Siacoin project purpose and description
What is Siacoin?
Siacoin (abbrev Sia) is a decentralized platform that uses blockchain technology to help secure and store data safely. It is also a cryptocurrency designed to facilitate payment for data storage in the Sia platform.
The system was created by Vorick David and Luke Champine of Nebulous Inc who wanted to disrupt the data storage market. They conceived the idea in 2013 at HackMIT by making a proposition that with the right platform, any person on the globe could lend unused drive space for a pay.
Siacoin employs file contracts to facilitate operation and payment between hosts (nodes with drive space to lend) and users (clients).
It provides a new way of looking at data-centers so that all people can become part of a huge global ecosystem where data can be stored in a decentralized manner with no risk of loss, abuse, or unauthorized access.
What is the problem that Siacoin Solves?
For more than three decades, the problem of big data has grown from bad to worse.
In a standard setting, companies, organizations, institutions, research firms, and government departments generate huge volumes of data every day, monthly and annually.
Capturing this data, storing, analyzing, searching, and sharing it is a great problem. Think of a person who wants a health-related file about his treatment in 1995 from a government institution amidst progressively piling data. It can be herculean.
Managing this huge data to guarantee harmonic transfer, querying, and even updating is complex and near impossible in many cases. The advent of cloud services was seen as a reliable solution to the problem of big data. But the cloud services are in the hands of a few big corporations such as Google, Facebook, Microsoft, Apple, and Amazon. The centralized enterprises or data-centers comes with many problems;
- Storing data in the centralized data centers is very expensive.
- The profit from such services only goes to a few companies.
- The risk of attack and loss is very high.
- Data stored in some services such as Google Drive or Dropbox can easily be accessed by third parties because it is not encrypted.
How does Siacoin Solve the problem?
The primary goal of Siacoin is taking away the monolithic providers head on and handing the power to individuals.
This implies that anyone with some extra drive space in a computer can rent it out to others who need it for a pay. Then, the service is paid in Siacoin.
The Siacoin storage ecosystem
The Siacoin system should be seen to largely comprise of two main parties; the providers (hosts) and clients (users). The Siacoin file ecosystem allows users to rent space from hosts and pay for it based on a free-market driven model. The provider is allowed to set the price and conditions for use. However, these must go in line with the Siacoin contract system.
On their side, clients (users) also have a raft of measures created to protect their interests. For example, the data is split data into small bits and secured with multiple providers to enhance its security and retrievability.
Think of a situation where the provider refuses to release data, his computer gets damaged or even moves abroad. In such a case, it will still be possible to retrieve the data from other decentralized nodes.
The file contract system
For the host and user to work in cohesion, Siacoin uses a file contract that both parties have to agree on. The users agree to pay a specific amount of money (in Siacoin) to store data for a specific period. The host is also required to deposit some money on the Siacoin system at the beginning of the contract as collateral. At the close of the contract, the host is paid the collateral and the fee that the user paid.
The proof of storage
It is prudent to note that even with this contract system, Siacoin system does not trust hosts. If the host is paid in advance, he might opt to run away with user data. For others, their systems can get damaged and, ultimately making it impossible for the user to retrieve it.
Therefore, the Siacoin system only pays the host their collateral and fee from the client after presenting proof of storage.
This is a demonstration that you actually stored the data and made it available to the user in line with the file contract. Once the proof of storage is provided, both the collateral and the fee you charged the user are paid to your wallet in Siacoin.
What makes Siacoin better than it’s competitors?
From the moment that Siacoin was conceived, the founders were ready to take on some of the heaviest tech giants in the industry. But the approach taken by Siacoin starts by demonstrating the huge problem of big data and crafts a workable long-term strategy. Here are the main reasons why Siacoin is better than its competitors.
- Siacoin provides a cheaper and reliable way of storing data across the globe. Because it is a completely decentralized storage platform, users are assured of getting their data cheaply and reliably.
Most centralized companies such as Amazon and Microsoft are very expensive especially for users with mild data storage needs. For example, storing 1 TB of data at Siacoin is about $2 while Amazon charges more than $40 for the same service every month.
- Siacoin guarantees users of utmost security. By adopting strict measures requiring the hosts to put forward collateral, users are assured of utmost greater protection.
Data is also split and stored in many nodes from the principle that none of them can be trusted. In centralized Datacenters, a single point of failure can compromise a lot of clients’ data.
- As a digital currency, joining the Siacoin network to rent or host users’ data implies there is a huge opportunity for growth. As one of the high potential cryptocurrencies in the market, holding Siacoin can generate huge returns when the price takes an upward shift.
