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Powering decentralized cloud storage with blockchains

I first got a home computer around 1993. At that time, I’d never heard of the Internet; it was a project that a few thousand academic and military professionals used. I played around with fully-offline computers until 1997, when my digital life sprouted an online component. Now, in 2017, the fully-offline computer is going the way of the dinosaur and the phonebook, and we are transitioning to a fully-online system.

To move computing fully online, we need to build online structures that do the two fundamental things that computers do: compute data and store it. Cloud computation is a subject for another day, but cloud storage is a huge and growing market. In the transition to fully-online computing, we need to build a huge online storage infrastructure. According to marketsandmarkets.com,  “The cloud storage market size is estimated to grow from USD 23.76 Billion in 2016 to USD 74.94 Billion by 2021.”

Amazon S3 is currently the biggest player in cloud storage. Amazon’s quarterly reports do not disclose how much they make from S3, but they claim to store 900 petabytes, and charge $0.03 USD per gigabyte per month, which implies a revenue of $27 million per month, or $324 million per year.

Of course, Amazon S3 is centralized storage, and if you’re reading this, I probably don’t have to convince you of the disadvantages of a centralized system: Amazon can monitor and censor data in S3, be forced to disclose your data by an anti-privacy regime, be hacked, or can simply mess up and lose the data.

Storj is a start-up aiming to replace Amazon S3 with a decentralized, encrypted alternative, with blockchain-based payments issued to people who lease out their spare hard-drive space for cloud storage.

Decentralized data storage is nothing new. Bittorrent was introduced in 2001, and it worked so well that it grew to control 43-70% of all internet traffic. The Interplanetary File System (IPFS) extends the Bittorrent concept to websites you view in your browser.

Bitcoin’s runaway success gave decentralists a shot of encouragement, because it showed that there can be billions of dollars in making decentralized systems that solve real problems. Many decentralized projects prior to Bitcoin were labors of love, but now there are millions of dollars being invested in the area.

Both Bittorrent and IPFS are free protocols, rather than businesses. Bittorrent is strongly associated with free culture, and IPFS is a protocol, and no more a ‘business’ than HTTP is a business.

Storj opts for a more capitalist approach. It lets users rent storage space from their peers on the network, with all the payments taken care of by a blockchain-based cryptocurrency. Storj aims to be a free market platform for data storage, allowing people with empty hard-drive space to compete with each other to offer storage services at the best price. But – as Bittorrent shows – decentralized, peer-to-peer sharing is already a significant player in how data is distributed online. In a way, Storj and Bittorrent use similar technologies but totally different economic models, with Storj based on free trade, and Bittorrent based on mutual free giving.

I spoke with Shawn Wilkinson, the founder, CEO, and CTO, about Storj:

What is Storj?

Storj is a decentralized and distributed cloud storage platform. We allow users to rent their extra hard drive space and bandwidth to our network. On the other side, we provide developer with high speed, secure, private storage at half the price of traditional cloud storage providers.

When did you first have the idea for Storj?

I was working on a project that was storing a large amount of data from Twitter. Services like Amazon S3 cost 30 times as much as storing it myself. I didn’t want to pay that, or manage it myself, so I thought, “What if I could pay a network of people to store my data for me?” Around this time I was involved in Bitcoin, and it had grown to be an order of magnitude larger than the top 500 supercomputers in the world combined. It just clicked that this technology was the solution to my problem.

The blockchain space seems crowded with hundreds of projects. What mistakes do you see blockchain projects making?

Projects that are more excited about the generic technology then trying to solve a real problem. It is easy to sell an idea, but unfortunately these projects end up folding because that is not sustainable.

What obstacles do you think stand in the way of widespread adoption of blockchain technology?

Ease of use! There are so many cool projects and technologies that still need to be built to a level where many people can use it.

What about the upsides? Have you found that decentralized or blockchain models offers unique advantages to a start-up?

For better or for worse, people are really interested in Bitcoin/blockchain. People really perk up when you mention it. Just means more people are willing to try Storj out, learn about it, and take our calls because it’s cutting-edge tech rather than your generic cloud storage startup.

What is the current state of Storj?

We are currently storing 1,300 TB of data, and have over 15,000 developers signed up for our API. Usage and users are growing at a pretty impressive rate, and we are currently working on some pretty exciting integrations. These integrations will make Storj easier to use, and expand the user-base considerably.

The above is to be considered opinion and not investment advice in any way, as an unbiased media, no one interferes with the Editorial content of CryptoInsider.com, writers have freedom to choose their own direction, members of Crypto Insider do not participate in trades based on content.

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