How Siacoin (SC) Works & Understanding Blockchain Based Cloud Storage System

With the recent success in Bitcoin, the world of cryptocurrency has undergone tremendous growth. This is because most developers are trying to develop a crypto coin that can compete with Bitcoin. The new cryptos or altcoins, tried to perfect the limitations in Bitcoin. Most of the altcoins have succeeded in making impressive improvements hence changing the crypto world as we know it. One of these altcoins includes Siacoin (SC).

Since the competition in the crypto world is quite stiff, each new coin tries to introduce a new concept that will help them reach to the top. Siacoin is a decentralized platform that offers clouds storage option to its users who can now store proofs, accept encrypted messages using the platform, host and also authenticate transactions that go through the platform.

In this article, we are going to discuss Siacoin in detail, its history; founders and any other relevant information that will help you have a better understanding of this coin.

History of Siacoin Cryptocurrency

This crypto coin was developed by David Vorick and Luke Champine. The platform is also backed by Nebulous Team which contains 5 well trained individuals:

David Vorick – currently the CEO of the Nebulous Inc. He is a graduate of Rensselaer Polytechnic Institution. Since he had a degree in computer science, he spent most of his time as a software developer before rising to the ranks in the Nebulous.

Luke Campine – Luke was a student at Rensselaer before dropping out to join Siacoin and work full time. He is the core developer and is also in love with programming.

Other members of the team include:

  • Zach Herbert
  • Johnathan Howell
  • Todd Miltenberger

The Siacoin platform was first officially released on June, 2015 and was conceived by HackMIT. The coin started trading at $0.000046 per Siacoin. The basic concept of this cryptocurrency is that you can rent out extra space on your PC on the Siacoin network and get paid in Siacoin. Also, anyone who needs the extra space can buy it through the Siacoin platform.

Understanding Siacoin

As discussed earlier, Siacoin is a storage platform like Amazon Cloud, Dropbox and Google drive. The biggest difference between Siacoin and other cloud based platforms is that it is open source decentralized blockchain cloud storage. This means that Siacoin is a platform that stores data in the blockchain system.

Most centralized platforms are prone to single point failures as well as misuse of some of the un-encrypted data in the aim of business profits. Through this platform, the system uses protocols to unite the unused storage spaces and makes them decentralized and un-encrypted cloud storage. Therefore, the system eradicates the need of using centralized systems that are not 100% safe.

The currency in this platform is used to execute file storage contracts that are potential storage spaces in the system. Each provider has to host the files for an agreed time and the agreed upon space. Afterwards, the payments are made at the end of the agreement in Siacoin.

The supply mechanism in this platform started with the developers mining the first hundred blocks. The developers were given about 300,000 Siacoin crypto. After every 100 blocks, the rewards reduce by one unit of Siacoin, that is;

  • First 100 blocks are equal to 300,000 Siacoin
  • Second 100 blocks= 299,999 Siacoin and so on.

Ecosystem Storage

This platform has both clients (users) and providers (hosts). The platform provides users the chance to commission space from the hosts and they are compensated with SC coins. The providers are given the chance to set their own prices, market their own reliability and also put in place standard penalties in case of any malfunction in the storage space and if the information is lost.

Moreover, the providers have the opportunity to deny the users space if they are not comfortable with the data of the clients for example, sensitive data, and illegal information among others. The clients on the other hand have a number of safety measures and protection protocols put in place for their own interest. For instance, they are given the option to sub divide the data so that it can be stored in different providers to enhance retrievability and security.

For example, if a host were to refuse to release the data, the client can retrieve the information from another provider. Both the parties involved can agree in the penalties in case the provider refuses to release the information or refuses to show the proof of storage. Each client has the chance to give incentives on top of the agreed upon storage fees. This is usually because the host has enhanced upkeep, faster uploads of the documents among others that makes the users pleased with the work done.

POS (Proof of Storage)

The platform uses these protocols to prevent any malicious providers and fraudulent or other misconduct that affect the clients. For the provider to start working in the platform, he/she has to provide a certain amount of proof that will be used to authenticate their reliability and honesty as per the terms and condition of this platform.
If the service provider is not able to submit his or her proof of storage within a stipulated time frame, the payments of the work done are sent to a different address. Additionally, the provider may be penalized further for negligence.

Benefits of Siacoin

Security – all data found within this platform is encrypted and move through a decentralized platform. This keeps the user’s information secure from problems that may be associated with centralized platforms. The idea of splitting information in this platform also provides a more reliable and secure network that is not vulnerable to single point attacks.

Affordability – Through this platform, users are provided with market driven flexible prices hence the users have a variety of options and prices to choose from.

Privacy – all data in the platform is encrypted. The data’s private key is only given to the users and hence the provider cannot access the information unless he or she has the private key. This means you are in complete ownership of all the data you share through the platform.

In conclusion, Siacoin is an upcoming crypto coin that has the potential for great things in future. The fact that the platform actually as something to offer to the general public; makes it even more attractive to cryptocurrency enthusiasts.

Noor Najam

Contributes guest posts to BlockPublisher with industry analysis & news in the blockchain space. Email: editor.opinions@blockpublisher.com

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