The Sia Storage Platform is a decentralized cloud storage platform with a blockchain-based cryptocurrency called Siacoin (SC) designed to reward storage space providers (called ‘hosts’) on the network.

‘Cloud storage’ is defined as data storage on remote servers/computers accessed from the internet. This is in contrast to local data storage on a computer’s hard drive, a USB key or on a local network. Sia is considered decentralized because it doesn’t rely on a central entity to control the stored data; the data is spread across the world rather than in large, centralized data centers.

The Sia platform seeks to use underutilized hard drive capacity around the world to “create a data storage marketplace that is more reliable and lower cost than traditional cloud storage providers” to become the new “storage layer of the internet.”

We’ll take a look at how Sia is planning to disrupt the cloud storage industry while exploring the following topics:



What are Sia and Siacoin?

Nebulous, Inc., the Boston-based parent company of Sia, formed in 2014 and launched the Sia Storage Platform in 2015.

As mentioned above, Sia seeks to connect users who need file storage with hosts, which are simply Internet-connected computers running Sia’s host software. The Sia blockchain and its associated smart contracts are the foundation of a disintermediated cloud storage marketplace. The blockchain is used to secure the data and to operate an automated reward system based on the Siacoin cryptocurrency.

Sia’s ultimate goal is to become “the storage layer of the Internet”, using blockchain technology to replace the functions of centralized data centers and cloud storage companies like Amazon and Dropbox. According to the Sia website, their platform ensures that “no one person or organization can censor or deny access to data—not miners, not developers, nor any government.”

Sia works by splitting files up into small encrypted pieces and distributing them across the network of hosts. Theoretically, anyone is able to rent storage space from hosts, and anyone with hard drive space and a decent Internet connection is eligible to become a host.

The Sia team theorizes that in the beginning, the Sia network will be full of hosts that use mostly “leftover or recycled drives” that can offer low prices due to the low cost of setting them up. In the long run, this may change, however, as host competition leads to a demand for faster, higher-quality drives.

The Technology Behind Sia

The technology behind the Sia Storage Platform is fairly complex, but by breaking it down we can get a better sense of how it works.

First of all, because anyone can become a host, the platform is focused on making sure data on the network is secure—even in the event that a host or group of hosts have malicious intent. There are three core strategies used by Sia to do this: redundancy, encryption and automated host incentivization.

Redundancy

Once a user has followed the steps to upload files, the Sia software automatically breaks the files up into 30 segments before uploading, with each piece going to multiple hosts anywhere on the planet. This wide distribution ensures that no host becomes a single point of failure and that network redundancy and uptime is maximized.

The file segments are created using a process called Reed-Solomon erasure coding, a technology widely used in CD and DVD writing that creates redundancy within data sets so that lost data will not lead to missing files. Using this technology, Sia encodes data such that any 10 out of the 30 segments can fully recover the files. Therefore even if 20 of 30 hosts go offline, Sia users can still access their files.

If a given host has 95% uptime (a very reasonable number for file hosts and Sia’s goal for minimum host uptime), this 10-of-30 setup provides a file uptime exceeding 99.999999999% according to Sia. This redundancy also protects against a host or group of hosts who might try to hold data hostage, since users only need 10 hosts to recover their data.

Later once the network grows and stabilizes, Sia plans to use a 20-of-50 redundancy model that will be about as reliable but more scalable.

Encryption

All files stored on the Sia network are encrypted using the Twofish encryption algorithm, an open-source, well respected encryption standard that makes the data unreadable to hosts. Files are encrypted before the segments are sent to host computers, ensuring hosts only store unreadable encrypted data segments.

This is in contrast to traditional cloud storage providers who do not encrypt data by default (or at all), leaving the data vulnerable in the event of a hack on the cloud. Whether they realize it or not, this requires users to put their trust in companies whose employee access policies and security practices may be unknown or poorly enforced.

Host Incentivization

Hosts on the Sia Storage Platform are motivated to keep data safe through an incentivization program that uses smart contracts called ‘file contracts’. These digital agreements between a renter and a host establish terms related to pricing, uptime and time period commitments.

Once an agreement has been reached, the renter stores Siacoin in a smart contract as a sort of escrow using the blockchain. Hosts also put money into the contract as collateral.

At the end of the contract period (typically in 90 day increments), the host provides a proof of storage to the blockchain. Their collateral is then returned, and the file contract will automatically coordinate payments to the hosts. The Sia system automatically renews contracts if desired, and will otherwise return unused Siacoins to the renter at the end of a contract.

This dual incentive-penalty system for hosts makes it unlikely that they will not fulfill a contract or that they will hold data hostage. Additionally, the trustless and automatic nature of the smart contracts cut out any need for third parties in the transaction.

