Coin Frenzy & Decentralized Data — What are implications for Fortune 500 enterprise CIOs & CISOs? Taking stock.
[Update: after years of R&D on the world’s first moving target defense data protection platform with federal agencies and Fortune 100 R&D labs, we are productizing & commercializing CryptoMove’s moving target data protection platform as Tholos Key Vault, a product for managing keys and secrets. You can check out our private beta here.]
Decentralized data is on a roll right now. Storj — a decentralized storage platform that stores fragmented, distributed, and encrypted data — raised $20m in its ICO (“Initial Coin Offering”) this week in less than 6 hours. MaidSafeCoin’s market cap at the time of this writing is $160m+. Siacoin market cap hit $300m+ this weekend. Filecoin — a coin meant to incentivize storage on IPFS — will be the first ICO offered on AngelList’s new CoinList platform in a matter of weeks. All promise decentralized data storage with fragmentation, distribution, and encryption.
What’s going on? Centralized paradigms for storage and security are getting squeezed from both ends. On one side, from cryptocurrency-backed decentralized storage, like MaidSafe, Sia, Storj, and Filecoin. From the other end, enterprise security trends in moving target defense and decentralized data fragmentation, spearheaded by CryptoMove. The decentralized data paradigm is more secure, more efficient, more resilient and, in some cases, faster.
ICOs & decentralized cryptocurrency-backed storage
Decentralized and distributed storage has been worked on for a long time. Tahoe-LAFS, Symform, Cleversafe. None really took off in a big way (apart from Cleversafe). Tahoe-LAFS gets new releases but is slow and not enterprise grade. Symform fizzled out. Cleversafe was acquired by IBM due to a strategic synergy with Softlayer.
Now, however, blockchain and cryptocurrencies have brought new energy to the space. And in 2017, the bitcoin market has exploded, further driving momentum for decentralized cryptocurrency-backed storage. Multiple projects are working on decentralized storage on blockchain, ethereum, and protocols like IPFS. These projects leverage cryptocurrencies to incentivize usage, and create a market for buying and selling decentralized storage.
And despite Bitcoin’s recent run-up, it now makes up less than half of cryptocurrency market cap, leaving space for alt-coins to take off.
Meanwhile, we’ve been quietly working on CryptoMove, and our underlying distributed programming language Hello, for 5 years in stealth before launching to the enterprise market this past January.
So what does today’s decentralized storage coin landscape look like?
Storj
Storj’s ICO is ongoing, and raised $20m in the first 6 hours. As of this writing, Storj has raised $26m. Storj markets itself as “a peer-to-peer network comprised of ‘farmers,’ users who rent out their spare hard drive space and bandwidth, and ‘renters’ who purchase space and bandwidth.
Storj claims to be “up to 10x faster and up to 50% less expensive than traditional datacenter-based cloud storage solutions.” At CryptoMove, we are not deep in the weeds of cryptocurrency or blockchain. But we do know a thing or two about decentralized storage and the performance benefits of fragmentation. Given Storj’s approach of fragmentation and distribution, these performance claims are not surprising.
Sia
Sia too is a storage platform that “splits apart, encrypts, and distributes your files across a decentralized network.” Siacoin’s market cap is much larger than StorjCoin’s — over $200m. Note that on these platforms the alt tokens are used for buying and selling the storage itself. Sia has a robust roadmap over the next two years, publicly shared because it is open source technology. According to Sia’s website, “the promise of Sia is a decentralized network of datacenters that, taken together, comprise the world’s fastest, cheapest, and most secure cloud storage platform.”
MaidSafe
Market cap for MaidSafeCoin is $130m+. Unlike Sia and Storj, Maidsafe is not just decentralized storage, it aims to decentralize compute as well and enable applications to be built on top of its network. Per MaidSafe, the project’s “aim is to provide privacy, security and freedom to everyone on the planet.”
IPFS & FileCoin
IPFS has an ambitious vision to replace HTTP, and is a peer-to-peer distributed filesystem. FileCoin, backing a “distributed data storage network,” is a coin being minted a few weeks from now, aiming to incentivize storage on IPFS. It is also the first coin offering from CoinList, a new venture from AngelList. Will be exciting to watch this token sales in the coming weeks.
What does this all mean for CIOs, CISOs, enterprise security teams, and infrastructure architects?
Upshot: Most enterprises are, and will continue to be, locked out of this massive decentralized data trend.
Many in the Fortune 500 took five years too long to get into the cloud. There are Fortune 50 companies who are now only beginning to experiment with managed private clouds. Some don’t have public cloud on the roadmap for production data until 2019 (!). If public cloud is taking so long, what are the prospects for decentralized distributed data?
