Is It Profitable To Rent Your Computer's Storage Capacity to Blockchain?
In the last few years, since the concept of decentralization really kicked off, people continued developing it and finding new use cases for it. Eventually, this led to an idea of decentralized storage, which works in a pretty simple, and yet quite brilliant way.
The fact is that the most computer owners simply do not use their computer's storage capacity to its full extent. Therefore, a large part of their storage capacity sits idly, without ever being used. So, why not put it to good use, and in the process, make some money out of it?
The Concept Of Decentralized Storage
The very nature of blockchain technology revolves around decentralization, sharing responsibility among users, and rewarding the participants. As the time went by, the participation in decentralizing the internet got a lot of support, and many have rushed into the new space, which has led to numerous new providers of decentralized file storage.
Most such providers offer a pretty similar service — the data owners would encrypt their files, and then split them into many smaller file chunks. These file chunks would end up being shared across multiple nodes (different computers connected to the blockchain). The pieces would be smaller or bigger in size, depending on the users' security preferences.
By spreading these files over a large number of nodes, each individual that is renting the storage space would only have the smallest chunks of files, that are still encrypted. This decreases the potential for a data breach and even data theft. When the owner of the data wishes to access their files, they would simply enter their own private key, which would locate and recover all chunks of data that was distributed over different nodes.
The files are then unlocked with the original encryption key, and the data owner will have full access to their files, no matter where they are stored. As for the hosts, they will receive tokens as a reward. The tokens would be provided by data owners, and each individual that served as a data host would receive a part of a reward.
The security benefits of a system like this are obvious straight away, and the process is clearly way more secure than giving your data to a centralized service. Such services may use encryption of lesser quality, which can lead to data theft. Additionally, decentralized data storages can be much cheaper, and provide much more security. For example, decentralized provider Sia offers an entire terabyte of storage space for only $2 on a monthly basis. Storj, another such provider, charges only $0.015 per gigabyte on a monthly basis.
Storj Vs Sia
Storj was criticized due to some elements of centralization, but it works pretty similarly to the process that was previously described. It should also be noted that it uses ERC-20 tokens for enabling smart contracts between hosts and data owners. However, the controversy arose due to the fact that their services are managed by Storj Labs exclusively. Storj claims that this way of doing things helps with managing a large number of different payment methods, which is opening the platform to even more users.
Sia, on the other hand, works in a different way. While the basic principles of the decentralized storage are still being followed, the difference in their approach lies in the blockchain implementation. Where Storj uses blockchain to run the reward mechanism, Sia has its own blockchain that is used for establishing trust between hosts and data owners. The contracts between the two parties provide a lot more security, but can often be confusing to data owners.
Essentially, data owners need to specify just how many Siacoins are they willing to pay during the certain period that the contract will cover. Sia will then negotiate the terms with the hosts. This makes the process a bit more abstract, while some argue that the transparency is reduced.
The situation is more complicated for the hosts as well. At Storj, if your uptime is not as high as possible, you won't make a profit. At Sia, you need to own a certain amount of Siacoin as proof of your commitment. So, if your uptime is not high enough, you will actually be punished for it by losing the investment.
Obviously, both services have their positives and negatives, whether you are a host or a data owner. In the end, it is still just business, and the terms are relatively clear. The final decision on whether you will be a participant or not rests upon you and you alone.
The fact is that computing power, as well as storage capacity, are becoming desperately needed in the modern world. The concept of decentralization through blockchain technology is getting more and more accepted each day. The benefits are obvious — the speed is better, the fees are lower, and the security is better than ever before.
This is why computing power and storage capacity are becoming a necessity, and connecting them through blockchain can end up being very profitable for the renters.