Hidden Blockchain Opportunities (3): Decentralized Cloud Storage

Hidden Blockchain Opportunities - Decentralized Cloud Storage - Plesk

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

Hidden Opportunities for Hosting and Cloud Providers - Decentralized Cloud Storage - Plesk

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:

(Read part 1 of the Blockchain series if this is not clear yet)

  • 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.

  1. 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.
  2. 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.

Hidden Opportunities for Hosting and Cloud Providers - Fog Computing - Plesk

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?

Computing power:

  1. 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.
  2. 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:

← Go to Part 2

Hidden Blockchain Opportunities (2): Masternodes & Enterprise Blockchain Hosting

Hidden Blockchain Opportunities - Masternodes and Enterprise Hosting - Plesk

If you remember the concept of “Proof of Stake” (e.g. no “mining” with special hardware needed), most of alternative cryptocurrencies out of Bitcoin and Ethereum still require a good amount of “full nodes” that keep the decentralized network up and running. Masternodes are the back-end network of proof-of-stake cryptocurrencies.

1. Masternodes and Blockchain

A wallet, or a whole blockchain instance, runs on millions of computers worldwide keeping the various blockchains up and running. Masternodes do that in real-time, with more advanced setups, and often running in data centers.

Hidden Opportunities for Hosting and Cloud Providers - Masternodes

This is where the opportunity is for cloud and hosting service providers. The modern way of mining – keeping public decentralized blockchain networks up and running.

Why are Masternodes gold for cloud and hosting providers?

  1. You can setup more/better targeted solution offerings for people who are interested in hosting their cryptocurrency masternodes with certain pre-configurations.
  2. Cloud and hosting providers can run their own masternodes with spare hardware and monetize this new opportunity.
  3. When running masternodes as a cloud & hosting provider:
    • If you run pre-configured masternode VPSs that you sell to end customers, you can charge a premium for the managed service (security or monitoring, for example) and simplify the automation of masternode VPSs.
    • If you run one or multiple masternodes yourself, you can monetize spare infrastructure or hardware in a much better way.

How to make money from running masternodes

Generally, the masternode concept, like Dash or Zcoin, is an investment. So besides helping to keep a blockchain network up and running, you are:

  1. Investing in cryptocurrency money upfront, limiting entry to those who really mean business.
  2. As soon as you have the node up and running, you’re getting a share of the transaction fees. At the time of writing, crypto prices are low, so you can sell high later. And considering the run into Blockchain worldwide was so fast, it’s likely prices will rise again soon.

Here’s a good resource on masternode types and their relevant ROI.

But before you set up your own Masternodes, please:

  1. Make sure you understand the technical platform, team and project behind each masternode concept. And be certain there’s a real cryptocurrency and blockchain running behind it.
  2. Diversify your investments and don’t put all your money into one single masternode concept or cryptocurrency.
  3. Comply with AML (Anti Money Laundering) and/or KYC (Know Your Customer) Laws.

Masternode providers today:

2. Enterprise Blockchain Hosting

So far we’ve been talking about public Blockchains. That means zero central control and all of them decentralized. Some would call them “uncontrolled” despite the built-in consensus mechanisms those blockchains have.

Hidden Opportunities for Hosting and Cloud Providers - Public vs Private Blockchain - Plesk

However, for some time, there’s been another approach – private/permissioned Blockchains. This rising star will convince large enterprises to benefit from Blockchain technology because all stakeholders can easily share data across multiple companies and competitors in a secure way. And this wasn’t available before at reasonable cost.

The main difference is that they’re only available to a set of stakeholders with read and/or write access. Often, an association of adjacent companies or competitors use such stakeholders for a secure proof of record for a selected set of data. This is based on distributed consensus algorithms – and still not seen by the rest of the world.

This means great Enterprise/ permissioned Blockchain Hosting opportunities for cloud, managed and infrastructure providers. Because they can build, run and manage such Blockchain infrastructures for their customer or multiple customers.

There are several example projects in production already, even outside the classic financial use case. Including identity systems, real estate, supply chain and more. Ultimately, they provide a better approach than traditionally centralized databases.

Companies and organizations to check out if you want to learn more:

Stay tuned for the final part of the Hidden Blockchain Opportunities series next Monday. We’ll talk about one more use case for hosting and cloud service provides – Decentralized Cloud storage!

