Will Decentralized Storage Challenge Mainstream Solutions?

Centralized storage systems have been around for a long time and are the de facto option for both consumers and business applications.

With the evolution of cryptocurrency, web3, and the risks associated with centralized storage such as cost monopolization, security concerns, censorship, and privacy, decentralized storage options have been sought after.

The evolution of decentralized storage has given consumers and businesses ownership of their data while also lowering security concerns and privacy risks. Although decentralized storages provide solutions to possible risks associated with centralized storages, an important question here is "Are decentralized storages ready to take on Centralized Storages?"

In this article, we will cover centralized storage, decentralized storage, the potential risks of centralized storage, what is preventing large enterprises from migrating from centralized to decentralized storage, and an analysis of the available technologies and decentralized platforms.

What is Centralized Storage?

Centralized storage is a data storage model where information is stored in a single, central location, typically on a server or group of servers. Devices such as computers and mobile phones that are connected to this central server are granted permission to access, modify, and update the data. This approach provides a significant advantage in terms of data control, making it easier to manage data effectively for applications. Additionally, centralized storage systems are highly advantageous in terms of backup and recovery processes due to their simplicity and efficiency.

Current problems with centralized storage

The data that is generated by companies is huge: consisting of customer records, transactions, and audio, and video files are some of the types, and storing these records is very important for these companies. Most companies heavily depend on centralized systems to store their data which can be databases, data warehouses, and data lakes. Some notable organizations like Amazon, Microsoft Azure, and Google Cloud Platform provide these storage services storing the data in a centralized server. The current problems that companies are facing with centralized storage are detailed below.

1. Security

   The data that is stored in a centralized location is prone to data breaches as well as security breaches. These security incidents can cause huge financial losses, loss of reputation, and lawsuits against companies. If data is kept in one data center and it is compromised, then it affects business uptime and a data breach can cause even more damage to the company.

   
   

2. Cost

   Centralized storage systems are very expensive to set up, configure and maintain when the amount of data that needs to be stored is extremely high.

3. Scalability

   When the volume of the data that needs to be stored increases it gets really difficult to scale the storage systems to handle the huge amount of data.

4. Data Integration

   The data is generated, collected, and migrated through multiple sources and the integration of the incoming data can be challenging to maintain data quality and consistency.

5. Performance

   If the number of users who are accessing the centralized data storage increases, making several requests like retrievals, updates, and deletes makes the performance weaker. Due to the reduced performance, there can be lots of delays and downtimes which impact productivity.

6. Single point of failure

   As all the data is stored in one central location, it is very susceptible to server downtimes and performance issues which makes the data to be unavailable which in turn causes significant problems for the enterprises which use data for operations. Hence the need for a multi-cloud solution.

   
   

7. Security risks

   Centralized storage systems are vulnerable to security breaches and prone to hacks. If any unauthorized individual gets access to the data and potentially gains access to all the data that is stored.

8. Limited access

   Centralized storage systems are capable of limiting the users who can be able to access the data. This might cause problems for businesses that might need to share the data with remote employees or others in the organization.

   
   

What is Decentralized Storage?

Decentralized storage refers to a data storage system based on blockchain technology in which the data is stored on a network of computers, rather than on a single centralized server or data center. The network can be composed of many different computers, often owned by different individuals or organizations, and each computer participating in the network can store a copy or a fragment of the data. The use of blockchain technology in decentralized storage provides security for the data and makes it almost impossible for hackers to tamper with the data since the data is stored on a network of computers and their hash is recorded on the blockchain, and so any changes would affect the hash.

Decentralized storage systems have several advantages over conventional centralized storage systems mainly due to their resistance to censorship and data loss. Storage is more cost-effective than centralized storage because the storage is provided by the computers that are distributed in the network and incentivized by the network instead of having the client be the primary source of payment. This is similar to Bitcoin where miners lower their “banking” fees because they get compensated by the network for their consensus work.

What is the benefit to companies and users?

1. Enhanced Security

   Decentralized storage networks use cryptography and other hash functions as security measures to monitor the state of the data, where the data can be broken into fragments and stored in different servers across the network making it harder for anyone unauthorized to access it.

