The Future of Blockchain Storage Solutions
Introduction
Ensuring the security of data is of utmost importance for all systems. Traditionally, data has been stored in relational database systems or NoSQL datastores. Unfortunately, these conventional storage methods not only make data susceptible to theft but also vulnerable to unauthorized modifications. While data theft represents a clear security breach, another significant issue with centralized data storage technologies is the presence of single points of failure.
Blockchain technology, however, provides a novel approach to data storage, offering attributes like immutability and decentralization. There are mainly two ways to store data using the blockchain. One approach involves directly storing data as part of a transaction, which is feasible for most public blockchain systems. The other method involves storing data through a smart contract.
Nevertheless, current blockchain storage solutions have their own limitations. Firstly, the cost of doing so on highly utilized blockchains can be excessively expensive. Additionally, the data stored on blockchains is often static and lacks programmability. The growing popularity of decentralized applications like DeFi, NFT, and GameFi has highlighted the increasing demand for more secure, decentralized, and cost-efficient dynamic storage systems.
We are thrilled to back EthStorage in the team’s latest fundraising round. EthStorage is paving the way for an innovative, cost-effective, and dynamic storage solution that has the potential to address the limitations faced by existing storage options.
Current Blockchain Storage Solutions
In recent times, decentralized storage has been witnessing a surge in popularity, and a variety of options have emerged in the market. Below are some of the decentralized data storage products currently available.
- Arweave
While some decentralized data storage solutions prioritize privacy or aim to evade censorship and monitoring, Arweave distinguishes itself by focusing on data permanence. Arweave functions as a peer-to-peer (P2P) storage protocol with similarities to blockchain technology. It leverages additional storage capacities from PCs that serve as Arweave clients. The system operates through an application known as permaweb, which facilitates data storage and other functionalities.
Within the permaweb, an immutable environment is created to store web pages and various types of data, including static files. To utilize this storage service, users are required to make a one-time payment using AR tokens, which can be obtained from most cryptocurrency exchanges. Notably, Arweave operates as a 100% community-driven platform and type of storage options may not be as flexible as compared to other storage protocols.
2. Filecoin
Filecoin gained widespread recognition for conducting one of the largest initial coin offerings in history, raising $257 million in 2017. Serving as a P2P network service, Filecoin utilizes blockchain technology and its native cryptocurrency, known as FIL, to provide storage services.
To carry out transactions, users employ FIL to store their files, while “miners,” or storage nodes, earn FIL for storing these files. The blockchain ledger keeps a record of these transactions and serves as proof that the files are being stored correctly. Filecoin is built upon IPFS, a P2P hypermedia protocol designed to address the limitations of using HTTP for distributed storage.
In terms of pricing, Filecoin operates as an open market that allows anyone to participate. Although this setup offers greater flexibility, it can pose challenges for organizations with specific storage budgets, especially when calculating “gas fees,” which entail charges for the resources consumed by messages.
The Filecoin project operates on an open-source basis and encourages storage providers, consumers, and developers to build applications using its file system. However, it’s important to note that the Lotus nodes utilized by Filecoin are currently supported only on Linux and MacOS, with Windows not yet being supported limiting scaling.
3. Siacoin
Similar to Filecoin, Sia utilizes blockchain technology to offer a decentralized data storage platform that encrypts and disperses files across a global P2P network. The Sia client software is compatible with Windows, Linux, and macOS and divides each file into 30 segments, distributing them to various hosts.
To ensure redundancy and enable file recovery from just 10 segments, the software employs Reed-Solomon erasure coding. Additionally, it uses the open-source Threefish algorithm to encrypt the segments before transmitting them to the storage hosts. Siacoin is utilized by renters to purchase storage, while hosts use it as collateral for storing files.
Sia’s software is entirely open-source and includes an API that developers can leverage when creating applications. The setup process for Sia, whether as a renter or host, is well-documented and straightforward, setting it apart from its competitors.
Sia offers a decentralized storage marketplace where storage providers compete for business, resulting in less predictable pricing. According to Sia, 1 TB of storage should cost less than $2 per month (paid with Siacoin), but renters should also consider additional costs like contract formation fees and bandwidth fees for file uploading and downloading.
