By Brent Whitfield, CEO, DCG Technical Solutions Inc.
Even before cryptocurrencies and blockchain technology became established, forward-thinking technology groups like Mojo Nation and Tribler were exploring the possibilities of storing data over decentralized peer to peer distributed networks.
With the advent and spread of cloud computing and its huge centralized storage capacity, the pendulum seems, for now, to have swung back in favor of the corporate heavyweights such as Amazon, Microsoft and Google, especially with the roll-out of cut-price Reserved Instances (RIs).
But these tech giants should not take their dominance for granted. Riding on the back of the success of Bitcoin and other cryptocurrencies, several businesses have used blockchain technology to create decentralized storage with data stored either partly or wholly across nodes on a distributed network.
Which Crypto Providers Are Leading the Blockchain Storage Market?
Originating at HackMIT 2013, Sia is the biggest name in blockchain storage at this current time. Sia allows any computer owner to rent out their hard drive space in return for Siacoin (SC). As with other cryptocurrencies, Siacoin can also be mined and traded. Unlike many other cryptocurrencies, Siacoin do not have a limit on the number that can be mined.
With the Sia network, stored data is protected by encryption and smart contracts are used to guarantee payments, even if the stored data is never accessed. Should a storage disc or server go offline, the contracts will apply penalties.
In March 2018, Siacoin’s total market capitalization was just over $440 million.
FileCoin, by Protocol Labs, is still developing its network so actual coins are not yet available. When launched, FileCoin will be used to rent space on anything from a single hard drive to an entire data center. It can also be traded for U.S. dollars, BitCoin, Ether and other cryptocurrencies. FileCoin is known for its record-breaking $257 million ICO in 2017 and the attention received from the SEC over whether its use of SAFT (Simple Agreement for Future Tokens) was legitimate.
MaidSafeCoin (MAID) are currently the second biggest storage-based cryptocurrency with a $116 million market cap as of March 2018. MaidSafeCoins are actually proxy tokens which will be exchanged for SafeCoins once the decentralized SAFE network is up and running. This is a peer-to-peer storage, processing power and a data connectivity network which overlays the internet, replacing layers four to six of the OSI stack. Data is stored in Vaults and administered by ‘farmers’ who compete to access the data during retrieval. Farmers earn SafeCoins as a reward and can even level up to oversee so-called Elder Vaults.
The autonomous SAFE network will offer fully encrypted storage and file sharing, including money exchange, breaking up, hashing and encrypting data on upload. Redundant copies will also be made to provide protection from data loss. Since data is randomly distributed between computers, the network also offers preservation of anonymity and protection from censorship. SafeCoin will be a scalable and transaction fee-free cryptocurrency.
The MaidSafe name stands for Massive Array of Internet Disks, Secure Access for Everyone.
Storj uses the popular Ethereum network, offering a pay-as-you-go model and also the promise of no censorship, no monitoring and end-to-end encryption. Its market capitalization was just over $98 million in March 2018.
RapidGator are one of the latest businesses looking into creating a blockchain-based data storage marketplace. The file-sharing site is looking to raise $50 million through a token sale to fund its Market.space project. This will focus on leveraging the storage space of large hosting companies rather than that of the general public.
Can Blockchain Storage Solutions Really Compete with the Public Cloud Giants?
With cost being the most pressing issue for corporate cloud adopters, IT consulting companies are going to be coming under increasing pressure from their business clients to find cost-effective storage solutions. Those that are brave enough to think outside of the box may suggest dipping toes into the blockchain storage market. Using Siacoin to buy storage is currently a lot cheaper than the same service on Amazon S3, so there is a lot of potential for managed service and IT support providers to drive down costs if they can persuade their client to embrace blockchain.
The main barrier to mainstream adoption of distributed blockchain storage is likely to be one of trust. Just as cryptocurrencies have been vulnerable to hacking, potential users will be concerned that their precious data, or the cryptocurrencies they are using to pay for storage, may be lost or stolen.
On the other hand, there are plenty of people who are uncomfortable with the amount of data passing through Amazon AWS and Microsoft Azure public cloud networks. For them, the concept of decentralized storage, unmanaged nodes and end-to-end encryption could be a tempting prospect. Decentralized networks offer more robust redundancy than public cloud providers since data is not stored between a small numbers of servers.
Rather than adopting blockchain technology as a standalone service, it is likely that businesses will become exposed to them as part of hybrid cloud managed services. For example, in November 2017, New Zealand based IT firm ClearCenter acquired Minebox. Minebox provides Network Attached Storage devices which use the Sia blockchain network to back up storage data.
Other businesses may decide to trial blockchain storage for their least sensitive data. They may try various different networks as new market leaders spring up.
Blockchain technology may not usurp the big cloud giants overnight but they do offer low costs and a vastly different concept of how data storage can work in the 21st century and beyond. Amazon, Microsoft, Google, IBM and the rest will need to remain vigilant.
About the Author
Brent Whitfield is the CEO of DCG Technical Solutions Inc. DCG provides the specialist advice and IT Support Los Angeles area businesses need to remain competitive and productive, while being sensitive to limited IT budgets. Brent has been featured in Fast Company, CNBC, Network Computing, Reuters, and Yahoo Business. https://www.dcgla.com was recognized among the Top 10 Fastest Growing MSPs in North America by MSP mentor. Twitter: @DCGCloud