Is Blockchain Technology Really the Answer to Decentralized Storage? – Business and Finance tips and Advice

Is Blockchain Technology Really the Answer to Decentralized Storage?

The Blockchain has change into far more than a easy piece of know-how. It has change into an emblem for freedom, transparency and equity. With this being stated, it’s no surprise we see tasks leveraging Blockchain tech as a “one-size-fits-all” software to unravel all kinds of issues, a lot of which couldn’t be farther from the unique function of the Blockchain.

These days, the phrases “Blockchain know-how” are thrown round alot and generally the usage of the know-how itself is pointless. Tim Swanson, Director of Market Analysis at R3CEV has even coined the time period “chain washing” to explain corporations/startups which are utilizing or attempting to make use of Blockchain know-how in sure areas when in actual fact, they could possibly be utilizing extra superior know-how for the aim at hand.

This turns into particularly evident in the case of file and information storage. Though the Bitcoin Blockchain is principally a decentralized database for transactions, accounts and balances, retaining that data on a decentralized ledger is already proving to be a problem as a consequence of capability points. Nonetheless, a number of tasks and firms insist on taking a look at Blockchain-based options for storage and, whereas there are clear circumstances of misguided enthusiasm in the case of the usage of Blockchain know-how, there are some tasks on the market which are price looking at.

Blockchain Know-how as an Incentive Layer

On the subject of a mutualistic relation between Decentralized Ledger Know-how (DLT) and information storage, the commonest use case for the Blockchain is as an incentive layer. Because of this information isn’t saved on the Blockchain itself, however the community at hand is ready to leverage the Blockchain as a ledger for automated funds and/or for worth alternate, enabling customers to pay for storage or entry to information.

On this case, the benefits for utilizing the Blockchain over another know-how are clear. These embody sooner settling instances, decrease transaction charges (which allow microtransactions), larger privateness and the flexibility for clear and immutable report retaining. Whereas the Blockchain isn’t getting used for information storage, it’s offering the muse on which the decentralized community is constructed, permitting it to run with no central authority in any way.

There are a number of tasks leveraging the Blockchain in such a approach. Storj, one of many first and most profitable decentralized storage networks on the cryptosphere, involves thoughts. The challenge began out utilizing a Bitcoin-based asset however later moved to an ERC20 token on the  Ethereum Blockchain. This token, the Storj Coin (SCJX), is utilized by shoppers to pay for storage and acts as an incentive for nodes that hold a part of the shopper’s information. These information have been beforehand shredded, encrypted, and distributed to a number of nodes so as to guarantee their security and availability.

One other widespread instance is Filecoin, a challenge developed by Protocol Labs, the creators of the InterPlanetary File System (IPFS). In case you aren’t conversant in IPFS, it’s an alternate p2p hypermedia protocol that permits information to be saved in a everlasting and decentralized vogue. This gives historic versioning for information, removes duplicates and even permits customers to avoid wasting on bandwidth since information are downloaded from a number of computer systems and never from a single server.

Whereas IPFS gives a foundation for the storage of information, Protocol Labs took this one step additional with the event of Filecoin which, based on the whitepaper, “works as an incentive layer on prime of IPFS.” The system is totally different from the one utilized by Storj on many ranges.

In Filecoin, miners are paid to retailer and retrieve information, whereas additionally receiving mining rewards from their “helpful Proof of Work.” There may be additionally no set value for file storage. As a substitute, customers and miners place purchase and promote orders in a decentralized storage alternate, making Filecoin a aggressive market by which costs can adapt to exterior circumstances.

Whereas Filecoin and Storj give attention to offering inexpensive cloud storage providers, a challenge named First rate is at present engaged on a decentralized content material sharing platform which permits customers to add and monetize/share their work (movies, music, ebooks, and so on) with out the necessity to depend on a centralized third occasion. Customers can entry content material in a way more inexpensive approach by skipping these intermediaries whereas the nodes that host the content material are rewarded with charges. Very like Storj, the information saved by the nodes on the First rate community are shredded and encrypted.

Blockchain for storage? Is it attainable?

Storing information on a Blockchain like Bitcoin could be doable, in concept. Nonetheless, Bitcoin’s present blocksize restrict solely permits for 1MB of knowledge to be saved each 10 minutes. Even if you happen to take away that restrict, nodes will ultimately cease having the ability to preserve a duplicate of the Blockchain as a consequence of its measurement, leading to a centralized and easily-disruptable community. In fact, the scalability downside hasn’t deterred builders from attempting to make use of the Blockchain as a storage resolution and a challenge referred to as Archain may have discovered an answer.

Archain is a cryptocurrency challenge that desires to deal with on-line censorship by making a decentralized archive for the web. To take action, Archain will leverage a brand new Blockchain-derivative information construction, the “blockweave” which based on the whitepaper, permits the community scale to an “arbitrary measurement.”

As soon as a person submits a web page for archiving on the Archain system, it’s saved on the blockweave with the charges paid by the person being allotted to the miner that finds the block at hand. Because the  Archain requires miners to retailer each the present block and a earlier block that has been randomly picked from the blockweave, miners have an incentive to retailer as a lot as the info as they’ll with out being pressured to retailer your complete blockweave.

As such, Archain is in a position to make sure that content material requested by customers is all the time out there with out the necessity for it to be saved by each single node on the community. Archain can be capable of handle obtain speeds by incentivising customers to propagate poorly-mirrored blocks.

Personal Blockchains?

You can not speak about chain washing for too lengthy with out speaking about non-public Blockchains. The idea of a personal Blockchain is, to a level, paradoxical as there may be actually no use for a Blockchain if the community is closed. To place it merely: If a Blockchain community will not be immutable, open or clear, then a daily database will normally be way more environment friendly than a Blockchain.

But there’s a little identified challenge leveraging a personal Blockchain together with the general public Waves Blockchain to offer shoppers with the “better of two worlds.” We’re speaking about Sigwo Applied sciences LLC, an organization that focuses on offering dApps and consulting providers for legacy companies that wish to combine Blockchain know-how for information storage and catastrophe restoration.

Though Sigwo Applied sciences LLC gives a variety of providers, its use of the Jupiter Blockchain, the Mercury token and the Waves Platform caught my consideration. Jupiter is a personal Blockchain constructed particularly for encrypted data storage. Totally different networks are created for various corporations, permitting approved nodes to hitch in and obtain the info on the chain. Thus far, Jupiter will not be a lot totally different from another non-public Blockchain. What makes it stand out is how Jupiter is ready to guarantee transparency and immutability regardless of being a personal Blockchain.

As soon as information is saved on Jupiter, the block hashes from the non-public Blockchain are saved completely on the Waves Blockchain. That is finished by including the block hash to a Waves transaction. Since Waves transaction could be paid for with a customized token, the Mercury token is used which makes the method inexpensive.

Since block hashes are saved on the Waves Blockchain, any change made to the non-public Blockchain will likely be publically detected. This occurs as a result of the hash from a sure block will all the time range based on the data contained within the block. What we’re left with is a Blockchain by which giant quantities of knowledge could be saved by specialised nodes (in contrast to public Blockchains) whereas remaining publicly verifiable.


As now we have seen, there aren’t any scarcity of tasks which are utilizing Blockchain know-how and cryptocurrencies to make decentralized storage attainable. Nonetheless, additionally it is price noting that DLT remains to be in its early levels and it’s attainable that different, extra superior applied sciences can substitute it with respect to particular use circumstances. In different phrases, Blockchain might not be the reply for every thing.

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