With the increased demand for data storage, businesses and consumers have turned to centralized cloud-storage options to keep sensitive data and information, where everything from personal photographs to confidential business documents are stored. However, these centralized services, because of their centralization, are prone to hacking and data theft, creating chaos for users. In fact, hacking to cloud storage accounts is not all that difficult, as many celebrities found out in 2014. Additionally, pricing in the industry is entirely determined by the controlling third-party, where users are often overcharged for storage services.
Dropbox may be the most well known cloud-storage option for consumers and businesses alike, and the service currently has over 500 million users. However, even Dropbox is prone to the centralized problems of the industry, as seen in the 2012 data breach that released email and password information for 68 million users, which were then subsequently sold on the darknet.
Google Drive offers another file storage option, but one that is controlled by one of the largest companies in the world, which, according to their security policy, is allowed to view and store user files without their consent. Both of these cloud storage options are by far the market leaders in the industry and other solutions present similar services as both Google and Dropbox.
The Decentralized Solution
Decentralized solutions to cloud-storage allow for data to be encrypted, partitioned, and distributed across an extensive network, creating an environment that makes hacking and data theft a thing of the past. Instead of malicious actors being provided with one centralized point of attack, they would need to gain access to a wide network to decrypt and piece together pieces of a file to gain access. As long as users are safe with their private key and wallet information, decentralized solutions provide the most secure storage of any data.
Additionally, blockchain-based solutions for file storage allow users with excess storage space to sell that space on the open market, creating a new form of storage efficiency that never existed previously. Instead of prices being set by the centralized controlling party, they are set by the market of buyers and sellers who agree upon the going rate of file storage given the current market conditions.
Cloud-storage was one of the first, and most significant, proposed use cases for cryptocurrency and blockchain technology. Due to this, there are many projects already in existence working to provide decentralized cloud-storage marketplaces. Filecoin may have the biggest name and backing, with investments from Sequoia Capital and Andreessen Horowitz among others, but it has yet to launch and is still a large unknown. Storj and Sia are both projects that have working products and marketplaces for users to purchase and sell cloud storage space but have yet to dominate the market. As the industry is still in its infancy, it is unclear which of these projects will emerge as the market leader for a decentralized cloud-based storage solution.
Originally published at cryptodisrupt.com on May 9, 2018.