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What is Storj? Explained , STORJ Price Prediction and everything you need to know about STORJ

Storj is a decentralized cloud object storage platform on the blockchain. It is a competitor to centralized object storage services, in particular, Amazon S3, Cloud Files, Windows Azure and Google Cloud.

Cloud storage has grown in popularity. And that is because it takes away the most mundane tasks of handling data from individuals and businesses. 

You no longer need to buy material and hire engineers to set up a data center for your business. You don’t need to worry about such things as the maintenance of the hardware and software components. 

You can just plug in and get the best data management services ever. And that gives you the time to focus on your core operations and achieve your business goals.

Meanwhile, cloud storage guarantees not only security but also access to data at all times. The service provider takes the responsibility of making sure that the storage is up and running 24/7. 

Before Storj, the only way cloud storage worked is that a major tech company acquired and ran servers with large storage. The company leased this space to individuals and businesses remotely over the internet.

While this model has worked for decades now, it has several weaknesses that the Storj platform seeks to overcome for the end user. 

The weaknesses include:

1. All the data is in one place, essentially.

The basic model is that all the data is stored in the same physical server. Of course, the company might have backups in different geographical locations so that when one server is not accessible for whatever reason, the others are available.

Nevertheless, this centrality creates an easy target for hackers for data theft. It is also easy to sabotage the entire system.

Meanwhile, the owners of the data have to trust that the people running the storage services are trustworthy and will not be motivated enough to sell the data under their care to third parties.

2. The service can easily experience outages

 If access to the company’s data centers is hampered because of censorship, a fibre optic line being cut or destruction of where the data center is situated, then the service is not accessible.

Sometimes users can experience slow service because of more traffic than the system can handle.

3. Limited ability to quickly upgrade and expand operations

In order for a centralized cloud storage service provider to expand its operations, it has to invest a significant amount of resources in equipment and the infrastructure. 

This may need to cost an amount of money that might not be available immediately. It might also take months and even years before the upgrade or expansion is completed.

With the peer-to-peer architecture of Storj, things are done in a way that an upgrade and increase in capacity can be realized in a short time. We will see how this is possible in a moment.

4. The files are not encrypted

The owner of the files can encrypt them. However, this does not come as part of the solution. 

Given that the files are not encrypted, anyone with access to the database can read them. 

That person can be an intruder, the person given the responsibility to protect it, or someone like a government agency with enough force to compel the company to give them access.

It costs a lot less to secure data on the blockchain than what it costs to do it while it is stored in centralized databases. Of course, this cost is passed on to the end consumer.

Also, with access to the data, the service provider might be tempted to sell the data to third parties, especially with a little transparency at how the systems are run behind the scenes.

5. Offers no opportunity for ordinary users to generate revenue

It is a one-way traffic. Users buy space from the service provider—a large tech company. Meanwhile, all around us there are terabytes of memory not being used. 

People and companies have acquired this memory, but it stays idle most of the time. It is an opportunity for them to keep files for others and generate revenue. 

This has the impact of reducing the cost of cloud storage significantly.

Meanwhile, the obstacles to entry into the cloud storage business is huge. Any business that plans to do it has to have a huge capital for acquiring equipment and setting up a huge infrastructure.

Storj background

Storj Labs, the company behind the Storj network, was founded in late 2013 by Shawn Wilkinson, then a college student who had discovered Bitcoin recently. After playing around with the cryptocurrency, it occurred to him that the technology underlying it, the blockchain, offered many more opportunities, including supporting other applications besides digital currencies. 

One of those was a platform that could make it possible for people to trade computer memory in a peer-to-peer arrangement.

Storj Labs is based in Atlanta, Georgia, but has attracted talent from around the US and the rest of the world. 

On 24 May 2017, the startup organized an Initial Coin Offering (ICO). It put on offer 25% of the 500 million Storj coins minted on the Ethereum blockchain. They sold all of them and raised $30 million.

The ICO was necessary for raising the needed funds to build the protocol and the larger infrastructure. It also served the purpose of releasing Storj coins to users of the platform. 

Of the 500 million Storj tokens minted on the Ethereum blockchain in 2017, 75 million were burned during the initial coin offering. Today, about 425 million coins remain in circulation.

The coin is what clients use to pay for the storage space they acquire on the platform. It is important to have this token because it is not possible to create smart contracts with fiat currency. 

