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Decentralized data storage continues to thrive, with projects evolving beyond their ICO stage. Perhaps the most notable projects in the space include Sia, Filecoin, Storj, and MaidSafe. All of those coins have seen a slight boost to their market price in late 2020, based on the general reawakening of the crypto market. It is difficult to estimate the exact storage and computing happening in blockchain startups. Still, projects like Storj already have above 9,000 nodes, spread among several regions.
Decentralized storage is a more agile approach to databases, aiming to compete with large-scale cloud services. That competitor is a behemoth, with a market size of above $260B for Amazon Web Services. In 2020, AWS held a 31% market share, followed by Microsoft Azure, holding 20% of distributed computing and storage.
Within that climate, smaller independent projects can still exist, provided they supply value and cover the specific needs for cloud computing. Those needs range from personalized file storage to academic databases and business solutions.
Storj is the consummate decentralized tool for data storage. The network unites and uses consumer hardware, while paying out rewards in STORJ coins. The series of nodes, possibly above 9,200 worldwide, can always respond to a user requiring their stored data.
Storj also uses end-to-end encryption, along with file shredding. This ensures anonymity, as the project team is not accountable to any jurisdiction to provide data access.
The drawback of Storj is that it is still a relatively large network, with no warnings on node downtime. The network relies on user hardware, which could possibly fail at any one moment. In theory, a file is distributed enough to be accessible at all times. But on rare occasions, user reports will surface that Storj lost a file piece.
Filecoin is another decentralized storage solution with an emphasis on providing reliable storage space. The idea goes beyond sharing the idle capacity of consumer hard drives. Instead, Filecoin employs economic and gamified incentives, to reward its best operators.
Filecoin users can gain block rewards by providing more disk space, which may be specially dedicated to the coin’s network. Additionally, because Filecoin wants to ensure the availability of files, there is a technique called “slashing“, which penalizes participants for latency. Filecoin miners also need to take care and provide significant bandwidth with low latency.
The decentralized service of Apple, iCloud, can be used in conjunction with blockchain technology. The cloud-based storage already offers wallet backups, which prevent the irretrievable loss of a wallet. The iCloud approach keeps an encoded copy of the wallet, which can be salvaged even when losing the pass phrase or private key.
For now, iCloud does not offer on-chain data storage. Yet it is one possible solution for blockchain-backed space, due to its already established connection with wallet technology.
SINOVATE aims to become the innovative leader in decentralized storage. Its chief bid to differentiate the network are collateralized nodes. SINOVATE aims to take the most powerful elements of staking, to build up the incentive for its node operators.
The project allows for the creation of collateralized nodes, meaning the need to put down a deposit of SIN coins. Various tiers require 100K SIN, 500K or 1M coins, held as a deposit. Owning a 100K node carries a 100% return. A 500K node brings 25% return, and a 1M node brings back 24%, slightly lower to discourage the monopolization of the network by big players. With 1450+ nodes already added in just over a week, SINOVATE are well on their way to their initial target of 5000.
Unlike masternode coins, there is no way the node operator will take back the funds to dump on the market. A SINOVATE node burns the initial deposit immediately, then over the course of 12 months returns the sum in daily received rewards, adding the interest generated by operating the node. After the term ends, the node operator can renew their lease with another collateral deposit. This incentivises the market to grow demand for SIN, while supporting the network.
As we already noted, projects like Storj went through a growth phase in the past year, roughly raising the number of nodes from 6,000 to above 9,000. The underlying assets are also growing in value as altcoin markets are recovering.
Filecoin took a different approach, to ensure adequate liquidity. Its native tokens will participate in DeFi lending, to ensure price discovery and availability. The Filecoin mainnet launched on October 15, 2020, ensuring immediate liquidity through those protocols, as well as through the Gemini exchange.
Each blockchain startup made its brand of innovations. Storj was a pioneer, with a truly decentralized network, which however was prone to loss and outages. But Storj also used Ethereum, which remains a single point of failure, especially after relying on services like Infura to keep the state of the network updated. Filecoin took years to develop its mainnet, and is still in the process of recruiting miners and making its tokenomics work.
Centralized cloud projects are still reluctant to fully adopt blockchain and crypto assets. Possibly technological issues and regulations are still making this alliance a potential problem.
SINOVATE aims to ensure an agile platform for decentralized storage, where participation of third parties will not affect the quality of the service. Its collateralized nodes, with gains up to 30%, will open up the industry for new participants that want to reap the benefits of tokenomics, while avoiding the hassle of running code or the technicalities of node hardware.
The demand for cloud-based services has grown all over, though the biggest players follow the older model of large data centers. Blockchain and decentralized storage was an idea that was first proposed in 2017, as most projects performed their ICOs. Over the years, building a network proved rather difficult, and it took years for Filecoin to finally launch its mainnet.
Some projects struggle to recruit both users and node operators, due to technical difficulties and no real value offered. Collateralized nodes is one solution to the incentive problem, also avoiding the inevitable coin dump through proof-of-burn. Decentralized storage has the advantage of being one of the clearest use cases of blockchain technology. The technology is viewed as one of the indispensable elements of Web 3.0, the attempt to build a new service framework to compete with accepted Internet protocols.
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