Cloud storage is a lucrative area that is ripe for disruption, as well-established companies like Amazon and Dropbox currently drive the market. Given the fundamental benefits of a decentralized storage platform, many are now looking to blockchain projects as a more secure and affordable option for data storage.
While not fully decentralized, the Storj project is developing a platform for distributed cloud storage with elements integrated on the blockchain. Storj’s peer-to-peer cloud storage network offers client-side encryption that allows users to transfer and share data without reliance on a third party storage provider, like Amazon.
With the rapid growth of competitors like Sia, the Storj project looks to drive adoption through an easy to use platform that allows for quick, affordable and scalable data storage.
Interested in Storj? Here’s a quick rundown of the project:
Platform & Development
According to their white paper, Storj is a protocol that creates a distributed network for the formation and execution of storage contracts between peers. The Storj protocol enables peers on the network to negotiate contracts, transfer data, verify the integrity and availability of remote data, retrieve data, and pay other nodes.
New Storj coins are generated through “farming,” which is similar to proof-of-work mining, but, instead of utilizing GPUs, a miner provides HDD storage space to a network of users. While this isn’t incredibly lucrative right now, building HDD storage farms might become profitable as the Storj platform scales.
Storj implements a thin-client model that delegates trust to a dedicated server that manages data ownership, called a “bridge” (third-party). This is the main factor that ultimately makes Storj not a fully decentralized platform. Essentially, customers pay this trusted third party (Storj Labs) for data storage services from farmers, and the third party pays out to farmers for their storage space. This intermediary player has caused some concern among those looking for a truly decentralized application, as any third party system opens up the platform to security breaches and downtime.
Storj currently relies on a client on FileZilla for their front-end data submission system. According to Storj, FileZilla “incorporates the Storj asynchronous multi-platform C library for encrypted file transfer on the Storj network into its back end to ensure the highest level of performance and stability.” Here’s basically how it works for the average user:
- Download the FileZilla client
- Add a new site in the Site Manager and select Storj as the protocol
- Enter api.storj.io as the host and 443 as the port
- Enter the bridge username and password
- If you have not created an Encryption Key before, generate a new one, otherwise, add your existing key
- Connect to the server and begin uploading and downloading files
From a storage provider’s standpoint, the process is very simple to get started. Leveraging a 1-click starter, providers are able to quickly rent out extra hard drive space to the network.
As of March 2018, Storj is accepting new customers on a per-user basis. This is due in large part to the expansive network testing and feature implementation process that their development team is currently undergoing. If you want to register today, you will be met with this message:
Due to extreme demand, we are limiting new account activation as we build the next generation of our network. Creating an account will enroll you to be considered for testing on our existing network as well as access to the new network. You will receive an email shortly with further details.
While both projects are in an early testing and development stage, Storj and Sia are quickly becoming well-known names in the cryptocurrency world. Here’s a quick side-by-side comparison of Storj and Sia:
- Fixed pricing, pay as you go.
- Easy to use, built for individuals and corporations.
- No storage marketplace.
- Not fully decentralized, thus potential for security breaches and downtime.
- Variety of payment options.
- Fully decentralized, no single point failures.
- Payments made directly to storage farmers.
- Money is held as collateral until the contract is completed.
- Not fully intuitive to individuals and corporations not familiar with blockchain technology.
- Siacoin is only payment option.
As you can see, there are positives and negatives to both projects, and each could potentially fill different niches in the new data storage market.
The Storj Labs team is fully transparent and well rounded. The project functions a lot like a startup company and has actively worked to develop ongoing corporate partnerships and clients. Storj recently appointed Ben Golub as executive chairman and interim CEO.
Storj (STORJ) currently has a market cap of ~$85 million with a circulating supply of 133,425,493 STORJ and a total supply of 424,999,998 STORJ.
Storj provides an intriguing alternative to Sia and is a definite step above current cloud-based storage platforms. While the project is not fully-decentralized, its peer-to-peer system allows for convenient and affordable data storage options.
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Disclaimer: The author(s) of this article may have a position in one or more of the securities mentioned above. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.