Beyond standard organizational blocks to adoption (as Mark Cranney has written, technology adoption in corporations can be a “tortuous” process), there are very real barriers for Fortune 500 enterprises to adopt crypto-currency backed decentralized data storage:
- Enterprises must buy storage with a government-backed currency. Allocating budget to one of the new decentralized storage coins will be a tough sell, particularly for sensitive and regulated data. This may change, but not until alternative currencies penetrate enterprise balance sheets.
- Enterprises can’t participate in an anonymous decentralized storage network. Today, even multi-tenant cloud applications face an uphill battle, where enterprises are sharing databases in SaaS vendor cloud infrastructure. Using a decentralized storage system where storage providers are anonymous and can be anywhere in the world is a non-starter. Enterprises must answer to governments, must have audit-able records, and must be able to conduct forensics on their data after incidents.
- Enterprises can’t afford to wait and see which decentralized storage network and cryptocoin will win out. In 5 years will most storage miners provide storage on FileCoin? MaidSafe? Storj? Swarm? Sia? Much easier to swap the Lyft app for the Uber app than it is to transition enterprise storage infrastructure from one network to another.
- Enterprises like using current infrastructure. Many top companies have thousands of servers, dozens of data centers, and massive costs sunk into existing storage hardware. Not to mention billions of dollars in investments in cloud infrastructure such as AWS, Azure, and Google Cloud Platform. Abandoning this for decentralized crypto-token backed storage on the blockchain or ethereum is a tough sell.
With all that said, however, there are clear benefits and value to decentralized data for enterprises.
- Data fragmentation and distribution is more secure. Decentralized fragmented and encrypted data is much more difficult to attack than centralized data, even if centralized data is encrypted at rest. Attacks on decentralized data reveal only encrypted fragments, not entire data. Add in dynamic movement, mutation, and re-encryption of data, and decentralized data is clearly the best form of data security available.
- Decentralized data is faster. Hotter data can be kept closer to applications. Fragmentation of data speeds up I/O because smaller fragments can be saved and retrieved concurrently, as opposed to centralized data storage systems. It is no accident that Storj and others advertise 10x faster speeds at certain scales.
- Decentralized data is more highly available and resilient. When data fragmentation is combined with replication of fragments, loss of storage nodes doesn’t cause data loss. Data can be recovered with less than all the fragments. Decentralized data storage avoids things like the recent outage of AWS S3.
- Decentralized data combines legacy and modern storage systems. Decentralized data architectures can combine storage in private clouds with the public cloud, and across public clouds. It can create mesh storage across connected IoT devices such as drones or robots (work CryptoMove is already doing with the Department of Homeland Security).
How does CryptoMove fit into all this?
With CryptoMove, innovative Fortune 500 enterprises are leapfrogging the centralized and silo’d cloud universe and jumping straight to decentralized data infrastructure. Also, CryptoMove enables organizations to cross the gap from their on-prem, private cloud, and public cloud world to the inevitable decentralized data future. CryptoMove is both a bridge and a slingshot for enterprises on the front lines of this massive decentralized data transformation.
CryptoMove enables enterprises to adopt decentralized data with existing infrastructure.
Resistant as enterprise immune systems might be to change, the reality is that enterprise data is already decentralized. Some data is on-prem. Some in AWS, Azure, or Google Cloud Platform. Some in Box. SaaS. In some verticals, like industrial, manufacturing, and others, data is decentralized across factory floors, drones, connected cars, and other edge/IoT gateways.
Further, data decentralization trends will only accelerate in the future. Cloud architectures will make way to multi-cloud architectures. Increasing computing power at the edge, or “fog”, will mean more data is processed closer to devices rather in a central storage silo.
CryptoMove enables data decentralization transformation for enterprises — today — in a way that doesn’t require unregulated cryptocurrencies or anonymous storage hardware in all parts of the world. Further, CryptoMove advances groundbreaking security and risk strategies around moving target and dynamic defenses. Install a few CryptoMove nodes in an existing data center or cloud infrastructure and — boom — an enterprise is living in the decentralized data future.
Not to mention, CryptoMove’s architecture allows it to provide decentralized moving target data protection for any storage back-end or filesystem. Not just a local disk, a SAN, AWS S3, or a third-party SaaS vendor. But CryptoMove can even integrate with decentralized crypto-token backed storage systems like Storj, Sia, FileCoin, or MaidSafe. Can your CASB do that?
Decentralized data is an exploding technology trend, with hundreds of millions in value for decentralized storage networks generated in a matter of weeks. And the decentralized data token explosion is not just a symptom of irrational virtual currency exuberance — the underlying technology trend has real game-changing security, efficiency, cost, and performance implications. While tokens may be virtual, the impact of decentralized data on enterprise infrastructure is very real. At CryptoMove, we’re excited to lead the charge in helping bring this paradigmatic transformation to the enterprise.
