It won’t be easy unseating the big cloud computing networks. But that won’t stop some startups from trying. At least four are already trying. Japan is adding another one to the mix, a newcomer called Module.
The reason companies are getting in: they see massive amounts of unused storage space being unused out there – like around 32 billion gigabytes to be exact — and the vision for the storage players is to create a market to rent that storage. That storage is not connected yet. But blockchain developers are making it happen. The notion: if you can connect and build a medium of exchange to store date files on someone else’s PC, server, tablet or smartphone, then you have a bonafide business there, one in which venture capital firms are willing to back.
The sum of all the individuals involved in a decentralized storage market builds a storage market bigger than the existing one led by behemoths like Dropbox and Google. Each individual contributes their space to the network and gets paid in a particular token. For some, it might be Filecoin, which raised over $250 million in an ICO last year. For others, it might be newcomer Module, which goes beyond Filecoin by allowing developers to create apps on their network, and issue coins themselves. Users can either hold onto the cryptocurrency issued by the startup, or exchange it for Bitcoin, Ether, or fiat. As the network grows, the idea is that the value of the coin of the issuing startup grows with it, be it Filecoin or Module.
Module is launching an initial coin offering this month. Filecoin is its biggest rival.
The cloud storage market is what they both seek to disrupt.
Currently, centralized cloud storage stores data in large, centralized silos owned and run by big tech companies like Microsoft. This architecture makes the web brittle due to hackers, undermines privacy, allows the price of storage to remain artificially high, and creates bottlenecks that prevent innovative new uses of data.
But building a successful cloud data storage business is complex and challenging. Even to begin to be competitive with incumbents a company would need to build a global network of data-centers in every continent, build out robust user interfaces that satisfy many user demands and hire customer support teams. These tremendous barriers to entry have resulted in just a few massive corporations owning nearly all of the global cloud data storage market.
Technological advances and blockchain developers are helping to decentralize the storage business, says Toshiki Tashiro, Module’s project manager.
The Peer-to-Peer Cloud Storage Network, which made client-side encryption possible, allows users to transmit and share data without having to rely on a third party’s storage space. So long, Google. Goodbye, Microsoft.
“The elimination of central control can alleviate problems such as traditional data errors and power cuts, while significantly increasing security, privacy and data control,” Tashiro says.
Earlier, the P2P network was not suited for building a storage system. Module’s blockchain purports to solve the inherent problems by implementing direct payment for storage. This will enable data authenticity to be checked on a regular basis, and compensation to be paid for the data stored in PEER.
A distributed storage network has advantages over a cloud-based server. Data security is maintained through client-side encryption, while the reliability of data is maintained through proof of decryption. It is also possible to significantly reduce the impact of server malfunctions and security violations, Module white paper authors wrote.
The introduction of more advanced devices, rather than just renting out storage on a smartphone, and the use of a constantly growing number of devices will allow companies in this space to reduce the cost of data storage.
Other than Filecoin and Module, the three biggest players are Storj, Sia, and MaidSafe.
Module is different in several ways, but one way is that it can be mined from lower powered devices – namely a smartphone. Anyone in the world could conceivably become a member of Module’s crypto economy, leading to a much more decentralized blockchain. Module users can create Dapps just like they can on the Ethereum platform.
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