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Top Seven Decentralized Storage Crypto Projects
Data storage and cloud computing are the most popular businesses among the ones utilizing blockchain technology. Instead of storing files and data on centralized servers (like Google Drive, Dropbox or Amazon), platforms such as Sia or Storj have begun to use blockchain to decentralize data storage. By splitting files into multiple pieces, encrypting them and sending them to harddrives located around the world, individuals and companies can rent out their unused space to earn profits.
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Decentralized storage benefits
- Increased anonymity. Decentralized storage is harder to attack than traditional centralized systems. In a decentralized network, files are disassembled and distributed across multiple nodes in a process called segmentation. These files are encrypted with a private key, making it impossible for an individual file to be viewed by another node participating in the network;
- Security. If nodes in a centralized system crash (server issues), data integrity becomes questionable. In a decentralized system, the termination of a few nodes does not affect the whole network;
- Economic incentive. Projects in the field of decentralized data storage have their own tokens, which allow network participants can to get additional profits;
- Low cost. The cost of data storage on a decentralized basis is lower than with centralized rivals like Microsoft Azure and the likes.
Promising decentralized storage projects
Sia (SC) helps participants around the world benefit from their unused hard drive space. Sia network is impressive as it has a wide and fairly even distribution of its host servers and users around the world. Stored files are encrypted and distributed amongst multiple locations and hosts. Consequently, all information is not stored in one place, and it is accessed via private encryption keys. The advantage of this approach is in the minimization of security failure likelihood.
The project is quite mature considering the age of the cryptocurrency industry itself. The idea for Sia came to Nebulous developers David Vorik and Luke Champin back in 2013. Procyon Ventures, Fenbushi Capital and private investor Xiaolai Li invested in the cryptocurrency startup at the early development stages. The beta version of the platform was launched in 2015, and by January 2018, the price of SC reached an all time high (ATH) of $0.1117.
The project is still in the focus of crypto investors, especially against the backdrop of the current bullish trend. Since its inception, platform users have already saved more than 4 Petabytes of data utilizing 925,000 smart contracts.
Filecoin (FIL) is a peer-to-peer (p2p) network that allows users to store files securely and has several built-in economic incentives. Users have to pay Storage Miners for keeping their information. Thus, two types of participants can join the Filecoin network: those who want secure storage at competitive prices and those who want to earn by securely storing other users’ data.
Filecoin was based on another p2p file storage and retrieval protocol called the InterPlanetary File System (IPFS). This platform is very similar to Filecoin, but it does not have any financial incentive. Users can share data and storage space for free using the IPFS network. However, you can’t profit utilizing this protocol. Thus, Filecoin enhanced the storage model with the incentive of FIL token mining.
Filecoin users pay miners to store, organize and distribute data. Miners are rewarded for their efforts in the form of FIL tokens. The open market determines the cost of associated fees. The Filecoin network is supported by two types of miners. Each of these miners is paid to provide storage space for the users. Interestingly, in the Filecoin ecosystem, the miners compete with each other by offering the lowest price for storage. Best of all, the only criteria for becoming a miner is having free hard drive space and an Internet connection. However, if you become a miner, you will be evaluated based on your reliability and the value of the offered storage.
Filecoin is based on two consensus mechanisms: Proof-of-Replication and Proof-of-Spacetime. The Proof-of-Replication mechanism verifies that the miner has actually stored the number of copies of data it claims to have on its drive. The Proof-of-Spacetime mechanism is responsible for ensuring that the miner continues to store a unique piece of data for the network.
These systems allow Filecoin to autonomously detect faulty miners. Each miner’s history is stored in the protocol. Each miner is rated for reliability, price and availability. Reasonably, the miners with the highest reputation receive more storage requests. Consequently, they benefit from more rewards.
The value of a FIL token depends on two major factors:
- A number of people, willing to provide secure storage through the Filecoin network;
- A number of users, willing to pay to store their files.
To understand what BitTorrent (BTT) crypto is and how it works, we have to start with the company lying at its base – BitTorrent Inc. It was founded in 2001 by the famous American software engineer Bram Cohen as one of the first torrent clients. BitTorrent is a decentralized p2p protocol that allows hundreds of millions of users to upload and download files. Today, it is the leading p2p network in the world in terms of the number of users, quality of service, and overall popularity.
Here’s how BitTorrent works: large files are split into fragments and sent to the recipient over the network to be later restored on the recipient’s device. Every user who downloads a file automatically becomes a part of the ecosystem.
