What is Decentralized Storage? (IPFS, FileCoin, Sia, Storj & Swarm)

Tom Terado
Bitfwd

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Decentralized storage has fascinated me for a while after coming across the Filecoin ICO which raised over $250M dollars with leading investors such as Y Combinator, Naval Ravikant, Andreessen Horowitz, Union Square Ventures Sequoia and Winklevoss Capital. Considering how much they raised, there must have been a reason as to why industry leaders are betting on its success so I started to read more into the protocol it uses: Inter Planetary File System (IPFS) and understand what other projects in the space are doing.

What is Decentralisation + Storage?

Decentralization is understood as the transfer of authority from a central entity to a more localised and ‘liberal’ system. The concept itself has been around for awhile and an earlier concept could be paralleled to the introduction of the Internet where the spread of information was democratised. The term is now being coined against Blockchain technologies and applications such as Bitcoin and Ethereum which decentralise financial transactions and computing power.

Storage is defined as the retention of retrievable data on a computer or other electronic system. We use storage on a daily basis from the mobile phone and computers we use and it is easily understood from the files we put onto a USB stick. From the days of having to put files on a floppy disk to being able to place files in the ‘cloud’, storage has come a long way.

So why Decentralized Storage?

The current solutions of Google Drive and Dropbox still work great there is no reason to change something if it works just fine. However there have been growing concerns as to why users want to switch from these systems due to the restrictive nature of some services as well as the more commonly understood reports of recent company data leaks. Examples include:

  • Equifax (Data costs of up to $400M)
  • Facebook Cambridge Analytica (Up to 87M user data leaked)

There were of course several factors that contributed to the data breach regarding the security measures, however, one major factor revolves around the central server storage of such information. Data breaches have been happening since the…

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