Examining Decentralized Storage

By , Saturday, March 18th 2023

Categories: Analyst Blogs

Tags: blockchain, data protection, data resiliency, Decentralized Storage, public cloud, web3 storage,

Overview:  Decentralized storage, also sometimes referred to as web3 storage or blockchain storage, refers to a set of data storage solutions in which data is stored across a pool of decentralized storage devices. Storage space can be rented from anyone who makes it available to the protocol, creating a cloud of storage, with no central data center. Decentralized storage is still relatively new, but the solutions available present a number of compelling characteristics, including economics, security, and data protection capabilities.

Examining Decentralized Storage – A More Public Cloud

Analyst Take: It’s well known that datacenters have seen an ongoing shift from on-premises storage to increasing usage of public cloud. Less well known, however, is the idea of decentralized cloud storage. While the public cloud receives its name from being open for anyone to store data in, the actual storage of the data isn’t exactly “public” – instead it is siloed within the datacenters of the cloud provider. Decentralized storage on the other hand offers an even more public cloud.

Decentralized storage solutions, or decentralized clouds, not only provide the freedom for anyone to store data in them, but also enable anyone to act as the cloud provider. These solutions essentially act as an AirBnb for storage — those with free storage space can make it available to rent, and those with data can rent this space for a set period of time.

The obvious concern here becomes “How can I trust this?” In a public cloud, this is fairly straight forward – the customer pays a cloud provider, most likely Amazon, Google, or Microsoft, and in return, the cloud provider stores the customer data. Seeing as these companies have reputations to uphold, and they are legal entities in which action can be taken against, there is a high level of confidence that the cloud providers will in fact do as they say and store the customer data.

By contract, with decentralized hosts, more safeguards are required. The customer does not know who is storing their data or whether the decentralized host they are considering can be relied upon to act in good faith. The storage hosts are of course still incentivized to store data by receiving monetary compensation, but they are also required to put up collateral that will be taken away if the data is not kept available. Cryptographic proofs are used to ensure that the data is in fact being stored, and blockchain smart contracts are used to secure and enforce the rules.

In a decentralized hosting situation, data is further protected by encryption – so the content is not accessible by the host, and other protections include either some form of replication or erasure coding to ensure data availability even in the event of one or more bad actors.

There are currently several decentralized storage solutions available, including Filecoin, Sia, and Storj, as well as new solutions – such as Impossible Cloud – in development.

The Benefits of Decentralized Storage

So what are the benefits of decentralized storage? The idea that an open, decentralized storage cloud can be used in a secure and reliable way is certainly neat – but is it actually useful?

The guiding principle behind many of the decentralized storage protocols today, lay within the broader ethos of web3, hence decentralized storage often being referred to as web3 storage. The core ideas behind web3 revolve around decentralization and ownership. Decentralized storage offers just this – cloud storage that decentralizes data, and reallocates control of that data to its owner, rather than a centralized cloud provider. While much of the allure of public cloud storage is that it relieves the onus of storing data from the individual or organization – their data is then put under control of the cloud service provider. While it is unlikely that Amazon, Google, or Microsoft will do something nefarious such as delete the customer data – they are ultimately in control, and they do present a centralized point of failure. Attacks on these cloud providers happen, and outages do occasionally occur.

With decentralized storage, however, there is no single point of failure. It is improbable, if not impossible, that an attacker would be able to identify and successfully attack a dataset spread fully across a series of decentralized hosts. Similarly, in the event that one – or even potentially a handful – of hosts act in bad faith, data is still recoverable from the other hosts it is spread between. While a gut reaction to decentralized storage may be that data is not secure “on some other person’s hard drive” the reality is that without a centralized vector of attack or failure, decentralized storage makes a compelling argument for data protection and data resiliency.

Perhaps the most attention-grabbing benefit to decentralized storage for many, however, will be the economics. Exact pricing will fluctuate from protocol to protocol, but the core concept remains the same. By amassing a large pool of storage provided by anyone with spare capacity, the price per GB can be driven down significantly and provides a cheaper alternative when compared to the prices set by public cloud providers. In many cases, decentralized storage may not have the performance or enterprise features required for primary data storage, but the low cost per GB that decentralized storage can achieve lends it nicely to data archival use cases.

The Road to Adoption

While decentralized cloud storage presents several seemingly attractive benefits, the road to adoption is not without its hurdles. This is a relatively new storage technology, and it should not be thought of as a one size fits all replacement for all data storage. Instead, it becomes another option that can be deployed alongside on-premises and public cloud storage solutions as part of a hybrid multi-cloud data environment – likely as an archive or as one component in a data protection strategy.

Decentralized storage may not meet the performance requirements for primary storage use cases. It also may not meet many of the feature requirements or protocol compatibility required by enterprise IT. In addition, many of the current solutions are tightly intertangled with cryptocurrency, creating a further barrier of adoption due to both regulatory issues and complexity involved in handling cryptocurrencies, managing crypto wallets, and funding transaction gas fees. While current implementations of decentralized storage may have found some success catering to individual data storage needs as an alternative to purchasing an external hard drive or using Dropbox, in order to become a competitive solution for enterprise data storage these areas will need to be addressed.

More insights from Evaluator Group:

Changing Storage Vendors – Object Storage

IBM Makes a Number of Storage-Focused Announcements

And feel free to check out Evaluator Group’s research on Cloud Technologies here:

Evaluator Group Cloud Research

Disclosure: Evaluator Group, wholly owned by The Futurum Group, is a research and analyst firm that engages or has engaged in research, analysis and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article. Analysis and opinions expressed herein are specific to the analyst individually.

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