Whether it’s backing up our mobile phones and photos or companies storing their records, our appetite for storage continues to grow, with global data storage expected to reach 181 ZB (zettabytes, 10 zettabytes or 10 zettabytes).21 bytes) by 2025.
While web2 giants like Amazon’s AWS and Microsoft Azure dominate the industry, there is a subtly growing sub-industry focused on decentralized data storage.
Central storage providers like AWS store data on internal servers, which means that users’ access to their data can be cut off by the hosting company if they choose to do so. This may happen due to various reasons such as non-payment, violation of terms of service, etc.
In contrast, decentralized storage providers like Filecoin store data on a distributed network of thousands of nodes around the world. According to Messari analyst Sami Kassab, Filecoin increased its storage in the last quarter by 128% to 16.87 EiB (exbibytes or 2)60 Byte).
Filecoin is a project founded by Protocol Labs that raised $258.2 million largely through its ICO 2017. It was launched on the Ethereum mainnet in October 2020, and currently has a market cap of $2 billion.
Like central storage, Filecoin’s decentralized cloud storage can be used to store any type of data. Instead of paying users to central providers, they pay storage providers around the world. Storage providers or nodes get the original FIL code for the network. The company has already partnered with companies such as Wikipedia, The Genome Aggregation Database (gnomAD), and the online library Project Gutenberg.
This is not just a case of decentralization fever. “For cryptographic protocols to thrive securely and securely, decentralized storage is a required underlying infrastructure layer,” Kassab told The Defiant. He explained that most blockchains are not optimized for storing large amounts of data, so it makes sense to store them on a chain like Filecoin.
He continued, “Without decentralized storage protocols, users and developers will have to rely on large centralized storage providers, which goes against the ethos of the space, which includes censorship-resistant systems and sovereign data.”
Not only does decentralized storage support the spirit of encryption, it’s cheap too!
Storing data on a decentralized storage platform can cost a fraction of the price of a central storage provider. While it can cost upwards of $75 to store 1 GB of data on AWS or Google for one year, it’s almost free on Filecoin.
Due to this cheap price to attract users, Filecoin has grown in data storage, but the revenue of the protocol has remained flat. Independent crypto analyst Hunter Lampson told The Defiant that Filecoin frequently supports block rewards to offer free storage to major partners. Like many emerging industries, venture capital funds are fueling the fire more than actual demand-side revenue.
While this sounds alarming, Kassab told The Defiant that “data storage is only the first step in Filecoin’s roadmap.” He explained that Filecoin will add smart contract capability that enables programmable applications on Filecoin. “It looks like Filecoin is basically trying to establish itself as an AWS in the crypto world.”
By adding more services to the protocol, Kassab believes this will strengthen the Filecoin network for storage providers and add additional revenue streams for service providers and the protocol.