With the increasing demand for better security and the need for storage space, a lot of work is being done in the field of storage providing platforms. The centralized web has a lot of storage providers, which also use third party storage providers. Even if they’re not using third party providers, they can access the information provided by the users themselves. Another problem with the centralized platforms is that if the server of the website is down or the website or application becomes inaccessible for a while, the data provided by the users becomes inaccessible for them. Adding to the list of problems, the platforms demand high fares for the access provision, like the apple iCloud etc.
A wave of blockchain startups have emerged to cater this problem. Sia has also muscled its way into the cream of these startups. Pretty ‘artistic’ name for a startup, isn’t it?
What is Sia?
Sia is a decentralized storage provider, which operates peer to peer as well as on an enterprise level. Sia uses blockchain to provide a new generation storage solution where the peers rent out storage spaces to each other, instead of a third party involvement. This new distributed storage based on smart contracts enhances security, speed and efficiency of the model significantly.
People list the centralized cloud services like Amazon S3 as the top storage providers. They provide cloud storage with prices at about $23 per terabyte per month, they also propose fast access. The people believe these stories because they have no point of reference as the monopolies are running. The incident of a server of Amazon S3 going offline last year backs this argument. A mistyped command caused the access of data to be restricted and millions lost access to their valuable data. This problem puts the use of a decentralized network for data storage on the top.
Using Sia, the host and clients are put into agreement contracts where the client agrees to store data on the storage provided by the host and the host promises to provide continuous storage for the given time period. If the host keeps providing proofs of continuous storage time to time, they are rewarded, and in case they fail to do so, they are penalized. Sia acknowledges the fact that a single host is an inefficient way to deal with storage, hence, to improve speed, accessibility and security, the fragments of a user’s file are spread on the network of hosts in encrypted forms. Not only does this provide better quality of service, as the peer to peer network improves speed, but security is also enhanced significantly. The security is also enhanced by cryptography and redundancy algorithms when the files are being stored. Moreover, the accessibility is highly increased as it is not dependent on a single host.
Transparency of the network is also ensured, each transaction that is carried out using the contracts system is verified by nodes of the scalable network.
Sia also gives a cheaper alternative to Amazon S3, whose storage cost is $23 per month for a terabyte storage, compared to Sia that provides the same in about $2 per month.
The ecosystem that Sia provides tops other storage providers on the point where they put trusted host selection in the game. Hosts can announce themselves on the networks using customized data patterns and templates that the clients can easily read. After detailed analysis, clients can choose to select the best trusted host using these announcements. This ecosystem based on trusted host to client service is indeed a step ahead.
Not only is this platform presenting one sided facilities (i.e. towards the clients), but they also give equal rights to the hosts in the contract. The providers are allowed to reject files that are illegal or unfavorable. The hosts are also given the liberty to advertize themselves as minimally reliable, in which case, the providers would be penalized minimally and the incentives would be small. If the provider advertizes himself as highly reliable, they enter themselves into an agreement where they are bound to provide proofs of continual storage provision periodically, because if they fail to do so, the penalty would be harsh.
Clients are also given privileges, in which they can use erasure codes to safeguard against hosts going offline. The detailed operation of these codes are explained in the whitepaper;
“These codes typically operate by splitting a file into n pieces, such that the file can be recovered from any subset of m unique pieces. (The values of n and m vary based on the specific erasure code and redundancy factor.) Each piece is then encrypted and stored across many hosts. This allows a client to attain high file availability even if the average network reliability is low. As an extreme example, if only 10 out of 100 pieces are needed to recover the file, then the client is actually relying on the 10 most reliable hosts, rather than the average reliability. Availability can be further improved by rehosting file pieces whose hosts have gone offline. Other metrics benefit from this strategy as well; the client can reduce latency by downloading from the closest 10 hosts, or increase download speed by downloading from the 10 fastest hosts. These downloads can be run in parallel to maximize available bandwidth.”
The algorithm allows a host to recover the files simply when 10 hosts are online, so they can choose the closest or the trusted hosts across the globe, which marks their service one of the best in the sense of availability, accessibility and speed.
The clients can trust the network as the private keys to the files are only with them, and without the key, no one can access their files, and for others, the files are just small pieces of encrypted data which they can’t access.
How does Sia operate?
To put everything in a chronological order and in perspective, the working of Sia is explained in steps as follows,
- Files are divided prior to upload
- Each file is encrypted
- Files are sent to hosts using smart contracts (Their collateral is collected, and the payments are made by the clients)
- Host submits storage proofs
- Contracts renew over time (A contract lasts for typically 90 days)
The startup has defined a set of goals they are set to achieve yearly. Based on the roadmap they ensure efficiency and practicality to be achieved by small practical, achievable steps.
Since the day the company was founded in 2014, it has seen enormous growth over the years. They released their Beta version in 2015, analyzed the feedback and improved enormously. These improvements led to the release of v1.0 in 2016. The rapid nature of growth and improvements gave Sia the room to grow in terms of speed, scalability, and stability.
The company’s website also elaborates the company’s goals in 2018, “Sia becomes production-ready for cold storage, begins to be used by companies, and introduces file sharing.”
In the next few years, they envision to approach and leave behind Amazon S3 speeds and move towards the provision of warm storage. The end goal being that everyone, individual and companies should shift to Sia, they envision to become the “storage layer of the Internet.”
Sia tokens and ICO
The trading currency for the platform is Siacoin. This coin can be used to pay the hosts for renting the storage space. Apart from that, this currency is also available for mining. The hosts submit Siacoins as collateral for smart contracts, in case they fail to meet the agreement points, their collateral is also taken away. This factor makes the storage even more reliable as the hosts are discouraged by the strong disincentive to go offline.
The SiaCoin is rated to be at 41 in the top cryptocurrencies, and has been performing well. It is standing at a market cap of $2 billion as of yet and shows potential of growth.
The coin even saw the highs of $3 billion in December 2017 according to their blog post.
Sia criticizes revenue and fund generation through ICOs. Instead, they have presented a model called Tokenized Security Offerings (TSO). Their unique model has two coins; Siacoin being the utility token and Siafunds is the revenue sharing tokenized security.
Their model has put forward a new dimension where they produce revenue only when users pay for storage, hence they are highly incentivized to take actions that encourage users to store data on Sia. According to their blog post,
Sia’s revenue sharing token model forces us to think long-term and put product development ahead of marketing.
What’s the easiest way to store their currency? They’ve provided a solution for that as well, as mentioned in their tweet,
Does Sia have an official wallet? We sure do. Learn more in this recently updated article: https://t.co/nbtxQaknGm
— Sia Tech (@SiaTechHQ) July 3, 2018
All in all, the revenue generation models presented by Sia seem quite promising as they are inclined towards provision of facilities rather than funds generation. The operation and facilities provided by Sia overall also show potential. The question that arises is that will Sia be able to create the monopoly they envision to create, with companies like Storj in competition? Let’s leave that question for time to answer.