One of the few trillion dollar markets in the ecosystem: decentralized storage

We are standing in front of the entrance to the era of Web 3.0, and data storage deserves our attention as a top priority track.

Polkadot is a highly scalable project that can accommodate a very large number of ecological niches, and through the observation of ecological niches, we can both perceive the whole picture and clearly understand the whole development of Polkadot; and By observing the ecological niche, we can see the whole picture and get a clear picture of Polkadot’s development, and we can also see which ecological niche is in a competitive or blue ocean situation. Only with a clearer understanding of Polkadot’s ecological development can we, as investors, participants or developers, better grasp the dividends of Polkadot’s ecological development. (This article will inevitably cover the project and is intended only as an expression of opinion and not as any other advice.


In September 2014, Microsoft officially announced the acquisition of Minecraft and its developer Mojang, a 3D sandbox construction game, for $2.5 billion, which was a real “big deal” in the gaming industry at that time.

Those who know the game “Minecraft” will probably know that, as a fun pass game that can upgrade the game in the virtual world, the game is the pinnacle of freedom, and can even create their own homes in the game, and some players by building another city together in the game. As a result, the game can have fixed assets like land and property in reality in addition to the common props, which is why the game is so popular.

Looking back at the development of the Internet and 5G in the past, we see that the digital world is getting closer and closer to us, and the progress of the digital world has allowed us to start living in the “real” version of “my world”, and in these digital worlds, we also have our own property, goods or some treasures, just like the game to get the road in general.

It is to see the future trend of the digital world, Microsoft is willing to spend a lot of money to acquire “Minecraft”, and will be combined with another Microsoft AR products HoloLens (Microsoft Corporation developed a mixed reality head-mounted display), so that we intuitively feel the digital world seems to be more within reach.

These “decentralized” architectures open the door to secure access to the digital world, and they will become an essential part of the industry’s development.

In this article, we will focus on the development of decentralized storage, starting with common decentralized storage, discussing decentralized storage built in the Poca ecosystem, and looking at how decentralized storage is implemented in the Poca track.

What is decentralized storage?

  1. Definition of decentralized storage

First we need to clarify what decentralized storage is, and how it differs from distributed storage. According to the more common understanding, decentralized storage means that in a storage network, there is no centralized institution as the backing of the storage system, but a relatively independent individual or part of the group contributes its own storage space as a component unit of the storage network, so as to bypass the absolute control of data brought by the centralized institution storage.

The concept of distributed storage, on the other hand, has been around much longer, and in broader terms, a distributed storage system is one in which data is stored decentralized across multiple independent devices. While distributed storage means that the architecture is distributed, decentralized storage means that the content of the storage is not controlled by a central institution or individual. Therefore, decentralized storage must be distributed storage, but distributed storage is not necessarily decentralized storage. Our common “cloud drive” is a kind of distributed storage, but it is controlled by a centralized organization, which can delete and modify our data at any time, which is very different from decentralized storage.

Therefore, decentralized storage is considered to be a more widespread and grounded type of storage in the future, which can enhance the security of stored data and even reduce storage costs.

  1. What is the difference between decentralized storage and capacity storage projects

Of course, when it comes to decentralized storage, we have to mention another easily misunderstood thing, that is, the recent fire of the so-called decentralized storage projects like Chia, but in essence, Chia provides not really decentralized storage, but only a kind of “proof of capacity” like Bitcoin.

Chia essentially uses the size of the storage space (Capacity) as a measure of the contribution of the network participants, which means that the larger the storage space, the more revenue you get, but does not actually provide storage space for our life and work needs, which is a big difference from the decentralized storage we want.

Back to the real decentralized storage, it should be to provide storage space (Storage) quality of service to measure the value of the contribution to the network, so that the true sense of decentralized storage facilities, and to have a decentralized storage space around the birth of many excellent decentralized applications, and the IPFS protocol mentioned below is more in line with the trend of decentralized storage development at this stage.

