In the cryptocurrency world, finding the real world use for blockchain and cryptocurrency is essential to bring forth the mainstream adoption of cryptocurrencies. P2P networks are now utilizing blockchain to manage cloud storage based on the sharing of excess drive and network capacity on PCs and in data centers. Therefore, people who share their computing capacity can earn free storage. On top of that, they will also get paid in the area of cryptocurrency.
An example of a P2P network is FileZilla. This platform is managed using blockchain, which is a peer-to-peer distributed public ledger. In fact, FileZilla has been piloting Storj decentralized storage. From here, they managed to make some profit through their free file sharing service.
The way that they make money through this business model is that they will offer a third-party software to users and in return, they will make a commission when users are trying out the software. Then, the website will divide the revenue with the third-party software vendor. Despite this, there has been privacy issues because users complain there were some advertisements which were installed without their consent. Today, this method of advertising is popular because it forcefully installs an application on the user’s device.
Cryptocurrency becomes more attractive
FileZilla shares revenue with Storj Labs. By doing this, the website can continue offering a free service and expanding their features. Using the blockchain, they offer users free access to a VPN. In fact, the popularity of this platform is evident as there are repeat users on this platform for the past few years. Also, the platform hopes to improve its appeal to users by building a reputation for itself.
Storj is a unique system because it integrates the use of blockchain. If Bitcoin mining serves the purpose of creating more Bitcoin and maintaining the transactions on the blockchain, the digital farmers on Storj can share excess network or storage capacity to other users. Similar to Bitcoin, the Storj blockchain will reward these farmers in the form of cryptocurrency.
In fact, FileZilla was searching for a solution to have access to more capacity last year. However, they found out that they could utilize the token business model to do this. Therefore, they can continue to provide the service at a low cost, if not free. Also, they can make money out of this business model. So, everyone wins.
The potential with cryptocurrencies is huge because it is game-changing, even in the e-commerce space. It can encourage loyalty among the customers of a business model. As the blockchain is a highly innovative technology, the customers effectively become a part of the ecosystem. As of today, more than 50,000 farmers have joined the Storj’s P2P network.
In 2017, Filecoin, a blockchain-based digital storage start-up managed to raise over $52 million in a pre-ICO sale. Meanwhile, in the actual ICO, they made over $205 million, which is an amazing success. However, with the rapid growth, a problem has surfaced. The blockchain was unable to scale efficiently.
Storj has recently announced that it will not be accepting any new users for the time being until it can restructure its system to meet the current demand. It is important that they freeze the system as this will avoid crashing and cause further problems within the system. The service provider hopes to open their doors within the next six months. Ethereum is also currently in the works to figure out how they can scale with blockchain. The problem with blockchain is that for every new record input in the system, the speed of the updates will be much slower compared to traditional databases.
Challenging AWS & Dropbox
With every new invention that comes in the market, there is certainly something that loses its shine. The emergence of blockchain-based distributed storage market challenges to disrupt traditional cloud storage services. This includes Dropbox that has established its position within the industry.
Admittedly, distributed computer and storage models are still in its infancy stage, but there is a huge market for this technology. However, the idea of using peer-to-peer networks using computer resources is not something new. If you want an example, take a look at BitTorrent. It is a distributed file sharing service that has been around for the past few years.
However, the presence of blockchain has helped make the mechanism for peer-to-peer services much better. Therefore, it provides a competitive edge for any service which adopts this technology. If anything, networks are also much bigger and faster today. Therefore, blockchain can help to handle a huge amount of traffic as long as the network is structured for scalability.
A worldwide peer-to-peer network
Sia is another service provider that utilizes the peer-to-peer network store data. Similar to the earlier business model, it relies on hosts access storage capacity. Currently, the platform is up and running in 50 different countries, and it has over 1000 hosts. Although it initially began with the target market of normal consumers, it now has its eyes on enterprise markets. In fact, it is targeting institutions such as enterprises, universities, and small and medium businesses.
If they can establish their business model, their services will reportedly ten times more affordable compared to traditional storage services. The reason being is that they do not rely exclusively on data centers. To give you an idea of how much it cost to use Sia, it costs an average of $2 a month per terabyte. Furthermore, Sia claims that they won’t be facing any scaling issues like any other blockchain. The technology that they have already for its prime-time.
Continuous problems with blockchain
There are instances where companies engaging in the peer-to-peer network will have a major crash. Unfortunately, most of them tend to the situation when it happens. However, Storj Labs believes in taking precautionary measures before a crash happens. Therefore, they are trying to address an issue within their system which is their API. Furthermore, the system has a single point of failure. For them to be more trusted as a service provider, they need to decentralize that point. In the long run, it can save cost and benefit the members of the network.
Also, they are also considering a technique known as sharding. Under this concept, only a small percentage of nodes are required to oversee every transaction instead of every node used to reach a consensus. Therefore, transactions can occur faster. Once peer-to-peer networks address the issues of scaling, it will be exciting to see where the future of blockchain-based storage heads.