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Storj (STORJ)

$ 0.1221913 (1 STORJ) -2.28%
Storj is an open source blockchain-based platform for decentralized file storage awaiting a full network launch in fall 2019. Its STORJ token should incentivize disk space sharing with with more attractive rewards as the demand increases.
Market Cap Volume 24h Circulating Supply Maximum Supply
$ 16,592,043
135,787,433 STORJ
$ 2,542,385
20,806,595 STORJ
135,787,439 STORJ 424,999,998 STORJ

What is Storj?

The Storj (pronounced as “storage”) platform bills itself as a decentralized file storage solution which combines the benefits of cloud-based storage and blockchain technology. At the heart of the project is the Storj network which, among other things, allows the users to put up their free disk space for rent. Users which are required to store files and assets online can access the Storj network and rent the available storage resources from the renters in this ecosystem (“farmers”). The payment is effected with STORJ tokens on the blockchain and their use is supposed to encourage users to become a sort of small-scale cloud storage providers.

What Is Storj Trying to Achieve?

In order to be able to ultimately challenge the dominant cloud storage providers such as Google and Amazon, Storj’s model had to be designed to meet several challenges.

Lower Costs

  • Current infrastructure costs incurred by centralized storage systems could be driven down by the decentralized model offered by Storj. With their focus on decentralization, the Storj team hopes to present its platform as an affordable cloud storage solution. By eliminating the need for running data centers, the cuts in costs promised by Storj should reduce the current prices offered by the centralized storage providers by at least 1/3. This is to be achieved by cutting the costs of maintenance, bandwidth and utilities via utilization of what the Storj team describes as underused storage resources existing at the network edge.
  • These are to be particularly beneficial for small businesses which need storage yet do not have the capacity or funds to build and maintain full-blown data centers, hard disk arrays etc. The end users would be able to pay for what they actually want to use, with no minimum usage requirements or setup fees.

More Secure and Private Storage

  • The storage model proposed by Storj would operate in the manner similar to that of the internet itself, in the sense that there will be no control by a single entity over billions of devices in use. According to the Storj developers, the decentralization of the internet did not reach the management of data that come through it. Actually, these data are rather centralized and entrusted for storage to several global providers running a network of data centers. This comes with a variety of risks, including data breaches, global interruptions in the provision of services and higher storage costs.
  • Bytom aims to take on the popular cloud storage services such as Google Drive and Dropbox by reducing its reliance on the bandwidth or electricity resources available to data centers. It will offer temporary storage of large files which can be shared or distributed as part of point-to-point transfers.
  • Security and privacy would be ensured by the end-to-end encryption by which only the owners of files would be given access to their data, instead of having the companies exhibit full control over their documents. At the same time, the global distribution of files offered by Storj is also promoted as a more reliable solution compared to more centralized storage.

Better Scaling

  • In an age of rising demand for data storage resources, the Storj network promises more flexible scaling model. Storing exabytes of data can be challenging at the time when whole economies rely on their effective use. The Storj team went on to design a network which promises to meet the demand for faster data storage and larger formats, while leaving enough room to be eventually expanded in line with popular demand. With the help of its sharding technology, encryption and data distribution across the nodes, the Storj hopes to beat the traditional on-premise storage systems and offer better performance and reliability across the board.
  • Storj also wants to establish itself as the media transfer and backup platform. Going beyond the commercial cloud storage, the Storj developers are working on offering additional services for its platform. Its long-term storage support should make it suitable for the creation of archives and storage of backup and recovery files for regulatory or compliance purposes. At the same time, Storj wants to become a general-purpose media content delivery platform, with the support for the storage of large amounts of video, audio, photo and other files. They will be available for concurrent downloads based on their segmented and distributed nature.

How Does Storj Work?

Working out the manner in which the Storj network operates starts with its apparent similarity with the torrent technology. Torrents operate as peer-to-peer networks on which each stored file is split into numerous small segments which are then distributed to the users. The users both store and keep copies of the same file. A person desiring a copy sends a request to the network, in the hope of receiving fragments of the desired file from the users who have it (“seeds”). Finally, the torrent client software compiles the file pieces from different seeders and recreates the original file. A similar system is employed on the Storj network:

  • The process of division of files on the Storj network is called file sharding. Instead of sourcing an entire file from a single source, the Storj network will allow the user to download fragments of the desired file from several sources at the same time. This decentralized file transfer system should allow Storj to present itself as a faster downloading solution compared to other storage providers.
  • By breaking the files into pieces or shards, Storj removes the possibility of a single organization or company having access to complete files. While the torrents publish information on file pieces publicly, only the uploaders remain in the know regarding the location of files on the Storj. In this manner, the Storj wants to promote protection of privacy of the parties involved in the file transfer process.
  • Locating the shards of the original file on the Storj platform is the task of its distributed hash table technology of Kademlia.

