Blockchain storage is a way of saving data in a decentralized network which utilizes the unused hard disk space of users across the world to store files. The decentralized infrastructure is an alternative to centralized cloud storage and can solve many problems found in a centralized system.
How blockchain storage works
Blockchain relies on distributed ledger technology (DLT). The DLT acts as a decentralized database of information about transactions between various parties. Operations fill the DLT in chronological order and are stored in the ledger as a series of blocks. An interconnected chain is formed between blocks with each one referring to the block before it, thus creating a blockchain.
In blockchain storage, files are first broken apart in a process called sharding. Each shard is copied to prevent loss of data should an error occur during transmission. The files are also encrypted with a private key that makes it impossible for it to be viewed by other nodes in the network. The replicated shards are distributed among decentralized nodes all over the world. The interactions are recorded in the blockchain ledger, allowing the system to confirm and synchronize the transactions across the nodes in the blockchain. Blockchain storage is designed to save these interactions forever and the data can never be changed.
It is expected that within the next few years, the cloud computing industry will be interrupted by blockchain technology. This is due to the potential benefits blockchain can offer everyone, from clients to industry leaders.
Blockchain storage vs cloud storage
Blockchain storage presents a cheaper, more secure and more reliable alternative to centralized cloud storage.
Centralized cloud storage providers prevent the loss of data by making copies of the data and storing it in different data centers. The large amount of data that is duplicated in this process creates excessive amounts of surplus information. Also, cloud storage requires enterprise-grade hardware to create its data centers. These factors make centralized data storage significantly more expensive.
By taking advantage of the empty space on users' devices across the world, blockchain storage can cut up to 90% of the cost of centralized cloud storage. It also saves money by copying pieces of data to several devices on the network in an attempt to control redundancy and eliminate the risk of disruptions. Individuals and private businesses can even profit by renting out the unused space on their hard disks for others to use.
Advantages of blockchain storage
In addition to the advantages explained above, having data stored across dozens of individual nodes also gives blockchain storage major security benefits. Encrypting the files and distributing them across the decentralized network makes it harder for hackers to access the data. There is no central entity controlling access to files or possessing the keys needed to decrypt the files. The private keys are controlled entirely by the user, making it impossible for a third party to access the files. Sharding also makes it impossible for each node to view the contents of the complete file; providing even more privacy.
Blockchain storage will also create a faster and more customizable system since users are able to manipulate settings like the speed of retrieval and redundancy. It is likely that blockchain storage will exceed many centralized systems in terms of computing power, or speed.
Current blockchain storage projects
Sia Network, InterPlanetary File System (IPFS), Maidsafe and Storj are some of the most promising companies launching blockchain storage projects.
Sia is an open-source software and company that specializes in decentralized cloud storage technology. They provide a platform where users run their own private decentralized cloud. Sia does not accept payments from their customers.
IPFS is a peer-to-peer (P2P) hypermedia distribution system that is created to provide a permanent, decentralized method for storing and sharing files. Nodes within the IPFS network for a distributed file system that can be accessed in many ways, including FUSE and HTTP. Local files can be added to the IPFS network and made available to the world.
Maidsafe is a company whose goal is to create a new backbone which can be used to access, exchange and store data. The Maidsafe network can also be used to build decentralized applications (dapps).
Sia, Storj and IPFS have launched their own cryptocurrencies (Siacoin, Storjcoin and Filecoin) in an attempt to create a market for buying and selling decentralized storage and encouraging use. The major obstacle that companies launching blockchain storage projects will face is scalability.