   
   

2. Enhanced Performance

   Since the data is distributed across the nodes which are the computers on the network instead of being stored in a centralized location it is less likely to have outages, downtimes, and other disruptions, hence providing high business uptime.

   
   

3. Cost-Effective

   Decentralized storage is more cost-efficient than centralized storage systems because of network incentives provided to the storage provider. In some protocols, erasure code is used to distribute the data, instead of replication, and is a more cost-effective architecture.

4. Data Privacy

   The storage system offers enhanced control over the data of individuals or organizations, ensuring protection against data leaks or tampering. By fragmenting the data and storing it on multiple servers, the system provides redundancy, such that even if one computer is compromised, data replicas or fragments are available on other systems. Furthermore, the compromised data may be encrypted, making it practically inaccessible, thereby guaranteeing excellent data privacy.

   
   

   Decentralized storage gives users greater privacy and control over their data compared to centralized storage, where users have to rely on a third-party provider to secure their data. By storing data on their own devices or a network of trusted nodes, users have more authority over who can access their information. Decentralized storage also offers faster access times and better accessibility since data is spread across several nodes, enabling retrieval from the nearest node to the user, reducing latency, and improving overall access speed.

   
   

What is stopping companies from using Decentralized storage?

There are various reasons why companies are not using decentralized storage. Some of the reasons include:

1. The companies lack familiarity as the decentralized storage systems are relatively new in the market and the companies have had their existing data stored in a centralized system for a long time. The adoption of decentralized storage is challenging for companies to integrate into the existing architecture.

2. The speed of retrieval of the data is considered to be slow when compared to centralized storage as the data is stored across different nodes in the network which doesn’t help companies to perform day-to-day activities with the data. The speed is as good or better than traditional cloud from a few decentralized options such as Sia, Storj, and Züs.

3. As decentralized storage systems are quite new in the market and there is no set of widely accepted standards which makes it harder for companies to compare and evaluate various options.

   
   

4. The learning curve for the decentralized storage system is really high and requires specialized knowledge and expertise for setting up the architecture and even for managing it and this can be a hurdle for companies that don't have enough resources and expertise to maintain the decentralized storage systems. There is one decentralized option that makes this easy with a no-code app for a S3 compatible server (see Züs below).

   
   

Is migration to decentralized storage possible?

Yes, companies can migrate from centralized to decentralized data storage, but as we all know, migrating large amounts of data from one technology to another is a costly process, and there are some other risks involved for companies to migrate completely to a new technology.

Scalability can be an issue even though decentralized systems offer scalability but the process is quite complex as the need for synchronization and coordination between the multiple nodes is required in the decentralized storage and also it is hard to manage or predict the capacity requirements in the decentralized system.

Even though the performance of the decentralized storage system is quite good, there might be some performance issues while storing large volumes of data and the need for frequent retrievals. This happens because the network synchronization between the nodes introduces some unwanted latencies and slows down the access times. However newer decentralized platforms such as Sia, Storj, and Züs have overcome this limitation by using parallel data architecture and have as good or better performance than traditional cloud.

Blimp (a Züs migration app) provides S3 migration services for users to seamlessly migrate in a few minutes. This could help enterprises seeking to lower cost, especially for reads, and have a higher performance and security solutions than AWS S3. So users can still run their apps in the cloud but pipe the data to Züs for a cost efficient and secure data architecture.

Drawbacks of decentralized storage

Some of the drawbacks of decentralized storage are:

1. Lack of control: Decentralized storage systems might be owned and managed by different kinds of companies or individuals or organizations, which can result in a lack of control over the data which in turn makes it difficult to enforce any policies, compliances, and regulations. But this is solved by the some platforms that manage the storage for companies such as Blimp which provides a multi-cloud S3 with complete control over the configuration of their allocation and the ability to add or change storage providers on the fly.

   
   

2. Limited availability: As the data is split into multiple files and stored across many nodes on the network in different locations, it might not always be readily available when needed which can be a problem for anyone who needs real-time access to their data. The availability was an issue with IPFS but the newer platforms do not have this problem, and in fact, some have better performance than even AWS.
   
