In the sudden explosion of ICOs at the end of 2017, the average investor began to question what really needed a blockchain. Dozens of projects seemed to use blockchain as a novelty, rather than a necessity. Hidden among these projects, a handful of truly innovative systems are being developed that rely heavily on blockchain technology. One such project is Siacoin (SC), a decentralized file sharing network, uses blockchain tech to trustlessly encrypt and shard data – while incentivizing storage through cryptocurrency distribution.
Siacoin’s model depends on independent data storage. Users offer their idle hard drive space for rent to the system, and receive compensation in the form of Siacoin itself. However, in order to join the data storage pool, they need to ‘stake’ a certain amount of Siacoin. In effect, they buy into the system. Further, if their computer is offline – thereby making the files stored there inaccessible – they are penalized Siacoin from their stake.
How Siacoin Works
The key to Siacoin is in their distribution model. User’s information is not only encrypted upon delivery to the system – it is also sharded. Sharding involves splitting any given complete file into parcels of data called ‘shards.’ These shards are then sent to disparate storage locations, making it nearly impossible to access the data without proper authorization. A malicious actor would need to assemble all of the shards before they could even begin to decrypt the information.
Users wishing to store their data on the Siacoin cloud would pay into the system. This would both pay for network upkeep, and pay the users providing storage from their own computers. The entire ecosystem is similar to the Proof of Work mining concept – but with transactions/mining swapped with storing/storage.
The Cloud Computing Market
Centralized products like Amazon Web Services and Google Drive are making it easy for the average user to store their information in the ‘cloud.’ Accessible from any device and free from the possibility of hard drive failure, the cloud is an alluring alternative to traditional storage. However, major tech companies are suffering from their data protection policies. Users have little trust that Amazon or Google will not harvest their data for their own purposes – let alone protect them from malicious actors.
As such, blockchain cloud storage that has no third-party involved will become more attractive over time. As the barrier of entry lowers, and the user interface grows easier to use, blockchain cloud storage stands a good chance of eclipsing its traditional counterpart.
Article By: Adam Stone