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Author Topic: Why Decentralizing File Storage Matters  (Read 48 times)
Dogetoshi
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May 09, 2018, 06:28:33 PM
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The decentralized file storage sector is part of the Rad 30 Crypto Composite, which tracks 30 crypto assets across 10 different sectors similar to how the S&P 500 and the NASDAQ Composite track stocks. These 10 sectors, we argue, are particularly prone to decentralization.


https://medium.com/crypto-oracle/why-decentralizing-file-storage-matters-dc77f5a6a3cc

Cloud file storage (file storage) has been the talk of the town in recent years — and it’s not just because Dropbox is “unleash[ing] the world’s creative energy.”

File storage is a large market, reaching $31b in 2017 and expected to grow at a 24% CAGR through 2022, reaching $89b. Dropbox (Ticker: DBX) raised a total of $1.7b in venture financing and then an additional $756m through its IPO. Box (Ticker: BOX) raised $559m in venture financing and $175m through its IPO. These market sizes and dollars should have any heads turning.

Unsurprisingly, the decentralized file equivalents has attracted a substantial amount of capital. We’ve identified 13 decentralized file storage platforms that have raised a total of $325m. The 6 traded platforms have an aggregate market cap of $1.5b (as of yesterday May Cool.

Decentralized file storage is crucial for decentralized applications (dApps). Decentralized file storage adds to the infrastructural backbone for dApps. These services enable dApps to store files outside of a blockchain but also in a decentralized manner. If dApps were to use centralized file storage services, then they subject themselves to the same censorship and central-point-of-failures issues that most centralized services have.

Moreover, decentralized file storage services have the potential to offer a cheaper and more secure option than centralized services, potentially posing a threat to legacy infrastructure platforms like Amazon’s S3 or Dropbox.

The rise of decentralized networks has enticed entrepreneurs to build the next wave of file storage platforms. One that can’t be hacked, one that is uncensorable, and one that will have continuous uptime. But, can these platforms work out? We explore below…


“Cloud services cut both ways in terms of security: you get off-site backup and disaster recovery, but you entrust your secrets to somebody else’s hands. Doing the latter increases your exposure to government surveillance and the potential for deliberate or inadvertent breaches of your confidential files.” — Barton Gellman, Former Time Journalist

To even begin to understand the benefits of decentralization, one most first understand issues of centralized file storage providers.

- Central Points of Failure: All it takes is one centralized platform to fail, to witness the detrimental effects. In 2014, a bug in the iCloud software enabled hackers to get access to immensely private and intimate videos and pictures of celebrities. In 2017, a typo led to Amazon’s S3 file storage system to go down for close to five hours. This outage impacted many businesses that relied on S3 to host their files and data. Subsequently, users were unable to access Slack, GitHub, Expedia, and a slew of other platform. Using centralized platforms means that users have to trust them to be reliable and protect their assets. Those that live by the platform will ultimately die by the platform.
- Censorship: Centralized platforms have the ability to both onboard and offload users to and from its services. This ability enables platforms to censor users, as seen in the case of Amazon and the Chinese government. In 2017, bowing to the pressure from the Chinese government, Amazon told its local Chinese customers that those using software that circumvents the country’s system of internet blocks will have their websites shut down and access to AWS revoked. This prevention effectively censored customers from accessing important services necessary for running their businesses.
- Oligopolistic: The file storage market, while currently competitive (in terms of pricing), has shown oligopolistic features. In the fourth quarter of 2017, just three companies (Amazon, Google, and Microsoft) controlled 94% of the cloud service market share.
How does decentralization help?

“When decentralized blockchain protocols start displacing the centralized web services that dominate the current Internet, we’ll start to see real internet-based sovereignty. The future Internet will be decentralized.” — Olaf Carlson-Wee, Crypto Fund Manager

With the problems facing centralized file storage providers, how do decentralized services solve them?

- Central Points of Failure → Distributed Networks: Instead of having a small number of server farms storing data and files, decentralized file storage platforms have no single points of failure. Files uploaded onto Storj are digitally shredded into smaller pieces and stored across a network of servers contributed by multiple independent parties. Even if one of these parties is attacked and shut down, the file uploader will still have access to their files as it is distributed across multiple servers.
- Censorship → Uncensorable: Open decentralized platforms are by their very nature uncensorable. Users and the content they upload cannot be censored on these platforms. No single entity can prevent a user from uploading files they disagree with or are “illegal”. Moreover, because no single entity can dictate platform access, decentralized platforms cannot be pressured by government actors or corporations from censoring individuals.
- Oligopolistic → Competitive Marketplace: Instead of having a few businesses controlling file storage services, decentralized platforms, in theory, will have multiple service providers. In fact, Sia has close to 900 providers that are storing files for users. This prevents price collusion and encourages fair and competitive pricing. Compared to Amazon S3 which charges between $20-$30/TB/month for file storage, Sia’s prices its storage service at ~$2/TB/month.

Why do we care about decentralizing file storage?


When we first started the Rad 30 Crypto Composite (RAD 30), we examined numerous different industries that were ripe for decentralization. File storage is a sector that shows clear signals that decentralization is approaching.

Since the start of Q2 2018, the file storage sector is up 86.4% and the RAD 30 is up 86.8%. Over the same period BTC and ETH are up 32.4% and 89.9% respectively. The RAD 30 is a gauge for the overall crypto market and helps any informed member of the economy understand which sectors have the greatest potential of decentralization.
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May 09, 2018, 06:33:58 PM
 #2

Iagon, SIA, Storj, Filecoin, Golem ect ect

So many projects are based on this idea of decentralized file storage, I myself struggle to see why an average user (someone like my mother) would want to use a decentralized service rather than dropbox to store compilation of vacation pictures and videos (or whatever she stores).

