Crypto Review — Siacoin (SC)

For my first review I will be going over Sia — one of the players in the decentralized storage space. The cloud storage industry is massive and companies like Sia are hoping to put a dent in the dominance Amazon, Microsoft, and Google have enjoyed over the past decade.

Sia_Sia's decentralized cloud is on average 10x less expensive than current cloud storage providers. Storing 1TB on Sia…_sia.tech

It took a while but I am finally picking back up on my crypto review series. If you haven't read my previous articles, please check out my intro to bitcoin.

Getting Started With Bitcoin_How to dip your toes in from a non-technical perspective…_medium.com

And my intro to the crypto review series

Crypto Review Series — Introduction_“But I don’t want to go among mad people,” Alice remarked.“Oh, you can’t help that,” said the Cat: “we’re all mad here…_medium.com

I will write about coins I am interested in, most likely I will own some (I own ~40 different coins now so that doesnt make them particularly special) but in no way is this investment advice — it is generally a way for me to align my thoughts — do your own research before investing!!

What is Sia? Basically storage — think dropbox, google drive, etc. The shtick is that it is decentralized, encrypted, peer to peer storage — although, no one party is holding the information you are storing — it is encrypted, multiplied, chopped into little bits, and then all those little bits are sent around to a bunch of different hosts. When you want access to your file, the appropriate bits are recompiled and you get your file. Think of your file as being in a T-1000 type state.

“Please SIA, can I have my photo of aunt Judy?” Sia: “One moment” ::ominous noises::

By building the framework and outsourcing the storage to anyone with a hard drive and an internet connection Sia has reduced overhead dramatically and can charge a much lower fee. They multiply the bits in case a node holding a piece of your file happens to be offline (even though they are incentivized not to be).

Now for some due diligence

People

Sia was created by David Vorick and Luke Champine of Nebulous Inc, a VC-funded startup in Boston.The idea of Sia was originally conceived at HackMIT 2013.

There really isnt much out there on David Vorick but not in the way that some of these scam coins have shady founders but more in the way where I am assuming he is more head down, focusing on the product. The VC firm seems legit but there isnt really any other crypto (when i checked) in their portfolio. It seems like they could use a marketing/evangelist type.

David’s online presence basically boils down to his medium posts and some youtube videos. This one also had the added benefit of talking through the different blockchain storage protocols. David jumps in at min 13. I like his tone for as much as thats worth.

Product

They have a product & users!!

There are two components that set Sia apart from other decentralized storage (STORJ, IPFS) on the pricing side. I have a reasonable understanding of STORJ, still looking into IPFS so these assumptions may not be 100%.

1. Price — Host (those with storage) sets the price they want. Its good because ideally market forces will find the price. Not good because it adds a step and could turn some users off.
2. File Contract — (Jump to min 29 in vid for their revenue model in relation to this) The structure makes a lot of sense, although I think it sacrifices some ease of use for a better incentive structure. I think we may be seeing a theme with Sia………

Product details can be picked up from their website but my take is that they are taking the whole decentralized thing to the max. This is great for decentralization maximalists but I do think it may limit the extent of their adoption.

They also tout the redundancy they get from storing file bits across multiple machines and incentivizing hosts to stay online.

A blockchain company with a live product? something is amiss

I haven't stored anything yet but but this shed some interesting light on the structure. You need to lock some funds up that you can then use to secure storage at whatever rate you are comfortable with. As adoption picks up a lot of the coins will be off the exchanges and locked up. Could lead to volatility of those outstanding or it may just find a nice equilibrium. Something to keep an eye on.

Coin

Duh

Biggest question with all these projects is — Do they reeeeeeeeally need their own token? Sia is issued on the blockchain where they issue the smart contracts. Im sure there are some more nitty gritty details that lay it out but it seems like a reasonable enough reason for a separate currency.

Financials

Heres what they are touting, directly from their front page

Now, this is really only a projection because the host(those with HD space to rent) set their own price (because its decentralized!!!)

It looks like from a list of active hosts that the going rate is ~2k SC per TB per month which at current rates (.00000570 BTC @ BTC = 2700 USD) comes out to a bit over $30. I think this is mostly because of the massive increase in price SC has seen over the past month (roughly 6x increase against USD, 4x against bitcoin) and my assumption that these are longer term contracts. I imagine the longer its out the more stable the price will become but as you can see it is truly global in scope so some volatility against USD will remain. I do think their claim in the chart above is a little misleading though since they are assuming hosts will be willing to be paid at that rate.

Coin creation

There are 26 billion or so SC now, and there will eventually by around 48 billion in 2023. The faster minting is a bit of a concern now but they seem to be gaining adoption at a decent clip. At the current price of 2k SC per terabyte per month when all 48,460,000,000 coins are mined they will have a capacity of 24.23 exabytes.

totally knew that

I couldn’t find information on exactly how much Amazon is storing total these days but I don’t think this is that crazy of a number. Driverless car, Image recognition, VR, AI, machine learning, other cool buzzwords — what do they all have in common? a need for massive amounts of data.

Activity/Transparency

Love this — a public Trello board with their roadmap

Trello_Organize anything, together. Trello is a collaboration tool that organizes your projects into boards. In one glance…_trello.com

There is a lot of useful information on their Pulse Site like the distribution of hosts.

and the current prices (I believe those are monthly)

They also seem very active in slack answering questions. It seems like David is making the rounds more now but to make the jump they will likely need to bring in some marketing folks. They are VERY open with the project which the community appreciates so if they deliver Im sure we will continue to hear more from them.

Conclusion

The next step for Sia in my opinion is landing a big partner or some applications built on it to gain some notoriety. My guess is STORJ will be more consumer focused, IPFS is going to land the enterprise projects, and Sia will fall somewhere in between but be popular with the projects striving for true full stack decentralization.

I really think some of the “Next 6 Months” items could trigger a jump — video streaming gets people excited, automatic host pricing will make it less manual, and supporting over 10 TB at a time should allow for more applications to be built on it.

Feel free to recommend a coin to dive into next, and as always, please do your own research and only invest as much as you can afford to lose.

Happy Investing!