4. Storj and Tardigrade
Storj stands as one of Sia’s primary rivals, offering similar services with blockchain-based storage. Storj Labs encompasses two distinct business areas: Storj, which focuses on the supply side, and Tardigrade, which handles the demand side. The Storj Network involves node operators and hosts providing storage on the supply side, while Tardigrade customers purchase storage through the tardigrade.io website on the demand side. In essence, Storj node operators offer decentralized storage to Tardigrade users.
Storj’s storage is S3-compatible, utilizing AES-256-GCM symmetric encryption to break data into smaller segments and store them across the global network, much like Sia. However, Storj divides a file into 80 segments, of which 30 segments are sufficient for reconstituting the entire file. According to Storj Labs, Tardigrade storage is well-suited for backups, archives, media content, hybrid cloud storage services, large file transfers, log files over 4 KB, and database snapshots. Tardigrade is also marketed as decentralized cloud storage for developers.
Unlike other services, Tardigrade offers fixed pricing, making it easier to budget for storage costs. The pricing depends on the amount of data stored and downloaded by the organization. For instance, the free plan provides users with 150 GB of storage and up to 150 GB of bandwidth per month (50 GB per project), while the pro plan charges $4 per terabyte of storage and $7 per terabyte of bandwidth.
Currently, numerous blockchain data storage solutions exist in the market, but a common issue faced by these solutions is the lack of dynamism and programmability in the stored data. Moreover, many of these storage options are not EVM compatible, limiting their use cases when interacting with EVM blockchains, which constitute the majority of the Web 3 ecosystem. As a result, innovative solutions are required to ensure that storage systems keep up with the developments in the Web 3 ecosystem.
Although there are several solutions for blockchain data storage in the market as of present, one common issue faced by these solutions is that the type of data stored is not dynamic nor programmable. Furthermore, most of the storage solutions listed above are not EVM compatible causing them to have limited use cases when it comes to interacting with EVM blockchains, which make up the majority of the Web 3 ecosystem. Therefore, novel innovations have to be created to ensure storage solutions keep up with developments in the Web 3 ecosystem.
What is EIP-4844?
The proposed Ethereum Improvement Proposal 4844 (EIP-4844), also known as the Cancun upgrade, aims to reduce transaction fees on the Ethereum network. This upgrade introduces a new type of transaction called a blob-carrying transaction, designed to lower gas costs.
Blob-carrying transactions function similarly to regular Ethereum transactions but include an additional set of data known as a blob. These blobs are relatively large, approximately 125 kB in size, and offer a more cost-effective alternative to the current calldata, which serves as immutable and read-only memory for storing transaction data.
EIP-4844 is also referred to as proto-danksharding, as it implements the framework and logic of danksharding, incorporating new transaction formats and verification rules. The goal is to enhance the efficiency of the Ethereum network and reduce the overall transaction fees through these improvements.
What is Proto-Danksharding?
Danksharding introduces a novel sharding architecture for Ethereum, utilizing sizable data units called blobs to enhance scalability. Layer 2 protocols with a focus on rollups leverage these additional blob data spaces to alleviate network congestion, ultimately leading to a reduction in transaction fees.
However, implementing full danksharding on Ethereum will not occur all at once. It will necessitate a series of preparatory upgrades, such as the EIP-4844 or proto-danksharding. As described by Vitalik Buterin, a co-founder of Ethereum, proto-danksharding incorporates “most of the logic and scaffolding” of danksharding but does not include actual sharding.
In essence, proto-danksharding serves as a prototype for danksharding, providing the necessary framework or structure to facilitate the implementation of other sharding upgrades at a later stage.
How Can Proto-Danksharding Be Applied to Storage Solutions?
Proto-danksharding tackles the gas pricing crisis through a multidimensional EIP-1559 fee market. Prior to proto-danksharding, EIP-4488 aimed to address the high gas fee issue.
EIP-4488 incorporated two rules:
- Reduced calldata gas prices from 16 gas units per byte to 3 gas units per byte.
- Implemented a 1 MB limit per block, with an additional 300 bytes per transaction, resulting in a theoretical maximum of approximately 1.4 MB.