  1. The important protocol in decentralized storage – IPFS
One of the few trillion dollar markets in the ecosystem: decentralized storage

In the same year Minecraft was acquired, an organization called Protocol Labs (Protocol Labs) joined Y-Combinator, the top incubator in the United States, and then the Protocol Labs released IPFS (InterPlanetary File System) to the world in January 2015, which is a global, peer-to-peer distributed version of the file system, also known as the “Interplanetary File System”, through which the system can achieve peer-to-peer data transfer and decentralization of storage.

On the other hand, IPFS aims to complement or even replace the Hypertext Transfer Protocol (HTTP), which currently rules the Internet, to achieve more secure, stable and faster network transfers.

And to successfully build a network for decentralized storage, it is not enough to have a protocol like IPFS, because what makes other people want to provide storage space to IPFS?

This requires building an incentive layer on top of this protocol to provide cryptocurrency incentives for participants who provide storage space to IPFS, so the team at IPFS, Protocol Lab, after taking a cue from Bitcoin, launched the blockchain project Filecoin as an incentive layer for IPFS.

Of course, it does not mean that the incentive layer of IPFS can only be Filecoin made by Protocol Lab, because IPFS is an open protocol, other teams can also build another incentive layer based on IPFS, after all, there is no single right answer on the road of technology development.

Likewise, the idea of “IPFS + incentive layer” is not the only solution. We have also seen other projects that build another decentralized network by building their own protocols and integrating the blockchain token reward mechanism together.

What is decentralized storage?

So what exactly are the advantages of decentralized storage over our current storage networks and why is it gaining more and more acceptance? We will focus on IPFS technology as an example to explore the significance of decentralized storage.

  1. There are more advantages than centralized storage

1.1, decentralized content storage to avoid the risk of being subject to centralized factors

Now open the website we often browse more than ten years ago, we will find that many of them are no longer open, showing 404 not found, which is to tell us that the page no longer exists, the reason for this is because we now see the website content, all stored in a centralized server, when the site operator no longer pay the cost of the server, this part of the content will be deleted by the server management, and all the information on the site will be gone forever.

Risks of centralization, such as the removal of content due to the management of centralized storage, or the deletion of our content in the cloud by a web drive, will no longer occur. IPFS allows content to be stored in different storage spaces in a decentralized and distributed manner, without any one subject being able to modify or delete the stored content.

1.2. Stored content can get privacy protection

Since the stored files are split into many copies and then stored encrypted to different nodes. Therefore, the storage party does not know what the stored content is, which can effectively protect our privacy and will not appear the previous situation of Facebook’s 50 million users’ data being leaked.

1.3.More effective backup, can prevent single point of failure

Since the stored content is scattered to different places, data loss due to a single point of failure can be effectively prevented by means of data redundancy. Although traditional cloud storage can also choose to backup multiple times, but backup more is still controlled by the company of that cloud storage, and its security does not increase significantly with the number of backups.

1.4. Greatly save existing storage space

IPFS has a de-duplication feature. When storing files, IPFS will by default back up three copies across the network (or you can choose to back up more yourself), after which the same files will not be stored again in the network. Compared with our current storage situation, such as the movie Avatar, the number of downloads in 2016 reached 16.58 million times a year, the total number of downloads is even more amazing, there is a lot of space occupied by the same movie, and the decentralized storage of IPFS can greatly reduce the occupation of storage space and improve the utilization of storage space.

1.5, lower cost

Compared to centralized storage, which will centrally occupy a large amount of bandwidth, decentralized storage can theoretically reduce bandwidth consumption by more than half and lower network costs. And decentralized storage can also greatly reduce costs at the construction and operation and maintenance levels.

1.6, faster speed

Because the network can first choose the node service closer to the user, and naturally support P2P acceleration and other technologies, making the speed of reading data faster compared to traditional storage

  1. Web3.0 important infrastructure

Web3.0 as defined by Gavin will be a scalable set of technical frameworks and a new way to build applications through which he wants everyone to be in control of their (digital) identity, assets and data, and thus their own destiny.

