According to a 2022 report by Markets and Markets Ltdstating that it has a winning formula for businesses looking for a secure, lower-cost option to store large amounts of data on the Internet.
Cloud storage is dominated by big, centralized players, such as Amazon Web Services, Google, and Microsoft, but with such revenue at stake, blockchain developers are looking to disrupt the industry with decentralized storage solutions to overturn the holders.
The Interplanetary File System (IPFS), powered by the Filecoin blockchain, has seen the amount of data stored on its network increase 15x in the year to last December. Matt Hamilton, lead developer at Protocol Labs, the company behind Filecoin, predicts that cloud storage is on the way to a decentralized future.
“I see it growing quite significantly in 2023,” he said, “[this year] we’ll see a lot more use as a front-end [solutions] facilitate the participation of individuals within the network.
Proponents of decentralization argue that the model brings benefits such as security, cost, and privacy. This last point is a hot topic in the debate over the control that tech giants have over huge amounts of personal information and the sale of that data to advertisers.
IPFS was created eight years ago as a decentralized way to store content-based data. The current method of storing data is generally location-based.
“The idea being that even if you were trying to communicate between different planets, you would be able to reference content and it could be retrieved from a local server near you, without necessarily having to go back and forth interplanetary to retrieve it.” said Hamilton.
The Filecoin system is a sister protocol to IPFS, which adds an economic incentive for storage providers on the IPFS to be compensated with the network’s native cryptocurrency, FIL.
This is similar to how Bitcoin network miners are incentivized to maintain the network and validate transactions by being rewarded with Bitcoin, a model used by many Web3 projects.
hamilton said Discard that IPFS has added more than 4,000 storage providers over the past two years and the network is currently reaching 16 exabytes of total storage capacity, or approximately 1% of the world’s total data center storage capacity .
Some major projects are already turning to this system. OpenSea, the largest non-fungible token market in the world, stores its NFTs on IPFS.
Wikipedia, the open-access online encyclopedia, also stores some of its data on the IPFS, a move that avoided potential loss of information when it was blocked by the Turkish government for three years until 2020. .
“One of the primary purposes of what Protocol Labs does is to store humanity’s data,” Hamilton said.
“Because we’re in a much more data-centric world these days, the ability to be able to store data, retrieve data, and be able to verify the veracity of the data and ensure that the data hasn’t been tampered with is essential.”
March will also see the Filecoin Virtual Machine (FVM) deployed on the network. Similar to the Ethereum virtual machine running on the blockchain of the same name, the FVM will expand the use case of the Filecoin network through smart contracts and greater web3 utility.
Proponents say this will enable the full extent of decentralized finance (DeFi) functionality on IPFS, allowing storage providers and customers to engage in lending and borrowing markets, increasing the flexibility of data storage arrangements. Not everyone is convinced, however.
Athreya Ramadas, CTO of cloud technology company Rapyder Cloud Solutions Ltd., said Discard that decentralized storage solutions have been around for a while, but haven’t caught on. He cited the early days of the Internet and the use of torrent sites for decentralized storage.
“I don’t know if businesses or customers will be happy with decentralized storage because you never know where it’s stored; you don’t have control of your data,” he said.
“When it comes to health care or [other sensitive business] data that I’m responsible for as a fintech provider for my customers’ data, I don’t think it will ever go into decentralized storage,” he said.
Andrew Lokenauth, technology analyst and founder of Fluent in Finance, said he sees the future of cloud storage as a combination of centralized and decentralized offerings.
“It is important to note that decentralized solutions are still in the early stages of development and may not yet have the same level of reliability and scalability as centralized solutions,” he said in a statement. interview.
“Centralized solutions will continue to be the option of choice for many businesses and individuals due to their established infrastructure and proven track record of reliability and security,” Lokenauth said.
“However, decentralized solutions will also play an increasingly important role in the industry, providing an alternative option for those looking for a more secure and transparent way to store their data.”