   The availability problem is solved through token economics by both Züs and Filecoin, as it randomly monitors the performance of their providers over time. In the case of Züs, their QoS (Quality of Service) protocol takes it a step further where the providers need to submit a response within a limited time relative to the size of their file. Also for Züs, the user can switch providers at any time which forces the providers to be on their best behavior.

   
   

3. Data integrity issues: Decentralized storage systems might not have a central authority to ensure data integrity which can result in less accuracy, incompleteness of the data, and inconsistencies or errors in the data. However, the data integrity is checked during downloads and at rest when the blockchain protocols of Filecoin and Züs challenges the provider for a piece of data, which if not responded appropriately would result in an economic loss.

   
   

Uses of Centralized and Decentralized Storages

Some of the uses of centralized storage are:

1. Backup and disaster recovery: Centralized storage systems offer backup storage for critical files and data and these also provide excellent disaster recovery solutions for data losses or corrupted data.

   
   

2. Collaborative work: The data can be accessed by multiple users and work on the same files and projects which makes it easier to collaborate due to the presence of a single source of truth that everyone can work on in real time having access to the data.

   
   

3. Regulatory compliance: It helps companies, enterprises, and organizations to comply with their own data privacy and security protocols ensuring sensitive data is stored more securely and in a controlled environment.

   
   

4. Build a data lake: With S3 users can run big data analytics, artificial intelligence to get data insights.

   
   

Some of the uses of decentralized storage are:

1. Data security: Decentralized storage systems offer additional security and privacy when compared to centralized storage as the files are split and distributed among different servers thereby reducing the risk of single-point failure or data breach.

   
   

2. Content distribution and Quality: It is possible to distribute content such as audio, video files, websites, and applications across the servers in the network which will greatly improve the performance and reduce latencies.

   
   

   Some providers such as Züs and Storj offer video streaming and Züs offers live streaming solutions which are on par with centralized applications but more resilient and performant. Züs offers display of content in its original quality on their apps Vult and Blimp.

3. Internet of Things (IoT): Decentralized storage can be used in IoT applications where the data generated by the IoT devices can be stored in a distributed manner without having to rely on centralized servers to store the data.

   
   

4. SaaS apps providing Private Data Sharing: Users have data ownership and in some cases can seamlessly share encrypted data with others easily such as for social, health, and business apps that have sensitive information that needs to be protected.

   
   

5. Private data lake: Users can run big data analytics, artificial intelligence to get data insights and provide them securely to third parties without being liable for breach and be inherently GDPR compliant.

Available Decentralized Storage Platforms

Filecoin

Filecoin is a decentralized storage platform that uses its protocol to store and retrieve data.

Users can provide free storage on their servers and get incentivized by storing the files to receive network rewards.

It uses a unique consensus mechanism called proof of replication and proof of space-time to verify that storage providers are storing the data they claim to be storing. The proof of space-time mechanism picks miners at random intervals of time to check the data storage and if the user cannot produce the proof of storage, they will be penalized. This is similar to Züs QoS protocol which uses the blockchain to challenge the provider randomly but Züs has the additional QoS component detailed below.

Filecoin has its own blockchain and rewards the storage providers with FIL tokens in return. It is widely known for its ability to handle large volumes of data providing low storage and retrieval costs. Filecoin is ideal for archival storage and can compete well against AWS Glacier as a higher security and lower cost alternative.

Sia

Sia is a decentralized cloud storage platform that provides secure and efficient data storage. The Sia network is powered by its native cryptocurrency called SiaCoin. It is used to incentivize the users who are providing their unused storage.

Sia network utilizes erasure coding to guarantee data durability and redundancy, ensuring that files are replicated multiple times to provide robust backup capabilities, even if some nodes go offline. In terms of pricing, Sia offers competitive rates for storage and retrieval. Files are split, encrypted, and stored across various nodes, and the data owner holds the private encryption keys necessary to access the stored files.

The storage configuration is set by the network and the user cannot select providers or the configuration of the data and parity shards. There are no space-time checks like in Filecoin or the Züs QoS protocol detailed below.

Storj

Storj is another decentralized data storage platform providing S3 compatibility object storage with better security and performance. With the help of S3 compatibility developers can build a variety of tools such as video streaming, build apps and software.