To do this, a decentralized network is essential, and that’s exactly the important role blockchain technology is taking in Web 3.0. But for the existing blockchain can not fully meet the needs of Web3.0, the blockchain itself also faces some “storage bottlenecks”.

The current blockchain stores very limited content and cannot decentralize all data. Moreover, with the limited storage of blockchain, its own ledger has become bigger and bigger.

The blockchain technology itself is tamper-proof by storing the same ledger in all nodes, so the more the number of nodes, the more the storage space of a single ledger is becoming, which will make just storing the blockchain

The more nodes there are, the more storage space there is for a single ledger.

Therefore, blockchain+decentralized storage becomes an important solution. On the one hand, it can make blockchain projects no longer bothered by the increasing size of the ledger. Putting the ledger of the blockchain on a decentralized storage network like IPFS can greatly reduce the ledger storage space of a single blockchain project, making it easier and easier to become a full node and more conducive to further decentralization of blockchain projects.

On the other hand, it can make larger files, such as pictures, videos, etc., also become decentralized, which is also very suitable for the current hot NFT ecology. NFT is originally a digital asset belonging to individuals, but currently some large NFT assets, such as pictures and videos, can not be made to put themselves on the face, but if combined with decentralized storage, it will allow NFT to no longer be limited by the size and form of data, which will bring more expansion directions for NFT and also bring more possibilities for blockchain applications.

With the development of technology, especially the improvement of display technology like VR/AR, we may even see a scene like “Top Gun” in the future: everyone can enter a virtual digital world through some VR/AR and other smart devices, in which everyone has their own houses, digital currencies, digital assets, etc. We can consider the storage space as the land of the digital world, and the various applications built on the digital world are the various types of buildings on top of the land. The decentralized property is the most important, because you don’t want a house in the digital world to be able to be peeked inside by others at any time, or to be taken back by some center at any time.

Therefore, decentralized storage is the cornerstone of this digital world, and is an important infrastructure for Web 3.0.


Critical infrastructure in the era of data explosion led by 5G

With the progress of 5G network transmission technology, other technologies around data, such as smart home, IoT, VR/AR, smart cars, etc., are also riding on this express train and evolving rapidly. Based on this, smart devices will spread to every corner of the world, and everything can record and collect data. It is foreseeable that in the near years, the data we generate every day will grow exponentially.

According to IDC, the size of the global data circle will grow from 33ZB in 2018 to 175ZB in 2025, and unstructured data such as text, images and videos will have a higher growth rate and continue to increase in the proportion of the overall data circle.

But the existing centralized storage approach always has bottlenecks, as we mentioned before, it does not have the function of de-duplication, a file may be stored hundreds of copies on the network resulting in a lot of waste. Although tech giants like Amazon, Ali, Tencent and others have already stated that they will spend huge amounts of money to build numerous data centers in the coming years, the data explosion is likely to expand faster than the data centers can be built, and more importantly, the traditional centralized storage approach dictates that it will still waste a lot of space on

storing the same content, so it is difficult to adapt to the development of the times without fundamentally changing the storage method.

Therefore, decentralized storage will definitely take an important stage in history. And, the expansion of the storage market also determines that this piece of cake is not destined to be monopolized by the giants, in the way of decentralized storage

universal participation in the construction of the digital world must be the future trend.

Development of decentralized storage project

As an important scenario of blockchain application, decentralized storage has emerged many high-quality projects. Let’s take Filecoin, Storj and ARweave as examples to briefly explain the current development of decentralized storage projects.



Filecoin is the incentive layer blockchain of IPFS made by Protocol Lab, the team behind IPFS. IPFS itself is already working fine as a protocol, but without incentives, why would others be willing to provide storage space to IPFS? So Filecoin takes on the role of incentive.

Filecoin’s goal is to build an IPFS-based storage marketplace and retrieval marketplace, as well as an open source cloud storage marketplace, protocol, and crypto asset, one of the earlier decentralized storage projects to emerge and with the largest consensus.