Nevertheless, protocols have been created to make it possible for the clients to pay using fiat, which is then turned into Storj behind the scene and spread out to farmers as Storj coins. 

The Storj coins can be bought in most major crypto exchanges. They are ERC-20 tokens, meaning they are transacted through all wallets that support Ethereum. 

Storj coin market performance since ICO.

So how exactly does Storj work?

Storj is divided into two platforms that are marketed as separate brands; Storj and Tardigrade. The two are accessible through separate portals.

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Storj takes care of the storage supply side. It is through this platform that anyone with memory they don’t use can plug it to the network and have others use it and pay them.

Meanwhile, Tardigrade takes care of the demand side. All those who need space in the cloud to store their data come to the network through the Tardigrade platform. Indeed, Tardigrade is designed so that clients get a user experience similar to what they get when they use Amazon S3 or Google Cloud.

When you upload a file through the Tardigrade interface, it is first encrypted locally with private keys only you have possession of. The protocol is designed to use authenticated encryption, in particular AES-GCM cipher, Salsa20 and Poly1305.

It is recommended that for every file you upload you use a different private key. This increases security as it creates more obstacles an attacker seeking to access your data has to go through. Essentially, this arrangement makes it near impossible for your fails to be accessed by anyone else.

The file is then split into numerous pieces known as shards that are sent to different nodes on the network. Each node is a storage unit (node) someone has created and connected to the network by running the Storj core protocol.

The metadata of each piece of the file is created and stored on the network as well. This metadata is used when recalling the file. It is, also importantly, used to recover every shard even when some nodes with the file’s shards are not online when the client needs their file.

Indeed, the technology is designed in such a way that it protects your file from unavailability in case it happens that when you need it, a particular node is not online.

You see, on the Storj network, no one is compelled to have the node around all the time. That means people can join and leave the network at will. Those who go offline often have file pieces that might be recalled any moment.

Other decentralized storage protocols use what is known as mirroring, which is basically replicating copies of the shards and storing them in different locations so that when one copy is not accessible because the node that has it is offline, another is available. 

Storj uses a technology known as erasure codes. This is an encoding scheme that repairs data from available metadata. The choice of this path is informed by the need to reduce the amount of bandwidth usage. 

You can learn more how the erasure code works by reading their detailed Storj white paper.

Those who connect nodes and provide storage units (or farmers, as they are called) are also incentivized to maintain the node online. This is done in two primary ways. 

One is through the reward they earn from the network for making their memory available for others to use. 

As the owner of the file, when you upload a file you enter into a smart contract with the system. Part of that contract is funds you make available to be paid to those who happen to keep pieces of your file. 

The second way the Storj protocol incentivizes node owners to keep them online is through a reputation system. Details like how often a node is available to provide a needed piece of file and how often it loses contact with the rest of the network are collected and used to construct a detailed reputation.

Nodes with high reputation receive more file pieces to store, which means more revenue. Those with the worst reputation might be ignored often, which means they receive less reward. 

When you need to access the file, you will recall pieces from different locations and decrypt them locally with the private key that only you have access to.

The splitting of the file after encryption and their storing in different locations around the world ensures that no one else will ever get the means and the opportunity to read them. Not even the developers at Storj Labs, the company behind the project.

For the person storing the pieces of files in their node, they are useless, unreadable content. And for an attacker to access the file, they have to find your private key and then call all the pieces from wherever they are stored 

Meanwhile, government agencies have no one they can compel to give them access to your files. Not even Storj Labs.

Meanwhile, it costs up to 50% less to use Storj than the centralized cloud storage services. This is even though the experience for the user is not any different. 

How to store files on Storj

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The person who uses the Storj platform to store files is known as a client. And you access the service on the Tardigrade website. You will sign up with your email like you would on the other cloud object storage services.

After you confirm your email address, you are then directed to an onboarding page where you are expected to choose the file transfer protocol (FTP) you prefer using. The choices they have are Gateway, Developer Library, CLI Tool and FileZilla.

You can then add your payment method and pick a plan that fits your data needs. 

How to making money with Storj

If you have free storage on your home computer or you can acquire memory, you can head to the Storj website, follow provided instructions and connect it to the network. After this, you generate revenue for keeping files for others and they pay you for it.

Because Storj is a public peer-to-peer network and uses an open source software, you don’t need any permission to join it. It also does not matter what part of the globe you are located. All you need is the right kind of hardware and a reliable internet connection. 

