Hidden Blockchain Opportunities (3): Decentralized Cloud Storage
Decentralized Cloud Storage is one use case that’s growing very fast and aims to solve one of the biggest online challenges today. Cloud storage is controlled by a few super large providers (Google, Microsoft, Dropbox, Amazon, and so on). Raising questions about data protection, privacy, licensing, control and ownership of data. It’s yet another hidden blockchain opportunity for hosting and cloud providers.
Decentralized Cloud Storage in the Blockchain age
A few Blockchain companies have started working on proper alternatives, providing opportunities for cloud and hosting providers too! They all operate in a similar way:
- Instead of running storage through a company that controls it centrally, a decentralized Blockchain network stores the data.
- The technology is open source and there’s no company controlling the data within this Blockchain network.
- Compared to a centralized network, decentralized cloud storage ( decentralized networks ) represents not 100s or 1000s of computers/servers, but often millions. The price to store data is lower and the availability of such network is significantly higher than traditionally centralized networks.
- The data is encrypted and each user controls their own encryption keys. Making the Blockchain concept a rock solid, unhackable and unbreakable solution.
Examples of such Blockchains are:
- STORJ: (Funding: 35M USD) – Version S3 compatible V3 will be released soon
- Sia: (Funding: 1.5M USD) – in production
- Filecoin: (Funding: 257M USD) – no product yet, just a file system so far
- IPFS: (Funding unknown) – in production and already used by developers worldwide.
Where’s the opportunity for cloud and hosting providers?
Because of the way these Blockchain networks operate, there are two use cases that hosting & cloud service providers can pursue.
- Consume storage:
For example, use the storage of these networks to have an additional way of storing special or sensitive data, at a super cheap price.
- Contribute your spare/idle infrastructure:
Add it into the Blockchain network to help keep it up and running. Get paid in tokens.
We’re still in the early stage of decentralized storage, but the expectations are high. This considering the investment sizes and advantages this approach provides, compared to centrally-controlled cloud storage. So I recommend you have a look now and make sure you’re ready for it as early as possible.
Decentralized Computing powered by Fog Computing (aka Blockchain)
Imagine running a decentralized approach for computing power across millions of computers on a Blockchain. It’s probably one of the most complex Blockchain areas being built.
Traditional cloud computing, especially the hyperscale cloud providers, consists of a few large companies – Amazon, Google, Microsoft, Alibaba. They have central control over thousands of machines, used by millions of users. Plus a couple of thousands of hosting providers, but they’re 100x smaller than the global hyperscale giants.
There are now organizations, funded with millions of USD, that are trying to change this. So that cloud computing can become “Fog Computing” – a globally scalable network of computing power based on a Blockchain. Millions of computers connected decentrally – without central control. Making computing power usage on a global scale not only more secure, but also much more inexpensive.
Where’s the opportunity for cloud & hosting providers?
- Even if those new approaches are decentralized, the computing power behind is still required. But it will be layered and connected across the world through a secure and scalable Blockchain layer. Such computing power (spare, idle infrastructure) can be easily contributed into those networks and get paid in tokens.
- In case you need in-expensive computing power in a secure and scalable way, those offerings will be much more cost effective than traditional offering.
Here are a few well-funded companies working hard to launch or have already launched their network. Some even go as far as to develop apps on these infrastructures using the new standard, Webassembly.
Next Blockchain steps for Hosting & Cloud Providers?
Despite its early stage in a super fast growing and developing space, there already are multiple initial Blockchain use cases. So it’s definitely the right time for the cloud and hosting provider industry to be part of it. We recommend checking all the use cases mentioned above and in part 2 of our Blockchain series and seeing if they work for you. Be active, grow your business.
Recommendations for further reading:
- Blockchain beyond the hype: What is the strategic business value?
- Latest Blockchain news at Coindesk and Coin Telegraph.
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