In Filecoin, miners are important participants in the network, and unlike the common mining in the past, they provide not computational power but storage power, precisely judging the value of participants’ contribution to the whole network based on the effective storage space provided, and receiving block rewards based on the percentage of contribution.

Currently Filecoin has sufficient storage supply to reach its base goal of storing arithmetic power over the network baseline and has begun a new chapter in its crypto-economic incentive mechanism towards the second phase of its medium-term vision. Its incentive goals are shifting from crude capacity building to building capacity that matches supply and demand and is fully sustainable. The future of Filecoin will move toward greater efficiency.

One of the few trillion dollar markets in the ecosystem: decentralized storage

And at the same time, there are many outstanding projects joining the Filecoin EcoShowcase program. They cover a wide range of fields such as database, DeFi, middleware, trading platform, cloud teaching, medical, etc., and have reached cooperation with Wolfram Blockchain Labs, Chainlink, etc.


Storj Labs provides end-to-end encryption and affordable distributed cloud storage, a decentralized blockchain-based distributed cloud storage system. The underlying foundation is built on ethereum, and Storj leverages spare disk drive space shared by its community members to create a secure network for developers, operations teams, companies and others who need secure cloud storage. The goal is to become a censorship-resistant, decentralized cloud storage platform without downtime.

The Storj network consists of three main components: storage nodes, satellites, and uplinks. The role of the storage nodes is to store and return data. Uplink (Uplink) is a software or service that feeds data in or directly from the network. The role of the satellite (Satellite) is to act as an intermediary between the uplink and the storage node, which facilitates storage interactions and determines which storage node will store which files.

The relationship between the satellite and the storage node is very important. The satellite is responsible for paying the storage node for the storage and bandwidth used by the network. The storage node, in turn, wants to store as much data as possible for the network so that it can make the most money, and to achieve this, it relies heavily on the help of the satellite. The two are equivalent to the complementary roles of the production side and the channel side.

One of the few trillion dollar markets in the ecosystem: decentralized storage

Currently Storj has 20,000 tenants, 18,000 miners and 8 petabytes of storage available for use. It can accept BTC, ETH and Storj passes in multiple ways for payment and has partnerships with several projects such as ETC Labs and zkSync. Its commercialized cloud storage platform, Tardigrade, is already in use and is providing decentralized data storage services for enterprise-level users.


Arweave is another way of thinking about the IPFS incentive layer, which aims to provide permanently preserved data based on blockchain technology, a permanent serverless network. arweave believes that the cost of data storage, similar to Moore’s law, will gradually decrease, so users only need to pay for storage when they add data to the blockchain. Also Arweave does not require nodes to keep all block data to increase the persistence of the blockchain.

The equipment requirements for Arweave mining are close to those of a home computer, requiring only 4 cores and 8 GRAM and a 512G hard drive to participate. Miners gain incentives by storing data as nodes, and the more blocks saved, the more likely they are to be rewarded with a block-out bonus.

The current data stored in the Arweave network reaches 7.85TB and has 151 nodes worldwide, with an average daily transaction volume of 26,110. The data used in a single day has reached an all-time high of 888GB and is increasingly popular among individual users.

One of the few trillion dollar markets in the ecosystem: decentralized storage

Decentralized storage provides a secure, private and inexpensive way to decentralize storage. As the consensus and demand for decentralized storage grows and regulation becomes more regulated, decentralized storage projects are becoming more mainstream.

Decentralized Storage on Polka

With the idea of mainstream decentralized storage projects, what is the situation of decentralized storage projects on polka ecology?

1.Filecoin transfer bridge

Filecoin can actually be seen as one of the polka ecology, and Filecoin has always had some origin with polka.

Juan, the founder of Filecoin, has always been a big believer in Web3.0, and the decentralized storage made by its Filecoin and IPFS also happens to be an important part of Web3.0. When the Web3 Foundation behind Poca held its Web3 Summit, Juan, as a Web3.0 evangelist, naturally became a regular at the Web3 Summit and could be seen sharing his insights on Web3.0 at the conference in both 2018 and 2019. (If not for the impact of the 2020 epidemic, we probably would have seen him attend again)

One of the few trillion dollar markets in the ecosystem: decentralized storage

And the contribution of decentralized storage Filecoin+IPFS in Web 3.0 has been recognized by Gavin, the founder of Polka. in December 2019, when Gavin Wood, the founder of Polka, was asked at an AMA event on Twitter: what are the current storage options for Substrate? I know there is Substrate LFS and Substrate Core Concept storage . What is the roadmap planned?

