Cryptocurrencies Storage Solutions

Introduction

Decentralized data storage has emerged as a disrupter to traditional cloud storage and could represent a significant shift in the way organizations distribute and store data in the future. Numerous companies already offer decentralized storage options, some of which use blockchain technology to facilitate storage operations and validate transactions across a distributed network.

Decentralized Data Storage and Blockchain

Decentralized data storage products often use blockchain to track storage transactions. Blockchain is a distributed ledger technology that can automatically synchronize and validate storage transactions across distributed nodes. The blockchain ledger might record shard hashes, data locations, leasing costs, or other transaction-specific information.

With decentralized storage, data is encrypted and stored across multiple locations, or nodes, run by individuals or organizations that share their extra disk space for a fee. Essentially, a decentralized storage vendor often acts as a broker, matching those who need to store data with those who seek to lease their extra storage capacity. Regardless of where the data is stored, only the data’s owner holds the private encryption key; storage providers cannot access the data. In many cases, the files are also sharded and spread across multiple locations, providing yet another layer of storage security.

In many cases, decentralized storage networks are based on blockchain or similar technologies and deliver benefits such as data immutability, enhanced privacy, and better overall security. Decentralized networks are resilient because the storage doesn’t have a single point of failure.

Benefits of Decentralized Storage

When an organization uses a decentralized network primarily for storage, the main benefit is cost. Decentralized data storage is typically based around leased excess capacity, so it tends to be inexpensive.

Other benefits of decentralized storage include:

1. Enhanced Privacy: With decentralized storage, only the data owner holds the private encryption key, ensuring that storage providers cannot access the data.

2. Data Immutability: Blockchain-based decentralized storage solutions provide a tamper-proof record of storage transactions, ensuring the integrity of stored data.

3. Better Overall Security: Decentralized storage networks eliminate the risks associated with centralized storage, such as single points of failure and vulnerabilities to hacking or data breaches.

Decentralized Storage Network Vendors

Decentralized storage has been gaining traction in recent years, and numerous options are already on the market. Most of these products rely on blockchain to support their storage strategies. Here are seven decentralized data storage products to consider:

1. Arweave

While some of the other decentralized data storage offerings focus primarily on privacy or on avoiding censorship and monitoring, Arweave is designed for data permanence. Arweave itself is a blockchain-like peer-to-peer (P2P) storage protocol that offers extra storage capacity available on PCs acting as Arweave clients. The application that enables data storage and other functionality is called permaweb — an immutable environment for storing webpages and other types of data, such as databases and static files. Those who wish to store data are required to pay a one-time fee using Arweave tokens, which are available from most crypto exchanges.

2. BitTorrent

BitTorrent is one of the oldest and most well-known decentralized data storage networks. Founded in 2001, BitTorrent initially gained notoriety as a platform for sharing pirated media. Over time, BitTorrent evolved into an entire suite of products, including BitTorrent File System (BTFS).

BTFS is a scalable decentralized storage system designed to reduce storage costs, improve fault tolerance, and avoid government censorship. Like other distributed storage networks, BTFS relies on user nodes. One of the elements that distinguish BitTorrent from some of the other networks, however, is the more than 100 million user nodes in place. Additionally, BTFS is blockchain-based and uses the TRON network. There are more than 1,000 full TRON nodes, with 27 block producers designated as super representatives.

3. Filecoin

Filecoin is widely known for having had one of the largest initial coin offerings of all time, raising $257 million in 2017. Filecoin is a P2P network service that uses blockchain and native cryptocurrency to deliver storage services.

The cryptocurrency, referred to as FIL, supports all transactions. Users pay FIL to store their files. Miners, or storage node owners, earn FIL to store the files. The blockchain ledger records the transactions and provides proof that miners are storing files correctly. Filecoin is built on IPFS, a P2P hypermedia protocol designed to address some of the limitations of using HTTP for distributed storage.

4. MaidSafe and Safe Network

MaidSafe is a small team of individuals building the Safe Network, an autonomous global network made up of storage nodes. In doing so, MaidSafe sought to create a network that could not be turned off, blocked, censored, or controlled.

Collectively, the software manages storage across the network, routing data and messages securely between the nodes. Nodes are clustered into sections that control the data stored within them. Section formation and data movement are all autonomous operations, without the need for centralized servers, agents, or human oversight.

5. Sia

Like Filecoin, Sia uses blockchain to provide a decentralized data storage platform that encrypts and distributes files across a global P2P network. The Sia client software — available for Windows, Linux, and macOS — breaks each file into 30 segments, which it then distributes to different hosts.

6. Storj and Tardigrade

Storj is one of Sia’s top competitors and delivers similar services, including blockchain storage. Some confusion has surrounded Storj naming, however. Storj and Tardigrade referred to two different Storj Labs business areas. Storj focused on the supply side and Tardigrade on the demand side. Storj node operators provided decentralized storage to Tardigrade customers. Storj has since rolled its Tardigrade product under the Storj brand as Storj Decentralized Cloud Storage, according to the vendor.

7. Utopia

The Utopia P2P network is designed to act as a tool for reclaiming online freedom and anonymity. It provides secure communications in a way that prevents government and third-party surveillance. Online communications are provided by Curve25519 high-speed elliptic curve cryptography, whereas local storage is encrypted with AES-256.

Conclusion

Decentralized storage solutions based on blockchain technology offer numerous benefits, including enhanced privacy, data immutability, and better overall security. Organizations can choose from a variety of decentralized storage network vendors, each with its own unique features and advantages. By adopting decentralized storage solutions, organizations can reduce costs, improve data security, and ensure the availability and integrity of their stored data.