But I'm no data scientist or cloud computing expert ya know? So my perspective is probably very biased and misinformed, ultimately I can't envision that SO MANY smart people and entrepreneurs would be dabbling with this business model if it doesn't have huge potential to impact current systems.

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May 09, 2018, 06:51:39 PM
 #3

Iagon, SIA, Storj, Filecoin, Golem ect ect

So many projects are based on this idea of decentralized file storage, I myself struggle to see why an average user (someone like my mother) would want to use a decentralized service rather than dropbox to store compilation of vacation pictures and videos (or whatever she stores).

But I'm no data scientist or cloud computing expert ya know? So my perspective is probably very biased and misinformed, ultimately I can't envision that SO MANY smart people and entrepreneurs would be dabbling with this business model if it doesn't have huge potential to impact current systems.

The "regular" people don't even care, a good amount of  people know they are giving away their privacy by using google, facebook, instagram, twitter etc. And they still don't care.
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May 09, 2018, 07:12:20 PM
 #4

Nope. Don't get it. Never will. It's one of the prime solutions in search of a problem that will never be.

I would never store on the cloud anyway in no matter what form it takes. I don't trust it and often don't have any access to data or wifi. If I need a file I store it myself in multiple places offline. Deeply controversial but there you go.

There's also this new thing out called Bittorrent that already exists and could go places.

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May 09, 2018, 07:26:48 PM
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May 10, 2018, 03:41:01 AM
 #6

Nope. Don't get it. Never will. It's one of the prime solutions in search of a problem that will never be.

I would never store on the cloud anyway in no matter what form it takes. I don't trust it and often don't have any access to data or wifi. If I need a file I store it myself in multiple places offline. Deeply controversial but there you go.

There's also this new thing out called Bittorrent that already exists and could go places.

Exactly what you just said.

For consumer storage, nah... just silly.

For enterprise storage, yeah... just silly.

Storage doesn't need a blockchain. Some serious innovation on top is required first. Not sure what that is though. I just can't see it right now.

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May 10, 2018, 05:16:13 AM
 #7

Moreover, decentralized file storage services have the potential to offer a cheaper and more secure option than centralized services, potentially posing a threat to legacy infrastructure platforms like Amazon’s S3 or Dropbox.

The biggest obstacle to competing with amazon could be the massive amount of state subsidies it receives in the form of state level tax cuts and taxpayer revenues funneled into covering construction of facilities and assorted costs of running data centers / server farms. I can't comment on whether or not dropbox receives similar state benefits but amazon and google definitely do receive some types of what might be labeled: "rich peoples welfare". That could make it difficult for smaller startups to compete, not only with larger corporations like google and amazon being able to purchase components in bulk for lower wholesale prices and likely having more flexibility in selecting which region or state they operate out of to negotiate better industrial electrical prices, but also state sponsorship on top of that. All of which puts smaller start ups at an even larger disadvantage.

The evolution of file storage from a centralized paradigm to a more decentralized one as you describe it is interesting. I wouldn't claim to know what the overhead storage requirements of blockchain are or how much bandwidth throughput is limited by utilizing a decentralized blockchain storage algorithm. But I definitely look forward to more work being done on this.

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May 11, 2018, 05:49:16 PM
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Nope. Don't get it. Never will. It's one of the prime solutions in search of a problem that will never be.

I would never store on the cloud anyway in no matter what form it takes. I don't trust it and often don't have any access to data or wifi. If I need a file I store it myself in multiple places offline. Deeply controversial but there you go.

There's also this new thing out called Bittorrent that already exists and could go places.

Exactly what you just said.

For consumer storage, nah... just silly.

For enterprise storage, yeah... just silly.

Storage doesn't need a blockchain. Some serious innovation on top is required first. Not sure what that is though. I just can't see it right now.

From what I can tell, blockchain storage like SIA is significantly cheaper than services like Amazon.  I would agree that this is not for the consumer market, however, I would not be surprised if things really started happening on the enterprise level.    Why would this be "silly"?   
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May 11, 2018, 06:39:41 PM
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... I myself struggle to see why an average user (someone like my mother) would want to use a decentralized service rather than dropbox to store compilation of vacation pictures and videos (or whatever she stores).
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"640K ought to be enough for anybody.” – Remark attributed to Bill Gates, 1981

Your inability to imagine how a technology could become important is a bad reason to believe that it won't.

And just to be fair, I originally did not believe PC's would become popular. Who would pay thousands of dollars to store recipes and manage their checkbook? I was completely wrong and I'll never do that again.

The key is to imagine how it might be used and estimate a potential value from that.

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May 12, 2018, 02:43:27 AM
 #10

I would never store on the cloud anyway in no matter what form it takes. I don't trust it and often don't have any access to data or wifi. If I need a file I store it myself in multiple places offline. Deeply controversial but there you go.

There's also this new thing out called Bittorrent that already exists and could go places.
The idea of decentralized money to loosen control of banks and financial institutions was naturly born with bitcoin.

The idea for these decentralized apps does seem a little forced but still has it's merits. Decentralized file storage is supposed to hell these dapps run in a censorship resistance environment.

The problme is that the implementation of these lofty ideas has been pretty vague till now. I don't see Ethereum network becoming the global computer or something yet. Still, it is not like there is no vector along which this can grow. For the optimists, or if one is peddling an ICO, anything is possible.. Cheesy

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