Research on Decentralized File Storage and Sharing on the Blockchain by@Covalent_HQ

Research on Decentralized File Storage and Sharing on the Blockchain

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How Blockchain based platforms such as Filecoin, Siacoin, Maidsafe, Storj, and Bluzelle are disrupting the file storage space.

In this post, we’re going to deep dive into why the decentralized file sharing and storage space matters. We’re then going to define what makes up the sector, what the end-users and markets care about, how is decentralization addressing these market needs, what is disruptive about the decentralization thesis, market sizing, and sector ranking, and an analysis of the top players on the Blockchain.

Cloud file storage platforms are transformative because instead of using a local computer storage to store files and photos which at times could take up a gigabyte of space, you use third-party sellers from Dropbox, Box, Google Drive, and Microsoft One Drive. The Cloud Storage Market is estimated to grow to $74 billion by 2021 and it’s a massive space.

What defines the decentralized file storage and sharing space?

We define the space with two key attributes. First is the peer-to-peer nature of the service. The fact that you can rent your unused storage on a decentralized platform to offset your cost is groundbreaking. Peer-to-peer is one of the major pillars for the decentralized space. This attribute allows for increased download and upload speeds because every file being downloaded is from a number of hosts across the network. Peer-to-peer has this interesting attribute where the storage costs decrease as the number of peers in the network increases.

The second key attribute is the use of data encryption. Centralized platforms offer limited data encryption which can often lead to security breaches. The key point here is that your private key used to encrypt your data is held with decentralized storage provider. Encryption plays a huge role in the excellent security and privacy that decentralized platforms have.


Data files are fully encrypted and broken into shards before storing across different hosts on the network. Only the user who is uploading the data has access to it using their private encryption key. This is unparalleled data security that centralized platforms can never match.

What end-users and the market care about?

At Covalent, we have assessed the storage platforms according to the five critical capabilities. Decentralized storage platforms are in the nascent stage and are often not targeting enterprise use cases yet.

The first need is data security. End-users care that no one except themselves have access to their files.

The second need is system speed. The service needs to offer fast upload and download speeds.

The third is consumers are very conscious about pricing. As more and more data is being stored, end-users care deeply about costs.

The fourth key requirement is data privacy. It’s important to make the distinction between data security and data privacy.

Imagine a window. There are two scenarios. First you could have metal bars that prevent objects from entering the window. That’s security, people can still look through the window and offers no privacy. Secondly, you can drape the blinds across the window that offers privacy, but no security because you can always throw something in. Therefore the combination of drapes plus metal bars offers the best privacy and security. End-users definitely care about privacy.

The final point is integration. End-users care that their storage provider integrates with your existing platforms like Slack and Autodesk.

What do you think about blockchain based decentralized file storage system?

Let us know your thoughts in comments.

We publish data-backed research reports on a variety of different sectors like decentralized cloud computing, file storage, sports betting and gambling, currency exchanges, e-commerce, privacy and security and decentralized social media.

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