Seeds and Peers are the two roles a user can play on the BitTorrent platform. The first is the person who shares a full version of the file, while the peer receives the requested file in parts. The user continues to be a seed as long as the file remains on their Internet-connected device.
In July 2018, Justin Sun, a founder of Tron Foundation (TRX), bought BitTorrent Inc. for $127 million. Crypto analysts and market experts agree that it was an extremely profitable venture. Bram Cohen, the founder of BitTorrent, declined to continue participating in the project, although Sun offered him such an opportunity. In January 2019, Tron held an ICO for the BTT token and raised $7,200,000, selling 60 billion BTT in a matter of minutes. At the time, the token was worth $0.00012. In just a few days, those who bought the coin during the crowdsale were able to fix up to 800% profits.
BTT is a TRC-10 standard token on the Tron blockchain. It was created to enhance the BitTorrent protocol and combine it with the blockchain. Now seeds don’t just share files but also get rewarded for doing so in the form of BTT. They are not required to buy expensive equipment (like miners do) or participate in staking. Users are paid for simply storing a file on their computer. You can download a copy of a book, a movie, or a full album of your favorite artist to your laptop and earn cryptocurrency for sharing it with others. That’s what makes BitTorrent such an attractive project in this area.
The Ocean Protocol (OCEAN) project is working on creating a decentralized platform for sharing data, especially info created by AI. It utilizes blockchain technology, tokens and smart contracts to connect data consumers with information providers. This allows data to be exchanged in a trustless way with guaranteed transparency and traceability for all participants.
Users can control the flow of their data without being tied to any particular trading floor. The project combines blockchain technology with a data exchange platform to create a complete ecosystem. Users and businesses will be able to participate in a new data economy that spreads across the world, affecting every business, every individual and every device.
There is a wide range of participants in the Ocean community, from AI developers to businesses and nonprofit corporations to crypto-enthusiasts and other users, who believe in the future offered by the Ocean Protocol. As the blockchain moves on to v4 and v5, it will be fully decentralized in its funding as management becomes fully decentralized.
Storj (STORJ) is another cloud storage platform based on the Ethereum blockchain. Every member of a network called Tardigrade can offer free space on their local medium of storage. To become part of the Storj ecosystem, all you need is free disk space and adequate bandwidth to exchange information.
Storj, like other similar services, offers several advantages over traditional cloud storage solutions. As data is encrypted and sharded at the source, there is virtually no way for unauthorized third parties to access the information. Storage is naturally distributed, which in turn increases availability and download speeds through using multiple concurrent connections.
The SAFE network is a peer-to-peer, decentralized data and communication network created by Maidsafe.net. The network supports fully encrypted data storage and file sharing. Clients can use the network anonymously and enjoy its censorship resistance. The system utilizes a scalable token, which ensures low transaction fees.
MAID token cannot be mined but can be farmed. The network uses the Proof-of-Resource algorithm. There are two main participants in the system: “farmers” and “clients”:
- Clients have access to view and store data, as well as to transfer funds;
- Farmers store and organize the data.
The software connects farmers to the SAFE network and stores the data on the computer. The data vault has several levels. The farmer starts at the first level and processes the data together with a random group of farmers; as the node moves from group to group, its age increases. Thus farmers can get the Elder Vault role, which gives the right to vote on the group’s actions towards the stored data.
- Blockweave technology. A cloud archive, which functions on the basis of the Proof-of-Access algorithm. Blockweave allows you to store a huge amount of data at the lowest possible cost due to its structure;
- Proof-of-Access. This algorithm allows to generate new blocks with only information about the current block and any other block provided to the miner by the system;
- Wildfire. This is a system that ranks each node locally. It determines how quickly new blocks and transactions are distributed among the nodes;
- Blockshadows technology. Blockshadows may theoretically provide a throughput of 5,000 transactions per second.
The big question is whether decentralized data storage will replace traditional solutions. Will this form of open-source storage be a serious competitor to centralized solutions by Amazon, Dropbox, and others? One disadvantage of many startups in this field lies in the “remoteness” of their solutions from the perception of an average user, a flaw seen in many crypto projects and DApps. Customers may be tempted to start using such a decentralized storage service only if it is as intuitive as (and cheaper than) the competitors’ solution.
However, decentralized storage technology still has a future. People who have extra harddrive space can be rewarded in cryptocurrency for storing someone else’s files without compromising privacy. Given how many web pages and files that existed in the early days of the Internet are now lost, decentralized storage can help prevent our digital legacy from disappearing without a trace.