← Go to Part 1
Go to Part 3 →

Hidden Blockchain Opportunities (1): Hosters, Cloud Providers & Plesk

Hidden Blockchain Opportunities - Hosters, Cloud Providers and Plesk - Plesk

Cryptocurrencies lost a chunk of their value in the last nine months – and I lost most of my money! Blockchain and legal cryptocurrency issues – Ring any bells? You may have heard about the mysterious Satoshi Nakamoto inventing the first cryptocurrency in the world – Bitcoin (more details in this Bitcoin whitepaper). And thus, hidden Blockchain opportunities for hosting and cloud providers.

Being active in global closed Blockchain user groups, like Crypto Explorers and Nextblock, I learned from higher profiles than myself. Now I’m a Chainstack advisor, which is like Plesk for Enterprise Blockchains – a spin-off of our partner, Acronis. And here’s my take on all the Blockchain hype.

Blockchain opportunities across different levels

Blockchain started by solving what any cryptocurrency solves: the “double spend problem”. So if you think about copy/pasting files today, they’re all identical files. With cryptocurrencies – that can’t happen. And there’s more to come.

Like storing in a secure, decentralized (not controlled by a company/person) system that nobody can change. Since they’re decentralized, they’re all open source!

Moreover, the organizations owning the intellectual properties are mostly consensus and direct democracy-based foundations. This is to make sure intellectual property survives any commercial failures a company may have. Here’s a 2-minute video that sums it up nicely:

But that wasn’t enough. Later came Ethereum, based on a more advanced concept allowing a “smart contract” on top of Blockchain. Basically, self-executing computer programs that are legal contracts. But with more dependencies and automatic execution of clauses than possible with a traditional contract. Here’s a 90-second Ethereum overview and how smart contracts work on top of a Blockchain:

This not only changes legal models across many industries, but economic ones too! The following 15 minutes dig into a range of opportunities for kids to experienced adults to experts:

And what about other cryptocurrencies like EOS, IOTA, Tezos, NEO, DASH and more? They’re just different blockchains (decentralized encrypted computing networks and protocols), similar to Bitcoin, but mostly to Ethereum.

What’s Plesk doing in the Blockchain space?

We have a network of 382,000 servers, hyper-decentralized across various data centers worldwide. So we’ve already developed prototypes. Soon you may be able to offer your Plesk server’s spare hard disk space on the decentralized storage network. And vice versa, backup your server or website into decentralized storage.

Hidden Blockchain opportunities and Plesk

Soon, we’ll launch a new Plesk Extension: Cloudbric. Cloudbric is a spin-off of Penta Security Systems in Korea, and one of the leading cyber security companies in the Asia-Pacific region. Cloudbric offers an advanced WAF (Web Application Firewall) and is transforming into a Blockchain-based company. Soon available as a one-click experience within the Plesk ecosystem.

Plesk is also an alpha partner of STORJ, the decentralized cloud object storage that’s affordable, easy, private and secure. STORJ is Amazon S3 compatible and will be integrated as a Plesk Extension early 2019 as STORJ goes into production.

Besides focusing on simplifying the lives of web professionals, Plesk will add more useful tools and products on top of the platform. Helping cloud and hosting providers increase their success. Such tools might be extended with Blockchain use cases over time, so watch this space!

Current Blockchain drawbacks we can solve

First of all, you might have heard that operating any Blockchain network requires a lot of power and parts. Bitcoin and Ethereum need mining – computing puzzles that a decentralized network participant needs to solve to append the decentralized leger. The leger is where info is stored, unchangeable and encrypted via “blocks” that build a “chain”.

Bitcoin Mining requires hard-to-get ASIC chips and Ethereum needs scarce graphic cards. This process is inefficient and expensive to operate. However, it’s very secure, and is technically “Proof of Work.” Now, although Proof of Work is an operational requirement for many Blockchains, it isn’t the preferred way.

Hidden Blockchain Opportunities - part 1 - Blockchain Mining

First of all, it’s expensive and only worth it if prices are high. And because of special hardware requirements, it’s not for everyone and not at scale. This is why other Blockchains and their cryptocurrencies invented “Proof of Stake” – something that Ethereum are still aiming to reach this year or next.

Blockchain benefits for hosters and cloud providers

Proof of Stake would result in being able to operate Blockchains on completely standard infrastructure and hardware – without any special requirements. Basically, making it available for everyone. And this is where hosting and cloud service providers come in.

You have 100s or 1,000s of servers on stock, and many of them idle or not fulfilling full potential. So take this opportunity to join a new world and spend computing power on a potentially more useful concept. Check the market leaders in the field – hyperscale cloud providers Amazon, Azure, Google and IBM – They’re already on it. What about you?

Stay tuned for part 2 of the Hidden Blockchain Opportunities series next Monday where we’ll dive into detailed use cases for hosting and cloud service provides!

Go to BlockChain Part 2 →