Having a hard limit ensures that average-caseload surges do not cause worst-case load surges. This also guarantees that the worst-case block size remains lower than the current size, with 1.4 MB compared to 1.8 MB.
Proto-danksharding introduces further modifications now so that future upgrades to full sharding will require only a few changes. In contrast, EIP-4488 minimizes current changes but would necessitate more future alterations for sharding.
Proto-danksharding introduces a distinct transaction type that stores data in large fixed-size blobs, with an upper limit on the number of blobs allowed per block. These blobs are stored on the consensus layer (Beacon Chain) rather than the execution layer, making them inaccessible from EVM. This distinction is crucial.
While sharding will still be a complex task even after proto-danksharding, the complexity will be confined to the consensus layer. Therefore, execution layer client teams and rollup developers will not need to undertake additional work to transition from proto-danksharding to full sharding.
EIP-4844 also separates blob data from calldata, simplifying the process of storing blob data for a shorter duration.
Future of Blockchain Storage
The innovations of proto-danksharding opens up a myriad of possibilities when it comes to implementing storage solutions on Ethereum. One project that is capitalizing on this upcoming trend in EthStorage.
EthStorage is a storage rollup that operates atop the Ethereum network. It offers a programmable and dynamic key-value store, leveraging Ethereum’s data availability, particularly EIP-4844 and Danksharding. Through the periodic submission of storage proofs from the EthStorage Layer 2 network to Ethereum L1, the platform aims to capitalize on Ethereum mainnet security features while significantly increasing Ethereum’s storage capacity at a considerably reduced cost. Its goal is to achieve Petabytes of storage capacity with storage costs reduced by a factor of 1/1000.
Furthermore, the storage Layer 2 network is entirely permissionless, allowing anyone with a minimal storage requirement (around 4TB) to participate as a storage provider. EthStorage is seamlessly integrated with EVM (Ethereum Virtual Machine) and is fully compatible with various Ethereum development tools and frameworks, including Solidity, Remix, Hardhat, MetaMask, and more.
In addition to utilizing Ethereum mainnet security, EthStorage offers several extra advantages:
- Rich storage semantics (KV CRUD): Unlike Filecoin or Arweave, which are primarily suited for static files lacking efficient update/delete operations (requiring users to pay twice to modify existing data), EthStorage benefits from data availability (DA) and smart contracts, enabling it to provide complete KV CRUD semantics similar to SSTORE.
- Programmability: The storage within EthStorage can be programmed through smart contracts, facilitating the implementation of new features like multi-user access control or data composability.
- Atomicity with application logic and storage logic: Unlike the current process where users utilizing ENS (Ethereum Name Service) need to perform two separate steps (uploading data to an external storage network and storing the content hash on ENS), EthStorage leverages DA and EVM to accomplish both application logic and storage logic in a single transaction. This approach is more user-friendly and aligns with practices commonly found in Web2 applications, such as Twitter and Facebook.
- Zero-onboarding cost: EthStorage is built on top of Ethereum, and the storage cost is paid in ETH. Consequently, storage operations can be carried out using ETH wallets like Metamask, eliminating the need for users to learn about new tokens, wallets, or addresses.
A comparison of EthStorage versus other prominent storage protocols can be observed below.
EthStorage is paving the way for an innovative, cost-effective, and dynamic storage solution that has the potential to address the limitations faced by existing storage options. One significant demand for storage arises from on-chain NFTs, where users not only own the NFT contract token but also the on-chain images associated with it. Storing these images on a third-party platform like IPFS or centralized servers introduces additional trust concerns, as such platforms can be easily and frequently compromised.
Another demand stems from the front-end of decentralized applications (dApps), which are often hosted on centralized servers with DNS. This setup makes websites vulnerable to censorship, such as in the case of Tornado Cash. Additionally, issues like DNS hijacking, website hacking, or server crashes further compound the challenges.
By leveraging the security of the Ethereum mainnet, EthStorage can promptly resolve all the aforementioned problems at a comparable cost to competitive blockchain solutions like Arweave and Filecoin, while providing the features currently unavailable in these protocols.
