Decentralized Cloud Storage: Comparison Storj — 0chain
In between all the security breaches, hacks and data losses of centralized entities that we’ve heard of lately, there’s a quiet movement growing set to replace the centralized nature of the current cloud technology with a decentralized one. Decentralization mitigates the risk of data failures and outages, and at the same time increases security, performance, and privacy of object storage.
In this article, I am comparing two very promising projects based on blockchain technology, both with the potential to disrupt the centralized cloud storage industry.
I am talking about Storj and 0chain. Let’s examine the basic characteristics of both projects.
Both Storj and 0chain are permissionless ledgers with a global distribution of nodes in the network. This means that the nodes (i.e. computers running software to confirm transactions on the network) are free to join and leave at any time without any centralized entity giving them permission to do so. While 0chain is weeks away from launching its Alphanet, and a few months away from the Mainnet, Storj already has a very decentralized network, currently running about 150.000 nodes globally in their Alphanet.
Because of the decentralized nature, both networks are very resilient to DDOS attacks and takeover threats. Again Storj, in theory, might have a slight upper hand because of the larger decentralization aspect, meanwhile, this is something that can be configurable within the scope of 0chain’s configurable self-forking chains.
From the ideology perspective, things are bound to be similar as both projects aim to develop technology capable of decentralized cloud storage with similar or better capabilities than their centralized competitors. However, Storj and 0chain begin to diverge when we drill down into the details, primarily on the protocol level, favorable economic incentives for both service providers and end users.
Let’s examine where Storj and 0chain diverge.
INFRASTRUCTURE & PROTOCOL LEVEL:
The first obvious difference is that Storj is an open source project from a for-profit company while 0chain is run by 0chain Foundation currently not open source but planning to release the code after establishing a favorable market position.
The second difference is in the nits and grits of how they provide cloud storage.
Storj provides it through a decentralized peer-to-peer network that aims to make use of all the excess capacity around the world in the form of unused hard drives and bandwidth. Your computer probably has some spare storage capabilities. You can download the client and become a storage provider. There are 4 stages of the Storj protocol: the data encryption, the sharding of data to small bits, the distribution through the network and finally, the audits of data to ensure integrity and availability.
0chain also applies data encryption, sharding, as well as data audits. A key distinction of the 0chain system from Storj is a solution that divorces the role of mining from that of providing storage. Those computers are referred to as blobbers. In this way 0chain protocol lightens the load on the mining network and enable much faster transactions with extremely low latency, keeping their blockchain lightweight. You can refer to the comparison table for the difference in transactions per second as well as transaction finality speed of the two blockchains. This capability enables 0chain to achieve enterprise-grade level storage similar to Amazon Web Services for enterprises, which no other blockchain is able to do yet.
0chain is also not limited to just being a storage solution. Their storage solution will be brought to market with their breakthrough dApp, 0box, a Dropbox-style cloud storage solution on the blockchain with all its benefits. Later this year, 0chain will implement smart contracts into its fast throughput blockchain that will enable dApps using 0chain as layer one for computation as well as cloud storage, tackling one of the biggest problems blockchain currently face, blockchain bloat.
SERVICE PROVIDERS (farmers)
Both projects enable virtually anyone with a computer and an internet connection to become a service provider on the Storj and 0chain networks.
With Storj, you need to give up your free storage and bandwidth of your computer and deploy it in the Storj network. In return, you are granted a reward in the form of Storj token. The rewards using only your personal computer are very limited and thus buying a dedicated rig or joining a cloud mining operation is to consider. Searching through the Storj community I was able to find that a ballpark figure for how much farmers are earning are as follows:
- Used space: 2–6$/TB/month
- Paid upload bandwidth: 0.02–0.05$/GB/month
We should note that payment magnitude largely depends on the number of file mirrors (copies) on the network.
You can gauge the expected payout using Storj node earning estimator: https://storj.io/storage-node-estimator
0chain is based on staking for both service providers as well as clients. There is basically no barrier to entry for clients and a very low barrier to entry for those interested in earning passive income by providing network infrastructure (service providers). Exact minimum requirements are yet to be released but it’s been said that anyone with a 4-core laptop and high-speed internet connection will be able to join the network. As the system is reputation based (how reliable is your node) it will probably be more profitable to run specialized equipment or simply lease the compute power from AWS.
0chain mainnet will be deployed in about 3 months so we do not have exact figures yet. We can estimate service providers earning based on simulations.
0chain mining calculator: http://blockchain.sculptex.co.uk/0chain.php (made by 0chain ambassador)
Storj network allows you to simply buy storage just as you would on a Dropbox. However, it is been noticed that the service is not as cost-effective as first promised.
As you can see from their website 1GB of storage per month costs around $0.015. To evaluate things from the common denominator we need to transform it into TB (terabytes) per month. This would make Storj storage costs around $15,36 per 1TB/monthly. Comparing this to the traditional, centralized cloud storage provider such a Dropbox (8,25€ or 9.4$/monthly if billed annually) we can see that users pay a hefty premium for the decentralization aspect of the storage.
The most interesting thing with 0chain is their economic protocol, which has really turned things upside down for the competition. Instead of the traditional subscription model, they’ve developed a Cost-to-Asset model where clients lock tokens to directly generate token rewards for service providers.
Tokens are not consumed when employed, allowing 0Chain clients to continue to use these tokens indefinitely. To explain simply, you buy 0chain (ZCN) tokens, stake it on the network and use the cloud storage (and eventually other services) for FREE, indefinitely (or as long as you need the service). If at some point you don’t need the service anymore, you can simply sell the tokens and redeem your investment (or even profit if the price of ZCN rises). In any case, you are not at a loss, because your ZCN tokens have an intrinsic value directly correlated to the size of the cloud storage you are using.
All this also applies to other services that are coming later this year, such as cloud computing capabilities, decentralized exchange and before mentioned smart contracts.
0chain will make it very simple for non-crypto users to acquire storage through fiat gateway and settle everything necessary on the back-end. This can be a major advantage for 0box adoption.
CURRENT STAGE OF DEVELOPMENT & CONCLUSION
Storj network is currently in its Alpha phase mainnet V2, looking to launch V3 of its mainnet in fall 2019. According to the Storj team, their alpha net network has been growing steadily, reaching 150,000 storage nodes covering around 200 countries with capabilities to store over 150 PB (petabytes) in capacity. You can join the Storj node waiting list on their website (https://storj.io/#waitlist).
0chain is currently just before the release of their alpha net and their secure wallet, with the main net scheduled about 3 months later. Their impressive roadmap is stacked for 2019, rolling out smart contracts, decentralized exchange, cloud compute capabilities among other things.
To complement the releases, a new website is coming but you can already pre-register to test 0box on their current website.
To conclude, let’s take a look at the current market valuation of both projects.
Storj currently enjoys a 35 million USD market cap. This after the benefit of launching their token in 2017 bull market, taking their market cap as high as 314 million USD.
0chains’ market cap currently fluctuates between 3–4 million USD without such benefit, launching their ZCN token in the midst of 2018 bear market.
I am looking forward to seeing how market evaluates both projects after they both deliver a market-ready product, which users and service providers will be able to compare side by side.