Storj offers a highly available, multi-region storage solution that utilizes a trustless architecture, default encryption, and edge-based access controls. This design enhances security and reduces the risk of data breaches since only individual users have the authority to grant permission to access files, thereby granting them complete ownership, control, and responsibility over their data.

Like Sia, the storage configuration is set by the network and the user cannot select providers or the configuration of the data and parity shards. There are no outsourced data verification checks like in Filecoin or the Züs QoS protocol mentioned below.

Arweave

Arweave is a blockchain cloud storage platform that supports the permanent storage of data. Unlike traditional blockchains which heavily rely on miners to verify and validate transactions, Arweave utilizes a unique consensus mechanism called proof of access to validate the data making sure the data is stored permanently.

Arweave enables users to store their data permanently on the network by paying a one-time fee to create a new block. This block is securely stored on the network and can be accessed by anyone with the appropriate decryption key. Additionally, Arweave utilizes Permaweb, a comprehensive ecosystem that supports a variety of decentralized full-stack web applications. With Arweave, users can prioritize privacy and avoid censorship or surveillance by storing their data indefinitely. Like Filecoin, the data is replicated several times but since the users are not paid for reads, the performance for such may not be good in practice.

Züs

Züs is a high-performance cloud on a fast blockchain offering privacy and configurable uptime. It competes with AWS S3 and has shown better performance on a test network due to its parallel data architecture. The data distribution is similar to Sia and Storj and uses erasure code to distribute the data between data and parity servers. However, unlike them, Züs storage is configurable to provide flexibility for IT managers to design for desired security and uptime.

For instance, the user can have 10 data and 5 parity providers and select where they are located globally, and later decide to add a provider on-the-fly to increase resilience, performance, or switch to a lower cost provider. Users can also add their own servers to the network to operate in a hybrid cloud architecture. Such flexibility allows the user to improve their regulatory, content distribution, and security requirements with a true multi-cloud architecture. Users can also construct a private cloud with all of their own servers rented across the globe. Even though there is no protection from an internal security breach, users will have a better content distribution, highly available  network, higher performance, and lower cost.

The QoS protocol is time-based where the blockchain challenges a provider on a file that the provider must respond within a certain time based on its size to pass. This forces the provider to have a good server and data center performance to earn rewards and income.

The privacy protocol from Züs is unique where a user can easily share their encrypted data with their business partners, friends, and family through a proxy key sharing protocol, where the key is given to the providers, and they re-encrypt it using the proxy key so that only the recipient can decrypt it with their private key.

A summary of the comparison of the five decentralized storage platforms are presented on the table below.

Comparison of the available decentralized storage platforms

Since these platforms are open source, it's important to monitor their GitHub activity to assess how well the project is being maintained. Of the platforms mentioned above, both Filecoin and Züs (0Chain) have substantial GitHub activity with a considerable number of developers actively contributing to the project.

When it comes to enterprise use, companies will typically prefer uptime, performance, and private data-sharing features for their storage as they look at AWS S3 alternatives when selecting a storage platform. Of all the platforms out there, Züs fits the bill and enterprises still can use Filecoin for archive storage instead of AWS Glacier.

So the preferred architecture for the next generation storage is for enterprises to use a combination of Züs and Filecoin to mimic the current setup of local storage, AWS S3 storage, and Glacier, typical for most enterprises.  Additionally, Züs has ecosystem apps to encourage traditional storage consumption such as Blimp, a S3 server and cloud migration platform, and Vult, a personal cloud app to store encrypted data and share privately with friends and family, and Chalk, a zero cost permanent storage.

Although Züs has not yet launched its mainnet, you can test the demo apps on their test network. These include the ones mentioned above and others such as Bolt, a wallet that is very secure with air-gapped 2FA split-key protocol to prevent hacks from compromising your digital assets,and  enables you to stake and earn from the storage providers. Others are Atlus, a blockchain explorer and Chiminey, which allows anyone to join the network and earn using their server or by just renting one, with no prior knowledge required.

For consumer storage, Sia, Storj, and Vult (on Züs) can be good options since they are architecturally lower cost because of the erasure code technology. But for enterprise storage, among the available platforms, there isn’t a direct competitor to AWS S3 except for Zus.

Blimp App by Züs

Vult App by Züs