Siacoin : The next revolution in data storage

During the last decade, following the boom in mobile applications, we witnessed an exponential growth in the generated data volume, leading most businesses to store their users data through cloud solutions such as Amazon S3 or Google cloud. In other words, we move from a world where each businesses powered their own data centers to a  world where most of the data are now gathered by three major players (Amazon, Google and Microsoft) with little to no regards toward the rights of people over their own data and possible security risks in the event of an attack toward one of these data centers like in the case of Uber in 2017. In this sense, it appears interesting to try to decentralized the cloud technology through the use of the blockchain as proposed in the Sia project.

But first, what is Siacoin ?

Founded in 2014 by David Vorick and Luke Champine, Sia is basically a decentralized cloud storage platform allowing users to store data through the use of storage contracts among peers. In other words, it allows users to both rent out excess disk space and securely store files without relying on any trusted third part. As such, we can see that like most major blockchain projects, Sia is not aiming to reinvent the wheel but only try, by its use of the blockchain, to remove  the need for a trusted third party like Ripple in the financial sector with SWIFT.

How does it work ?

The Sia network is developed on a highly specialized blockchain that includes all the necessary features for a decentralized peer to peer files sharing network and, as bitcoin, relies on proof-of-work mining for generating consensus among its node. Moreover, the mechanism behind the functioning of its smart contract which allows decentralized storage on the network is quite simple. Indeed, in each case the host and the renter both put Siacoin (SC) in the file contract during its creation and then over the lifetime of the contract this initial funding is gradually given back to the host as he presents valid proof of storage to the network at periodical date.

Advantages and disadvantages

As for the other projects like Ripple or Ethereum, the use of a blockchain enables different possibilities that were previously not possible such as :

• Complete decentralization and true redundancy : Amazon S3 accomplishes redundancy by spreading files throughout regional data centers making each data center a large point of failure. At the opposite, on a decentralized blockchain, where data is stored on dozens of individual nodes intelligently spread around the globe, it is extremely difficult to cause meaningful disruptions.

• Total privacy : No third party controls user data or has access to user files. Each nodes only stores encrypted fragments of user data. Users control their own keys.

• Cost reductions : Blockchain storage cost around 1/10th of the price currently asked by major players on the market.

However, on the contrary of companies such as Amazon or Google which assume the responsibility of keeping safe user’s data, Sia is only proposing a P2P platform allowing decentralized storage not designed to protect either the host or the renter in contracts against diverse type of attacks such as :

• Block withholding attacks

• Closed window attacks

• Uncooperative host which keep user file hostage until the payment of a big fee

As such, host and users have to protect themselves through a good use of contracts and computing techniques like erasure codes as explained in the Sia white paper.

What are the economics behind it ?

The primary currency of the network used to fund contracts in the network and which can be trade on cryptocurrency exchanges such as Shapeshift Is Siacoin. However, unlike many other projects like Ripple or Storj, the Sia team didn’t premined Siacoin and instead created a secondary coin called Siafund which collects a 3.9% fee on all contract funds that they largely detain ( ≈88% of the total supply) in order to ensure their future funding proportionally to the use of the network and regardless of the market games affecting Siacoin.

Conclusion

Despite some delay in the UI development due to the departure of the main developer, last year and its late replacement earlier this year, Sia successfully met multiple deadline on its 2018 roadmap and started to keep track of the weekly development through their newly created youtube channel confirming its commitment to gradually increased the marketing around the Sia brand in order to attract new investors and partnerships. In this sense, given the strong technical knowledge of the Sia team and the tremendous potential of the blockchain in data storage it could be interesting to go long for the next 5 years on Siacoin and its direct competitor Storj in order to bet on the future development of this new type of storage platform.