Tag Archives: cryptocurrency

The young report card on Decentralized Storage

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I kept this blog in my queue for over 4 months. I was reluctant to publish it because I thought the outrageous frenzies of NFTs (non-fungible tokens), metaverses and web3 were convoluting the discussions on the decentralized storage topic. 3 weeks back, a Google Trends search for these 3 opaque terms over 90 days showed that the worldwide fads were waning. Here was the Google Trends output on April 2, 2022:

Google Trends on NFT, metaverse and web3

Decentralized storage intrigues me. I like to believe in its potential and I often try to talk to people to strengthen the narratives, and support its adoption where it fits. But often, the real objectives of decentralized storage are obfuscated by the polarized conversations about cryptocurrencies that are pegged to their offerings, NFTs (non-fungible tokens), DAOs (decentralized autonomous organizations) and plenty of hyperboles with bewildering facts as well.

But I continue to seek sustainable conversations about decentralized storage without the sway of the NFTs or the cryptos. After dipping in my toes and experiencing with HODLers, and looking at the return to sanity, I believe we can discuss decentralized storage with better clarity now. The context is to position decentralized storage to the mainstream, specifically to business organizations already immersed in centralized storage. Here is my fledgling report card on decentralized storage.

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HODLing Decentralized Storage is not zero sum

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I have been dipping my toes into decentralized storage. I wrote about “Crossing the Chasm” last month where most early technologies have to experience to move into the mainstream adoption. I believe the same undertaking is going on for decentralized storage and the undercurrents are beginning to feel like a tidal wave. However, the clarion calls and the narratives around decentralized storage are beginning to sound the same after several months on researching the subject.

Salient points of decentralized storage

I have summarized a bunch of these arguments for decentralized storage. They are:

  • Democratization of cloud storage services separate from the hyperscaling behemoths of Web2
  • Inherent data security with default encryption, immutability and blockchain-ed. (most decentralized storage are blockchain-based. A few are not)
  • Data privacy with the security key for data decryption and authentication with the data owner(s)
  • No centralized control of data storage services, prices, market transparency and sovereignty
  • Green with more efficient energy consumption compared to Bitcoin
  • Data durability with data sharding creating no single point of failure and maintaining continuous data access services with geo content dispersal

Rocket fuel – The cryptos

Most early adoptions of a new technology require some sort of bliztscaling momentum to break free from the gravity of the old one. The cryptocurrencies pegged to many decentralized storage platforms are the rocket fuel to power the conversations and the narratives of the decentralized storage today. I probably counted over a hundred of these types of cryptocurrencies, with more jumping into the bandwagon as the gravy train moves ahead.

The table below is part of a TechTarget Search Storage article “7 Decentralized Storage Networks compared“. I found this article most enlightening.

7 Decentralized Storage Compared

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The Currency to grow Decentralized Storage

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Unless you have been living under a rock in the past months, the fervent and loud, but vague debates of web3.0 have been causing quite a scene on the Internet. Those tiny murmurs a few months ago have turned into an avalanche of blares and booms, with both believers and detractors crying out their facts and hyperboles.

Within the web3.0, decentralized storage technologies have been rising to a crescendo. So many new names have come forth into the decentralized storage space, most backed by blockchain and incentivized by cryptocurrencies and is putting the 19th century California Gold Rush to shame.

At present, the decentralized storage market segment is fluid, very vibrant and very volatile. Being the perennial storage guy that I am, I would very much like the decentralized storage to be sustainably successful but first, it has to make sense. Logic must prevail before confidence follows.

Classic “Crossing the Chasm”

To understand this decentralization storage chaos, we must understand where it is now, and where it is going. History never forgets to teach us of the past to be intelligible in the fast approaching future.

I look to this situation as a classic crossing the chasm case. This Crossing the Chasm concept was depicted in Geoffrey Moore’s 1991 book of the same name. In his book, he spoke well about the Technology Adoption Cycle that classifies and demonstrates the different demographics and psychological progression (and regression) of how a technology is taken to mainstream.

Geoffrey Moore’s Crossing the Chasm Technology (Disruption) Adoption Cycle

As a new technology enters the market, the adoption is often fueled by the innovators, the testers, the crazy ones. It progresses and the early adopters set in. Here we get the believers, the fanatics, the cults that push the envelope a bit further, going against the institutions and the conventions. This, which is obvious, describes the early adopter stage of the decentralized storage today.

Like all technologies, it has to go mainstream to be profitable and to get there, its value to the masses must be well defined to be accepted. This is the market segment that decentralized storage must move to, to the early majority stage. But there is a gap, rightly pointed out and well defined by Geoffrey Moore. The “Chasm“. [ Note: To read about why the chasm, read this article ].

So how will decentralized storage cross the chasm to the majority of the market?

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Plotting the Crypto Coin Storage Farm

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The recent craze of the Chia cryptocurrency got me excited. Mostly because it uses storage as the determinant for the Proof-of-Work consensus algorithm in a blockchain network. Yes, I am always about storage. 😉

I am not a Bitcoin miner nor am I a Chia coin farmer, and my knowledge and experience in both are very shallow. But I recently became interested in the 2 main activities of Chia – plotting and farming, because they both involved storage. I am writing this blog to find out more and document about my learning experience.

[ NB: This blog does not help you make money. It is just informational from a storage technology perspective. ]

Chia Cryptocurrency

Proof of Space and Time

Bitcoin is based on Proof-of-Work (PoW). In a nutshell, there is a complex mathematical puzzle to be solved. Bitcoin miners compete to solve this puzzle and the process uses high computational processing to solve it. Once solved, the miners are rewarded for their work.

Newer entrants like Filecoin and Chia coin (XCH) use an alternate method which is Proof-of-Space (PoS) to validate and verify the transactions. Instead of miners, Chia coin farmers have to prove to have a legitimate amount of disk and/or memory space to solve a mathematical puzzle, conceptually similar to the one in Bitcoin mining. In the beginning, this was great for folks who have unused disk space that can be “rented” out to store the crypto stuff (Note: I am not familiar with the terminology yet, and I did not want to use the word “crypto tokens” incorrectly). Storj was one of the early vendors that I remember in this space touting this method but I have not followed them for a while. Their business model might have changed.

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