- Because Siacoin is an open source project, a lot of developers are always working on new ways of improving the network. This is why it gained a lot of following within a few years of establishment. After a successful debut on the files storage system and achieving great success, other projects that are already generating huge interest include file sharing, file recovery, and streaming services features.
How can Siacoin be categorized?
Siacoin is a truly decentralized platform ushering in a revolution in the data storage niche.
While the industry has been so lucrative, every effort made by the monolithic giants is aimed at funneling more profits to their accounts. But the blockchain technology is here and offering a reliable and affordable alternative. By creating a platform that every person can join and participate in data storage, Siacoin has already set in motion a revolution.
- A lot of people who have some unused space in their computers will want to make some extra funds. This is as simple as joining the Siacoin network and following the procedure for renting unused hard drive.
- For those with some cash to invest, setting up a sizeable storage center can become a money spinner. For example, planning to rent about 500 TB can add about 1000 USD or more every month.
- Even as you seek to become a host or user in the Siacoin network, the decentralized network provides users with additional opportunity of earning from the network. You can act as a miner. Because Siacoin uses Proof of Work (PoW) algorithm, you can get a computer to mine the network and simultaneously rent the storage space to users.
Siacoin’s and Security?
The biggest issue for entities dealing with data is keeping it safe. As a data storage platform and cryptocurrency, it implies that the burden for security is more; protecting the client data and securing the network. Here are the main methods used to guarantee Siacoin users of utmost security.
Siacoin goes beyond Reed Solomon coding model to address redundancy
When users come to the Siacoin platform, they expect that their information and data will be secure. Siacoin delivers this by breaking the information into several pieces and storing it in different computers. In an ordinary Reed Solomon coding model when M-of-N can be referred to recover information, the redundancy is only N/M.
Instead of Siacoin going for 1-of-3, it opts for 10-of-30 nodes to achieve the same redundancy of 3X. The chances of 21 drives of the selected 30 failing are far lower compared to simply sticking to the basics of 3 out of 3. This guarantees users that their data is safe and retrievable when they want it.
All data is encrypted and only the user has the decryption key
All clients’ data is encrypted before getting stored in the host’s drive. This implies that no one can know the details of the stored file. Even in the event that the files are accessed by a third party, it will be impossible to access them without the decryption key. Only the user has the key. The user accounts and their personal information is also encrypted such that even the miners who confirm transactions can only follow back to know the balance in the accounts.
Siacoin development team is always on the lookout for gaps
Because of the stiff competition in the industry, the Siacoin development team is always on the lookout for gaps and bugs targeted at its system. The team also follows the developments in other networks to protect users from emerging risks.
As the Siacoin development team works tirelessly to keep the data and users safer, it is important that the nodes also do their part. Whether you are a host, user, investor, or miner in the Siacoin system, the following five points are very important.
- Ensure that your computer and system are protected by good anti-malware software.
- Make sure to avoid visiting risky sites that can give attackers easy access to your Siacoin account.
- The private keys and the recovery seed phrase should be stored safely and away from the main computers. Also, they should never be shared with third parties.
- If you opt to trade Siacoin in the markets, it is important to know that they are the easiest target for hackers. Therefore, make sure to use the exchanges that have good security features and move the SC to a cold storage when not trading them.
- Always triple check the public address of the person you are paying in Siacoin to avoid sending to the wrong address because it implies permanent loss.
Examples of Siacoin’s use cases / applications.
Though Vorick David and Luke Champine had a very clear goal of how they wanted Siacoin to be used, its applications have increased over time. Here are the main Siacoin applications.
- People with extra drive space in their computers can rent it to those who want it for a fee. Some investors are even focusing on acquiring larger drive space and lending it to Siacoin users for extra pay.
- Users who have a lot of data to store but do not want to maintain their own systems can reach Siacoin to rent space. Since the storage cost is lower compared to top data providers, Siacoin is a great option for heavy data users especially those working on projects for short time-frames that do not warrant installing own storage systems.
- Siacoin is one of the high potential cryptocurrencies in the market. This has made it a great investment option. You can opt to trade Siacoin in the market or hold the coins waiting for the price to grow. Note that such holding is based on speculation.
- You can use Siacoin to pay for products and services in the stores that accept it. This could be e-commerce stores or conventional markets.
- As a cryptocurrency listed in most markets, you can opt to use it to pay for transaction fees. This is especially useful when operating as cryptocurrency only exchanges.