Siacoin is a decentralized blockchain-based cloud storage platform. Siacoin stores your data by splitting apart, encrypting and then distributing it across their decentralized network.
Siacoin has been able to dramatically reduce the overhead costs of cloud storage by allowing users to host or in a sense “rent out” their unused hard drive. For this reason, a lot of people have started calling Siacoin the “Airbnb of hard drives”.
They have set out to disrupt some big players in the industry such as Dropbox, Amazon A3, Google Drive and Onedrive by offering low-cost and decentralized storage solutions.
How Does Siacoin Work?
Siacoin is completely private. It splits apart and decodes all of the data which a user stores on the blockchain onto numerous host’s devices. No one device has an entire file and all the files are copied on numerous devices, so if a hard drives fails your files won’t be lost.
Since you hold all the keys, only you can control the files. It is impossible to reassemble the files stored on Sia’s network without these private keys. This is in contrast to traditional cloud storage companies. They are centralized, vulnerable to hacker attack and the companies which control the storage systems completely control the files themselves.
Since it is impossible for anyone without the private keys to decrypt the encoded files, Siacoin will never be able to read through your documents in order to target you in marketing campaigns.
Aside from this, since Siacoin is completely decentralized, all the files stored on their network are spread over numerous nodes across the globe. This ensures that not only there is no one point of failure, but also that the highest possible upload and download speeds will always be obtained.
The Market Determines the Hosting Price
Another great thing about Siacoin is that hosts can determine their own prices for renting out their hard drives (similar to the Airbnb model). This ensures that the prices will stay competitive as time goes on.
Currently, Siacoin’s services are much less expensive compared to the major players. Siacoin charges around US$2 for every terabyte of data stored on the network. Prices of Sia’s competitors vary, but they generally range anywhere from US$10-20 per terabyte. Up-to-date prices of Sia’s services can be found here.
What About the Coins?
Users who wish to store their files on Sia’s platform are required to pay for the services with Siacoins. In addition, hosts will be paid in Siacoins for renting out their hard drives.
There is no limit to the total supply of Siacoins and all Siacoins must be mined. The reward for the first block mined was 300,000 Siacoins. Over time, the reward per block will slowly decrease until it reaches 30,000 Siacoins per block, which will occur sometime around January 2023. This means that unlike Bitcoin, Siacoin is inflationary.
An investor may turn up his nose at this. After all, isn’t one of the greatest things about investing in cryptocurrencies is that they are deflationary?
From the very beginning, founder David Vorick predicted this would be a common gripe in the community. In the original post where the Sia program was announced to the public, Vorick stated that they wanted to “do it this way because [they] want the coins to be about the storage, not about the speculation”.
He also noted that “there will be explosive growth in the first 4 years” and that there is a lot of opportunity to jump on the coin early. A quick look at Siacoin’s growth over the past years will show you that Vorick’s prediction came true.
History of Siacoin and Team
The idea for Sia originated in the summer of 2013, when now-CEO David Vorick began emailing fellow Rensselaer Polytechnic Institute student Luke Champine his ideas about the project. At the HackMIT hackathon the following September, Vorick drafted an initial whitepaper for the project and began sharing it with the community and his friends.
After receiving a lot of positive feedback about the project, Vorick and Champine decided to pursue the project full time. Sia was able to raise money through a crowdfunding campaign where “Sianotes” were sold on the NXT platform, and then later exchanged for Siacoins.
Since the crowdfunding, Sia has successfully raised $1.65 million through venture capitalist funding and grants. The list of these venture capitalist include Procyon Ventures, Fenbushi Capital, and angel investor Xiaolai Li. Probably the most notable investor is James Pallota’s investment company, Raptor Group.
According the official Sia wiki, Sia currently has 4 core developers, a community manager and an operations manager. The development team is very active on the Sia reddit and Discord. More information on the team can be found here.
Competitors and Challenges
The decentralization and low price Siacoin offers do come with a cost. Centralized options such as Amazon and Dropbox are very fast. It will be difficult for Siacoin (or any platform using blockchain) to compete with the speed provided by the current players. For data which need to be accessed quickly or regularly, these traditional options are currently the better choice.
But there are many commonly-stored things which aren’t what you might think of as “time sensitive”. Think, for instance, of old photos and videos. These tend to be rarely accessed and, when or if they ever are, users may be willing to sacrifice some speed for huge cost savings and peace of mind which comes with Siacoin’s added security and privacy.
In addition to competing with some of the internet’s tech giants, there are a few other cryptocurrencies also attempting to disrupt the cloud storage market, most notably Storj and Maidsafe. Sia claims to be more decentralized and secure. A quick analysis of the three coins can be found here.
How to Buy Siacoin
In order to store any of your files with Sia, you will need to download one of their wallets. Sia currently has a Linux, Mac and PC desktop wallet available for download.
There is a handy step-by-step guide to creating your own Sia wallet that can be found here.
Sia has received a lot of attention in the past year, and for good reason. The team has been spending their time building a solid project from the ground up. They have put very little effort into marketing and promoting their platform, and have instead opted to let the results speak for themselves.
They have produced a strong platform and have put themselves in a good position to give the tech giants a run for their money.
With the global market for cloud storage expected to increase from US$24 billion in 2016 to around US$75 billion by 2021, it appears that Sia has come around at the right time to capitalize on this fast-growing market. Sia is definitely a project worth keeping your eye on.