Why might the next generation of storage be decentralized storage brought by blockchain?

In traditional data centers, companies manage their storage needs by adding server racks. In this world, storage is centralized, making it both inefficient and insecure. However, if there were a new open source storage project, the storage would be blockchain-based, providing end-to-end encrypted - highly decentralized - storage. Such storage would not be distributed to a few data centers, but rather distributed across hundreds or thousands (or millions?) of nodes, while also providing superior performance due to its peer-to-peer nature.

Is that really true?

Yes, it is. At least, if Storj lives up to its hype. In a conversation with lead developers John Quinn and James Prestwich from Storj Labs, they described a glorious future of storage that is cheaper, more secure, and performs better than any other data center or cloud storage offering. But will anyone use it?

Blockchain is coming

Blockchain has become an increasingly hot topic in recent months because of its ability to provide distributed security. However, little has been said about the technology's impact on storage. The developers of Storj aim to change that. Storj is an open source object storage similar to AWS S3 or Microsoft Azure Blob Storage.

Storj (pronounced like 'storage' in English) hopes to make object storage easier to use through intuitive tools and documentation, a modern API and an open source try-before-you-buy approach. But in fact, all of this is mainly derived from the power of blockchain. You can think of Storj as a distributed cloud storage network, suitable for storing static content today, but the storage of objects in the future will be far more than that.

This blockchain-based decentralization allows developers to store data in a secure, high-performance and cheap way, spreading the data across many nodes. As for the security of the data, the blockchain approach means that each file is shredded and encrypted with your own key, and then spread across the network until you are ready to use the file again. When you need to retrieve it, the files will be decrypted and quickly and seamlessly reassembled.

By definition, Storj doesn’t need to build or operate data centers, so capital expenditures are minimal, which reduces storage costs. (Quinn told us that Storj’s storage costs are half of other cloud storage competitors, such as Amazon Web Services (AWS).) Storj’s peer-to-peer architecture also enables data from these different shards to be downloaded in parallel, allowing Storj to fully utilize your download connection rather than relying on inefficient single-source downloads.

That’s the good news. The bad news is that Storj is still small, with only 5,000 API users and 7 terabytes of storage capacity in August 2016. However, it’s heartening to see that this number has increased by 100% in just the last month. Storj’s growth trajectory is still very positive.

Stand out from the crowd in storage

However, Storj needs more users and more storage capacity. As mentioned earlier, the biggest question is whether Storj can stand out. As one storage industry executive said, although he "loves Storj's technology, there are so many storage companies and the market is already very crowded that it's not enough to just have cool technology."

Storj hopes its combination of ease of use and rock-bottom prices will attract developers, not to mention the option of selling excess storage capacity on their hardware to earn a bitcoin-like currency, while Storj pitches security and performance to the businesses that employ those developers.

In turn, Storj Labs makes the Storj project easier to use by removing the pain points of running a Storj network node. The company handles bridge networks, payments, auditing, contract negotiation, shard placement, and more so that users can have a smooth and simple object storage experience. As the Storj network grows, the company is able to observe historical performance data of network nodes and then optimize network usage.

As to whether this is enough, we can only say ‘maybe’. This technical approach is cool, and improving storage costs, security, and performance is even cooler. However, I doubt that large-scale use will occur until a large cloud storage provider joins the blockchain storage market, perhaps by acquiring Storj.