Gavin said: We are working on an initial storage solution as a parallel chain. Whatever we do, it will most likely be integrated into IPFS. I also hope to bridge to Filecoin when it goes live.

One of the few trillion dollar markets in the ecosystem: decentralized storage

Therefore, there is a case to be made for Filecoin and the IPFS behind it as part of the polka ecology. And judging from Gavin’s statement, it is likely that Filecoin will get a public interest parallel chain as an officially supported Filecoin transit bridge in the future.

Of course, the polka ecology does not limit a public chain to only one transit bridge. Take Ethernet as an example, besides the officially supported SnowFork as an Ethernet transit bridge, others such as Plasm and Darwinia are also making Ethernet transit bridges. Similarly, Filecoin as an important ecology, there are also many other polka ecology projects want to bridge Filecoin to it and link to the polka ecology through themselves.

In March 2020, Poca’s eco-project ChainX revealed that it is developing the Filecoin bridge. ChainX acts as a cross-chain gateway for assets, and its goal is to connect any valuable asset to the blockchain network, thus building a Web 3.0 ecology where all chains are connected and value is freely delivered. And Filecoin may become the infrastructure of all blockchain projects. With the help of IPFS technology and Filecoin network, the storage aspect can be solved, which is the reason why ChainX accesses Filecoin.


Crust is the incentive layer protocol for decentralized storage, which includes a variety of storage layer protocols including IPFS, and provides support for the application layer. Crust’s architecture also has the ability to provide support for the decentralized compute layer, building a distributed ecology that values data privacy and ownership.

Unlike Filecoin, Crust is not a separate public chain, but a parallel chain to Polkadot. Developed based on the Substrate framework, the consensus algorithm, off-chain work machine, and upgrade mechanism are all consistent with the Polkadot ecology, so the maturity of the Crust chain is instead higher than that of Filecoin.

Since the core proof mechanism of Crust is implemented through TEE-based local storage checks, it does not require a lot of arithmetic power, which reduces the requirements for the configuration of mining machines. There are many home office grade processors that can be used for mining, making the threshold for mining even lower.

One of the few trillion dollar markets in the ecosystem: decentralized storage

Currently Crust has launched the Crust Maxwell test network with the same functions as the main network, integrating core functions such as token pledge, decentralized storage market DSM and file retrieval mechanism. And it has received excellent response in the community. Meanwhile, Crust launched three major application scenarios, namely decentralized network deployment and operation, NFT data storage, P2P content storage and distribution, and cooperated with ecological projects such as Uniswap, PolkaApps, Kaka and Coinversation.

Summary and reflection on the current status of decentralized storage

Looking at the current mainstream decentralized storage projects, we are very optimistic about the prospects of this ecological niche, but there are still some situations that we should think about.

  1. Thinking

1.1, commercial application scenarios still have not been verified on a large scale

Although individual projects are groping for commercial landing, they are still far from large-scale commercial landing, and well-known decentralized storage projects like Filecoin are still stuck in the mining stage, so

How decentralized storage can be accepted by the tradition is a question worth exploring.

Which project can overcome this difficulty, as if Coinbase can directly access to the traditional field of the massive market after listing.

1.2, the economic model is in doubt

Like the storage market and retrieval market that Filecoin is trying to build, in which its pass-through FIL is used as the medium of payment, then there is a problem here. The demand for circulation and the rise and fall of the coin price are mutually inhibited. If A is a storage provider and B is a purchaser of storage services, when B pays a certain amount of FIL to A, if the token goes up, A makes money but loses money for B and he is less willing to pay; conversely, if the token goes down, B makes money but receives less money for A and he is less willing to collect. So, the volatility of token will inhibit the trade and it will not be conducive to an active storage market and retrieval market for FIL.