Redundancy and Deletion Systems on Storj

The sharding system implemented by Storj faces several risks which the developers had to counter with the appropriate technologies. Knowing that file pieces are distributed to various computers on the Storj platform, the users may rightfully wonder what happens after some users decide to stop using Storj or shut down their systems for any reason. In order to prevent the lack of access to desired shards, the Storj platform has implemented a redundancy system on its network:

  • This system is based on the use of so-called parity shards. Storj will help the users determine the strength of the redundancy for each file they upload and create parity shards. Based on this, the system is supposed to shield the network from the unwanted loss of files.
  • Yet, the parity shard system can hardly function as a water-proof solution in the long run, when the loss of files becomes more likely with passing time. The Storj developers hope to counter this by organizing periodic audits and checkups of the network, while advising the users to do the same for their files whenever they want to reupload them.
  • At the same time, there are some concerns that Storj’s redundancy system might cause the network to become sluggish. In order to prevent this, the network has come up with a set of rules governing the deletion of files which get duplicated too many times as part of the redundancy system.

File Protection on Storj

One of the key differences separating the Storj network from torrent-based systems is the encryption of each piece of the desired file. This system was put into place to lower the risks of users getting unauthorized access to the files which are distributed as part of the platform’s sharding system:

  • The possibility that the users who have the file pieces may get insights into the content of shards may be problematic for those who feel that this may compromise sensitive information. This is the point at which the Storj calls upon its “tenants” or file uploaders to both compress and encrypt the files before submitting them to the sharding system. Encrypting is done by assigning a unique key to a single file.
  • Since the data gets encrypted with the user’s private key on their own device, the data hosts or “farmers” are prevented from knowing what a complete file actually contains. Instead of this, they will receive a piece of a larger file which has been encrypted and thus made unusable unless they get their hands on both the encryption key and the remaining shards.
  • Potential hackers wanting to gain illicit access to a desired file would have to find all of its shards, which is hardly possible without the private key. Unless they manage to somewhat persuade farmers to send their shards and steal the key from the tenant, they will be arguably powerless against this system.

What is the Storj Bridge System?

Being central to the platform’s decentralization and security efforts, the Storj’s network of tenants and private keys needs to be flexible enough to meet potential changes in the current technological landscape. One of the trends which may have an impact on the underlying Storj system is the tendency of users to switch their devices every now and then. Considering that the tenants have their encryption keys stored on local devices which may get changed, the Storj developers had to come up with the Bridge server architecture to account for the situations in which the users do not need to access files from the same device.

With that in mind, the Storj team went to develop and implement the Bridge server technology. It allows for the secure storage of the encryption keys on a dedicated server which holds the relevant metadata.. The Storj team hopes to see this technology implemented alongside the future file sharing system, as the identity verification and storage would both take place in the cloud.

Role of STORJ Token

The Storj token (STORJ) is the currency with which the payment operations on the Storj platform are managed. Fees paid by tenants are turned into funds which the farmer receive for providing both the storage and bandwidth resources to the main platform.

In order to make sure the payments reach the right address, the Storj requires farmers to verify the existence of shards which are sent to them. The Storj maintains a file audit and verification system which involves sending a request to farmers to which they need to respond. This system is called the Proof of Retrievability and relies on sending a Merkle challenge to the farmers on an hourly basis. They will be able to provide answers only if the shards kept on hard drives remain intact and free from tampering.

In case they attempt to modify or delete the file in question, all payments will be automatically stopped. To expand the existing system with additional incentives to play fairly, the Storj team will work towards establishing a dedicated reputation system for its farmer nodes. In 2018, the Storj network has been estimated to have around 40k active farmer nodes.

As of March 2019, the market cap for Storj stood at just above USD 30 million. More than 135 million tokens have been in circulation in the same period, out of the planned supply of 425 million units. While the Storj Labs company pre-mined its entire supply of tokens, the tokens can be acquired either by becoming a farmer or via trading on cryptocurrency exchanges such as Binance, Bittrex and others. STORJ is usually traded in combination with Bitcoin, Ether, Tether and other currencies. Since the STORJ is based on Ethereum, ERC-20 wallets are a suitable option for storing the acquired tokens.

Storj Team and Competitors

The Storj open source project was started in 2014, while the ICO took place in May 2017. The project shares the name with the Storj Labs company which is headed by the founder and CSO Shawn Wilkenson, Ben Golub (executive chairman) John Quinn (co-founder) and Philip Hutchins (CTO and principal architect). The core team has about 45 members with various professional backgrounds ranging from Bitcoin mining to managing startups.

In addition to cloud storage providers such as Dropbox, Google Drive and OneDrive, the main competitors of Storj include Siacoin, as yet another decentralized cloud storage platform, Filecoin and MaidSafe Coin.