verizon had 14 million customers private info like cell phone numbers and account Personal Identification Numbers (PINs) were breached. This is another reason why centralized data storage is not secure and has many flaws. The first major flaw is single point of failure. If the building holding your data storage loses power, gets damaged, floods, etc. your data is gone. Also your data can be tampered with by anyone in the building, even if it is encrypted. Recently Amazon S3 went down and so did many parts of the internet during that time period. These just show you the many issues faced with centralized storage.

Below is a comparison of the prices.

Sia's goal is to be the backbone storage layer of the internet. You can host and be paid in Siacoin for completeing the obligation of hosting, or you put data on the Sia cloud and pay the users in Siacoin. Not only that, you control your files, you own the key to them, so only you have access to your data, no one else. For instance, say you want to store a 40 megabyte (MB) file on the Sia decentralized cloud. When you put it on there, it is broken into 40 pieces and encrypted. So your data is spread across 40 nodes and you only need four pieces of the 40 to recover your data. This kind of redundancy makes it nearly impossible to cause a network to go down. It would have to all simultaneously go down.

Siacoin has competitors also in the world of blockchain decentralized cloud like Storj, Maidsafe, and Filecoin. Storj just made an major announcement that they were partnering with Filezilla, which will make Storj available to 15 million monthly users. Though Storj has had some issues internally, including their CFO/COO James Prestwich stepping down. Filecoin is about to have it's Initial Coin Offering (ICO) on July 27th, though it is going to be different from other ICO's. Filecoin's ICO is only open to accredited investors -- those making over $200,000/year or have a networth over $1 million -- keeping away less sophisticated investors who tend to cause more volatility in prices. It is going to launch it's ICO on Coinlist, whose goal is to make investing in token sales easier and mainstream. Maidsafe is still in alpha as we speak. Overall all four of these have the same goal of storing data on a decentralized cloud at a much cheaper rate than the current offerings in centralized storgage. This could bring major disruption to companies like Amazon whose main source of profitability is from AWS per Business Insider.

At the rate we store data now, it is very possible more than one of these four could be storing your data in the future. We store data now more than ever. Businesses focus so much more on analytics than they did 20 years ago.

One thing that stood out to me about Siacoin is the amount of participation their team has with the community. Whether it is on reddit or slack, the CEO and the developers are always there answering questions and are very transparent. For instance back in June, Sia made a big announcement that they would be making a Application-Specific Integrated Circuit (ASIC) miner called Obelisk for miners to mine Sia. This left a lot of members confused in the community (read more about by clicking on the link that will take you to reddit if you are interested.) Also, they answered a bunch of questions on why even make an ASIC, with reasons including to prevent more than one entity having the ability of doing a 51% attack. This is when a group of miners controls more than 50% of the hash rate, or computing power. This would allow the attackers to prevent new transactions from gaining confirmations, allowing them to halt payments on some or all users. Along with that their team is very focused on being the backbone storage layer of the internet and recently Sia just passed over the 1000 host mark.

A year from now it will be interesting to see where all four of these decentralized cloud storage stands. It wouldn't surprise me to see these four take over the cloud business in the next five years due to the fact that they are so much cheaper and secure than the current option which is centralized storage.

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Disclaimer: this author currently has a stake in Siacoin.