According to IDC’s “Global Enterprise Infrastructure Quarterly Tracker: Buyer and Cloud Deployment” report, the global cloud storage market is expected to reach more than $ 100 billion between 2020 and 2025.
Although centralized cloud storage solutions are the dominant cloud storage technology, they have many drawbacks.
Frequent data leaks, server failures, centralized operational control and hacking incidents have caused more and more developers to think about how to store data in a safe, stable and inexpensive way.
The development of blockchain technology offers a new opportunity for decentralized storage services.
What is the decentralized storage protocol?
Based on blockchain technology, decentralized storage protocols introduce an incentive system into its ecosystem with a tokenomic model to achieve distributed and piecewise data storage on multiple network nodes.
There are two broad categories of decentralized storage protocols.
One uses storage as arithmetic power, and users exploit it by providing space on the hard drive. This consensus mechanism is compared to Bitcoin-type projects, and the representative project is Siacoin.
The other is storage as a service, providing adequate storage as arithmetic power – the user completes the data storage service for mining. Representative projects are Filecoin, Arweave and BitTorrent.
Why are decentralized storage protocols needed?
The blockchain is a simple digital ledger of transactions that is replicated and distributed across the network of computer systems. Relying on the blockchain, a cloud storage protocol has the characteristics of decentralization and encrypted storage, and it builds a reliable and decentralized data storage mechanism.
In the decentralized storage protocol, all data blocks are checked. Workers must verify all deposited data, modified to prevent data tampering.
Distributed storage technology systems perform load balancing and prevent traffic from concentrating in one location, reducing the speed of data storage and retrieval. As they store multiple copies of the original data in various places, users do not experience any data loss even if a machine crashes or stops working.
For security reasons, each copy of data is encrypted, cut and stored with several redundancies in the nodes of the network. Only the private key can get the data, decrypt it and display it with digital currency. And since the data is stored in a decentralized manner, any intruder trying to hack these storage nodes will only get part of the data, not the entire data file.
The number of decentralized storage nodes is infinitely scalable and each node can flexibly adjust the storage capacity and quality according to its resources.
With the emergence of millions of decentralized nodes, the market will be more competitive and open. Powerful centralized storage providers cannot control the cost of data storage, which will allow fairer pricing for the entire storage services market and favor nodes to improve the quality of storage services.
Comparison of four decentralized storage protocol projects and data performance
Decentralized storage protocols are an effective addition to cloud storage. In the age of Web 3.0, where data security and ownership of user data are more critical, its reliability, security, scalability, and fair pricing will continue to attract more businesses, especially companies from blockchain.
Footprint Analytics summarizes a side-by-side comparison using Arweave, Filecoin, BitTorrent, and Siacoin as project representatives.
According to Footprint Analytics, the token market capitalization performance of the above four projects is as follows:
- Filecoin still holds the leading position in decentralized storage protocols.
- Arweave, which became the data storage protocol for the Solana blockchain in August, has seen its token price rise rapidly and its market capitalization is comparable to that of the BitTorrent BTT token.
- Siacoin, on the other hand, was a mediocre performer, unable to make a breakthrough.
- In general, the development of decentralized storage protocols is still relatively slow.
Decentralized storage protocols are an effective addition to cloud storage. In the age of Web 3.0, where data security and ownership of user data are more important, its reliability, security, scalability and fair pricing will continue to attract more businesses, especially companies from blockchain.
The curtain of the Web 3.0 revolution has just opened and the popularity of decentralized storage has yet to be sustained in terms of infrastructure, funding, talent and social consensus.
Most decentralized storage protocols are still in the concept formation or development stage, and national policies will influence the development of the industry as well. Based on different national policies and market consensus, centralized storage platforms will continue to be the primary storage method for a period of time.
Disclaimer: The contents of this article represent the opinions of Footprint and are provided for informational purposes only and do not constitute investment advice.
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