Since renters can see the uptime and reliability of hosts through the public blockchain, there will be an incentive for hosts to be faster, cheaper and more reliable. As described by an administrator on the Sia forums:

The Sia platform creates a marketplace “where the only rules that matter are how efficient and how good your storage capabilities are. If you can offer better storage at a lower price, people will choose you and not your competitors. You will have more income, and your competitors will go out of business. This competition is always active, and always brutal, meaning innovation is very strongly supported and prices will constantly be driven into the ground.”

Automated Host Selection

According to recent updates from Sia developers in the project’s forum, there is one significant challenge left to solve: finalizing a scalable, ratings-based, automated host selection process. Currently, Sia automatically selects hosts for renters based on the cheapest price available, with a few other factors thrown in such as age of host and uptime. This means that it is possible for renters to be manipulated into using certain hosts by the host simply setting a very low price.

The would-be attacker may do this in order to carry out a Sybil attack, a hack in which one person pretends to be many. This would allow a malicious host to use potentially thousands of machines, each pretending to be a different host, to take advantage of renters by taking their data hostage.

Sia’s current plan to mitigate Sybil attacks is called proof-of-burn, which they have slated as a long-term goal. This system will require eligible hosts to “burn” Siacoins by sending them to addresses where they can never be accessed or spent again. Hosts must burn about 4% of their revenue as a demonstration that they are real, and renters can then select hosts based on how many coins that host has burnt, with the probability that a host is real growing with the number of coins burned.

In this way, an attacker trying to manipulate a renter would need to have control of enough host accounts and burned enough coins to appear to be 67% of the entire network (at present). It is calculated that a Sybil attack on Sia would therefore be even more expensive than a 51% attack on Bitcoin.

This coin burn mechanism is just one criteria that will factor into ratings for hosts, which will then allow hosts to be selected automatically based on that rating.

The score will go up not only based on the number of coins burned, but also based on uptime (less than 95% uptime will be heavily penalized), prices (based on market hard drive prices), collateral provided on the data, and honesty (this is not further specified, but one assumes they mean honesty in the information about their drives).

Host selection will be determined on a per-renter basis, with each renter able to customize their preferences for host selection.

Target Market

Sia’s approach is to target large users of data like companies and storage providers as potential consumers for their platform. The idea is that file contracts of individual clients can be merged into larger file contracts. These larger players would then theoretically manage the user data, potentially allowing them to pay in fiat money as well.

This targeting of large companies and storage providers rather than individual users is similar to enabling Lightning Networks on other blockchains: larger Siacoin transactions and file contracts take place on the main blockchain, while day-to-day Siacoin transactions and individual user contracts will be ‘off-chain’ and managed by other companies. This should make the Sia platform much faster and more scalable than if the focus were on many small users.

The Sia Blockchain



Sia uses a custom Proof of Work (PoW) blockchain for coordinating file contracts and payments. The Sia blockchain uses much of the same code as the Bitcoin blockchain, with a typical PoW consensus mechanism that preserves Bitcoin’s 10 minute block times.

However, some changes have been made to Bitcoin’s code. For example, some of Bitcoin’s well-known bugs (e.g. transaction malleability) were fixed for Sia’s blockchain. Sia also uses the aforementioned 256-bit Twofish encryption algorithm rather than Bitcoin’s SHA-256.

For more information on PoW and other blockchain consensus mechanisms and hashing algorithms, see our consensus mechanisms article.

Sia Development Roadmap

The Sia network is quickly growing. In January 2018, Sia had about 75 hosts with less than 500 TB of storage space and a file contract size of 35 terabytes. Presently the network has almost 1,000 hosts with over 3.3 petabytes of space, and a total contract size of 400 terabytes (a 1,200% increase in hosts and 1,000% increase in file contracts).

The development team still has several things planned for the remainder of 2018, including file sharing and software improvements, along with a redesign of the Sia user interface.

By 2019, Sia has a goal of approaching Amazon S3 cloud storage speeds and plans to introduce content distribution functions. At this point, they also plan to begin partnering with large companies and storage providers to use their platform instead of centralized data centers.

For more information on the Sia roadmap, see the Sia roadmap Trello page.

How to Buy and Store Siacoin (SC)



You can purchase Siacoin (SC) on several exchanges, including Binance, Upbit, Bittrex, HitBTC, Poloniex, QBTC and fex, among others.

Rather than keeping your SC on exchanges, however, we recommend storing them with the Sia UI, which contains the official wallet. Unfortunately, storing SC in the wallet requires that you download the entire 10 GB+ blockchain. The download can be expedited if you first download the nightly blockchain database here.

Conclusion

Although Sia is still in its early stages, there are many promising developments on the horizon that could give it an edge over other distributed cloud storage solutions. Innovations like automatic host selection have the potential to completely disrupt the cloud storage industry by providing cheaper and more secure solutions compared to some of Sia’s more centralized counterparts.

That being said, Sia’s underlying technology is still unproven. If Sia delivers on its promises of acquiring partnerships with large companies such as Dropbox, they may succeed in becoming part of the “storage layer of the Internet.”