So is there any way around it? Yes, if a stable coin is minted with FIL and made into a dual coin system of stable coin + FIL, the stable coin is used for the storage market and retrieval market, while FIL is used to carry the whole Filecoin development dividend, it can kill two birds with one stone, but we have not seen such a design for Filecoin yet, we need to observe further.

1.3, the legal risk of storage

Since decentralized storage comes with privacy features, it is helpful to protect our personal privacy, but on the flip side, if the content stored is illegal, won’t decentralized storage become a hotbed for certain criminals?

At present, China’s decentralized storage is still in the stage of acquiescence to its development, mainly because Filecoin is still in the pure mining stage, not yet to the commercial application stage, so it is not sure whether our policy will be strong regulation after Filecoin can really store the content.

Another point also needs to be noted, the current domestic start to suppress PoW class mining behavior, in order to meet the goal of carbon da peak and carbon neutral, although there is no clear indication to crack down on storage mining, but like Beijing and other individual cities are also cracking down on storage mining, in the future, the policy risk will be a Damocles sword of domestic decentralized storage mining. And overseas, there are also views in the discussion of the social hidden dangers of unlawful data on decentralized storage, so how to find a balance between regulation and privacy, centralization and decentralization, is a major problem of decentralized storage.

  1. Insights

2.1. IPFS is becoming a trend

The network effect of IPFS is gradually taking shape, just like many emerging public chains are now compatible with EVM, the virtual machine of Ethernet, many projects doing decentralized storage will also be compatible with IPFS, because at present IPFS has the largest consensus in decentralized storage, and the most developers and applications, compatible with IPFS can reduce the trouble of repeatedly building wheels in development, and can also directly Linking to many development tools and developers is very beneficial to the development ecology.

Not only blockchain projects, even traditional Internet giants are also laying out IPFS, as early as 2019, Microsoft’s Azure Marketplace released IPFS (beta) products, which can create a network of IPFS node permissions to form a decentralized storage network. In addition to this, Netflix (Netflix), the world’s number one video platform, Google, Huawei Cloud, Jingdong, Firefox, Opera Browser, and Brave Browser have all indicated that they have done IPFS-related deployments.

So it seems that IPFS is really moving toward replacing the HTTP protocol, and the early layout of IPFS will be a big idea to grasp the decentralized storage dividend.

2.2, this track still has a lot of opportunities

From the mechanism of storage, decentralized storage can greatly reduce the waste of storage space, just this point of view, this track is an indispensable shift in the way of storage, and in addition to Filecoin, we have seen many novel ideas, like ARweave and Crust is based on IPFS to do another idea of incentive layer, so we have every reason to So we have every reason to believe that more incentive layer ideas will be introduced. What’s more, it can also be positioned as a storage niche based on the design of the incentive layer, for example, ARweave is more inclined to permanently store some valuable information (or NFT). Or, similar to Storj made into a commercial application.

2.3, the traditional storage giants to enter the competition

As mentioned earlier, IPFS has also attracted the attention of many traditional Internet giants, which will bring some changes, one is that they will explore a semi-commercial and semi-decentralized way to carry out storage related business in combination with their own needs, and the other is that they will enter the cryptocurrency market like traditional payment giants such as Paypal, and when the commercial landing of IPFS is clearly explored, the users and funds brought by their entry may exceed the previous ones. The amount of money they bring in may exceed the previous accumulation of decentralized storage in the cryptocurrency field in one fell swoop. This will bring competitive pressure to the existing decentralized storage projects, but there is an opportunity in the crisis, because there are more funds and users focusing on this area, and it will be up to us to attract the traffic and funds.

It is undeniable that we are standing in front of the entrance to the era of Web 3.0, in front of such a big era, data storage as the most important track is bound to receive the attention of many people. Of course, we can be both the participants of the times and the builders of the ecology, so that we can jointly enjoy the dividends brought by the development of Web3.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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