Siacoin: Decentralised Cloud Storage on The Blockchain
Sia is one of the few altcoins that has released a product and is already doing what was promised. Right now, anyone can upload files and store them on the Sia network. It works at scale, and it’s a fraction of the price of uploading to AWS and other cloud storage companies. The recently released Sia v1.3.1 brought significant improvements to the network and on these foundations, Sia coin has become a highly sort after cryptocurrency.
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What is Sia coin?https://www.youtube.com/watch?v=B4YGpWxyn6Y Sia is a network that connects latent computing power with the people who need it. Who really uses all the space on their hard drive? 2 - 5 TB hard drives are standard in most gaming and high-end computers. The idea is that there is all this storage space under people’s desks sitting idle, but we pay companies like Amazon, Google, and Apple, stupid amounts of money to store and control our data on centralised servers. Blockchain takes care of the trust element. Files aren’t stored on the blockchain because that would make for a slow, efficient and expensive system. The blockchain is used to keep track of accounts. The power of Sia’s blockchain is that it is immutable and using smart contracts process can be automated so no central body is required to act as an intermediary.
How Does Sia Solve Scalability IssuesWhen you use Sia you need to download and verify the entire blockchain before you can start uploading. Once you have done that, you set up a rental contract that pays hosts on the network. The Sia network has a really clever way of balancing accounts using smart contacts, and it is also how this POW blockchain has managed to overcome the scalability issues that are affecting other blockchains in the space. Instead of creating a new transaction every time a host is paid an incremental contract is created between the host and the user. That locked up money has 2 payouts: one for you, and one for the host. Initially, the smart contract says that you get all of the money back and the host doesn’t get any money at all. But as we upload and download, we update the contract to say that the host gets a little money, and then continue updating it as the host is paid increasing the hosts ratio of money. “ It is like predating checks or a utility bill. This is how Sia solves scalability. Sia only needs to broadcast updated version of the contract to the blockchain. Over the course of a month, a contract can pay a host thousands or even millions of times, but only a single blockchain transaction is needed to update the ledger on the new ratio of money. When an account is created on Sia, the renter forms 50 incremental contracts with different hosts. From this pool of 50 up to 30 hosts can have a fragment of your data. This is the system’s fail safe. Up to 20 of the hosts in the network can fail, and your files are still recoverable. Sia has an atomic size of 40MBs. This means that every file that is uploaded takes up a minimum of 4MB. Knowing this, most people will have the foresight to zip their smaller files.
Why Should I Invest In Siacoin?You should invest in Siacoin if you understand what they are trying to do and believe there is a market for the service they provide. They’ve had a functioning prototype since June 2015, and the Sia wallet is a well-designed interface that people can use to interact with the network. As far as functionality is concerned, Sia is further along in development than most top ten coins. Network usage is what is going to decide the long-term value of Siacoin. Siacoin is used to rent space on the network. Each block mined 300,000 Sia coins are created. After height 270,000, all blocks will have a reward of 30,000 siacoins. By about July of 2020 there will be about 44.55 billion and miners will mine about 1.57 billion Siacoins annually. By Match of 2021, the inflation rate will be around 3.4%. In the 2040s the coin will settle into 2% inflation rate, and its decline will gradually slow into the indefinite future. There are a lot of Sia coins in circulation, so it would take an inconceivable market cap for Siacoin to be worth a few dollars or pounds. There will also be a burn criteria in v1.2 that requires hosters to burn tokens every once in a while to prove that they are active. Another element to the token mechanic that doesn't get as much attention as I think it should is that the cost to participate in the network as a host increases. Currently there isn’t enough activity on the Sia network to make hosting worthwhile. It is hard to get someone to agree to rent a TB, and there is no barrier to entry. The market is flooded with space for almost no money. These conditions aren’t natural. When people do start to use the network. The 10,000 Sia coins it takes to host become worth more while desire to holds them grows in parallel proportions. It will take a larger investments to earn larger returns.
Factom, Filecoin, Storj and MaidSafe are probably Sia’s biggest competitor. Is the 260 Billion dollar cloud storage industry big enough to support all of them? Probably, but it will be worth keeping an eye on these other altcoins. MaidSafe has been around over a decade, and Factom has some really experienced and connected team members, but I think Siacoin is winning the race to working product which is all consumers really care about. Another big difference is how Sia targets file storage for any user. They are building a tool that anyone can use, while Factom is targeting companies and aiming for data distribution. Filecoin is the most similar to Sia. Filecoin is a newer coin that has an impressive ICO war chest but no product. Maidsafe has the slowest dev cycle of almost any crypto, they got started pre-Bitcoin and there's still not a whole lot to show for it.