The basic requirements include your node being of 1 Processor Core, at least 550GB disk space, and at least 2TB bandwidth a month. It should also have a minimum upstream bandwidth of 5 Mbps and a minimum download bandwidth of 25 Mbps.

With those being in place, you should make arrangements so that the node is online 24/7. That could include having back up for both internet connection and power supply. You should also see to it that you have the technical capacity to monitor it so that there is swift intervention when there is a technical glitch. 

You should be aware that while there is no one to deny permission for you to join the network as a node, your performance determines how successful you become and how much revenue you can generate.

The protocol audits the nodes periodically according to their availability when they are needed to provide accessibility to pieces of file they hold. The reputation system rewards those who provide reliable services over those who don’t.

Therefore, it is important that your storage node is consistent in keeping the data it is given and does not have technical failures. If the audits show it to be unreliable, the protocol will ignore it and redistribute data to new nodes.

In addition to running a storage node, one can also run a satellite. This is a mediator node between the Tardigrade user interface and the storage nodes on the network. Each satellite is in charge of several nodes. It assigns the storage nodes to particular file shards.

The satellites earn a part of what the nodes in their charge earn. Like the nodes, they are audited and therefore earn a reputation. Those with the best reputation find it easy to attract nodes to work with them.

How Storj compares to centralized cloud storage service.

Storj is not the only project that is using the blockchain to build cloud storage solutions. Other similar projects include Sia, Filecoin and Blockstack. 

With that being the case, the centralized cloud storage platforms such as Amazon S3, Cloud Files, Windows Azure and Google Cloud remain its primary competitors. 

So how does Storj stand when compared to the centralized cloud storage platforms?

1. Security

While the centralized cloud storage platforms rely on controlling access to data centers, Storj provides the client the ability to control the access to the files themselves. 

Meanwhile, the centralized service providers have full access to the files. Indeed, they can read, move and even delete them if they want to. Storj, on the other hand, gives all the control to the owner of the data. Only they can read, move, or even delete them. 

They are also the only ones through the private keys who can give access to the data. To others, including Storj Labs, the satellites and the nodes, it remains gibberish content.

2. Privacy

When it comes to data, privacy is something that most people are always concerned about. Centralized cloud storage platforms of course promise to give it like other online service providers.

However, their architecture makes it a little harder to keep this promise. Given that the data is in centralized databases, and access is controlled by the service provider, there is a likelihood of them either failing to prevent intrusion, having a rogue employee leak data or be compelled by authorities to give it.

Storj protects privacy through encryption that happens on the client’s local computer. The layer of privacy is enhanced through the sharding of the files and sending of each piece to a different location.

There is no server to hack the node owners can’t read the files if they wanted to, and there is no one beyond the actual owner of the file to compel to give access.

3. Upgrade and expansion

When there is a need for more storage, the company does not need to look for capital to buy more hardware and lease more physical space. The system scales horizontally.

Indeed, the demand itself incentivizes more people to connect to the network and supply more space and earn the fees. The memory becomes a commodity whose supply can shoot up instantly if there is a demand for it.

4. Accessibility

Storj is designed to be accessible to any area, no matter what the situation is. The data centers of the centralized cloud storage companies are spread in a couple of countries on the globe. 

If the internet to certain countries is cut because of some technical hitch (like a fibre optic being cut), the country cannot access the service even if the internet within the borders is working fine. 

With storj, the nodes are everywhere, and they don’t rely on central control to work. That means even if an area is cut from the rest of the world, the nodes within that area will still function and also provide the service adequately. 

5. Transparency

It is only the management and the tech teams behind the centralized cloud storage systems who know what actually happens behind the scenes. The rest of the people have to trust that what they are told is the truth.

Storj is built on open source software. It is also a public peer-to-peer network. Anyone with the technical capacity can audit it and figure out how everything works. It offers transparency that can assure anyone that the system works as we are told it does. 

6. Opportunity for the public to earn

The Storj protocol creates a straightforward path into a business that until now has only been the preserve of a few tech companies with a significant amount of capital to efficiently compete at the marketplace. 

Now anyone with even the smallest amount of resources can join the market and indeed make a profit.

Conclusion

Storj is changing how we store files on the cloud. It is a leader, but not the only service provider of this kind. In a few years, all the cloud storage providers might find its model the most appropriate. 

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